Can funeral services be arranged without a bank or trust agency for preneed contracts?

In Tennessee, it is legally required that preneed funeral contracts be made through a bank or trust agency. This ensures that the funds paid for the services are protected and properly managed until the time of need. The involvement of a bank or trust agency provides an additional layer of security for consumers, as these institutions are regulated and must adhere to specific fiduciary standards. By utilizing these entities, consumers can be assured that their investments in funeral services are safeguarded against potential mismanagement or fraud.

The law emphasizes this requirement to establish a system of accountability for the funds deposited for future funeral services. This is important not only for safeguarding consumer rights but also for maintaining trust within the funeral service industry. Without this regulation, families could face significant financial distress if the funeral services are not provided as promised when the time comes.

While some funeral homes might suggest alternatives or provide services without these oversight mechanisms, such practices do not comply with the Tennessee regulations surrounding preneed funeral contracts. Thus, a preneed funeral arrangement conducted without association with a bank or trust agency is indeed prohibited under Tennessee law.