Can a funeral home decide burial or cremation from what someone bought in a prepaid funeral plan?

Plain-English summary

The Texas Department of Banking regulates prepaid funeral contracts, and its Banking Commissioner brought the AG a practical problem. The current model contract form lets a purchaser check how they want their remains handled — burial, cremation, or other. But older forms and nonstandard contracts often do not address disposition at all. When a funeral provider gets one of those older contracts with no stated choice, providers had been inferring the type of disposition from what the person bought — for instance, treating a purchase of services or merchandise more consistent with burial as a choice of burial. The Commissioner asked whether, when a contract lacks an affirmative election of a disposition type, a funeral provider must or may infer the decedent's choice from the contract's contents.

The AG answered that the provider may not infer it. Two statutes resolved the question. Chapter 154 of the Finance Code governs prepaid funeral benefits contracts: a funeral provider that is a party to the contract must deliver the contracted merchandise and services, but the contract may not be modified after death to change a disposition type the purchaser specified, "as provided by" the Health and Safety Code. Section 711.002 of the Health and Safety Code, in turn, lets a person give written directions for disposition (including cremation) in a will, a prepaid funeral contract, or another signed and acknowledged instrument, modifiable only by a later signed and acknowledged writing. If a decedent leaves no written directions, the statute hands the right to control disposition to a priority list of people — first someone named in a written instrument signed by the decedent, then certain relatives, then qualified executors or administrators.

Putting the pieces together, the AG explained that a funeral provider must carry out the contract's terms but must also honor written directions about disposition — and a person is free to put those directions in a will or other writing instead of the contract, or to leave none at all. No law requires a prepaid funeral contract to include disposition instructions. So when a beneficiary dies, the provider has to determine, as a matter of contract construction, whether the contract actually contains the beneficiary's written directions for disposition. Contract construction is a question of law, and courts look to the parties' intent as expressed in the writing, giving words their plain meaning. The Health and Safety Code does not define "written directions," but "direction" commonly means an explicit instruction. The AG concluded that "language of purchase" — what services and merchandise were bought — is not the explicit instruction the statute requires. While a beneficiary's purchases might reflect their thinking at the time, they do not amount to binding directions about the type of disposition. So if a prepaid funeral contract does not expressly address disposition, a funeral provider may not infer the choice from the purchases and thereby override the right of the people listed in section 711.002(a) to control disposition.

Currency note

This opinion was issued in 2019. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

Funeral providers handling older prepaid contracts: At the time of the opinion, the AG concluded that when a prepaid funeral contract lacks an affirmative election of a disposition type, the provider's inference from the purchased services and merchandise does not satisfy the statutory requirement for written directions and may not be treated as the decedent's choice.

The Department of Banking and contract drafters: The opinion explained that no law requires a prepaid funeral contract to include disposition instructions, and that binding directions require an explicit written instruction under section 711.002(g).

Families and others with the right to control disposition: The AG explained that when a decedent leaves no written disposition directions, the people listed in section 711.002(a) — in priority order — hold the right to control disposition, and a provider may not deprive them of that right by inferring a choice from the contract.

Common questions

Can a funeral home decide burial or cremation from what was purchased in a prepaid plan? No. The AG concluded that a funeral provider's inference from the services and merchandise listed in a prepaid funeral contract does not satisfy the statutory requirement for written directions specifying the disposition of remains.

What counts as binding "written directions" for disposition? The AG explained that a person may give written directions in a will, a prepaid funeral contract, or another signed and acknowledged writing, and that "direction" means an explicit instruction. A record of purchases is "language of purchase," not an explicit instruction.

Does a prepaid funeral contract have to say how the remains will be handled? No. The AG noted that no law requires a person buying a prepaid funeral contract to include disposition instructions in it; the directions may instead appear in a will or other signed and acknowledged writing, or not at all.

Who decides disposition if the contract is silent and there are no written directions? The AG explained that the right to control disposition then passes to the people listed in priority order in section 711.002(a) — beginning with a person named in a written instrument signed by the decedent, followed by certain relatives and qualified executors or administrators.

Can someone change the disposition choice later?
The AG noted that written directions may be modified or revoked only by a subsequent writing signed and acknowledged by the person, and a prepaid contract may not be modified after death to change a disposition type the purchaser specified.

Background and statutory framework

The Department of Banking regulates prepaid funeral contracts under chapter 154 of the Finance Code (Tex. Fin. Code §§ 154.051(a), .151(a); §§ 154.001-.416), and the current model form (7 Tex. Admin. Code § 25.3(b)) lets a purchaser indicate burial, cremation, or other. The AG construed the statutes by their plain language in context (Jaster v. Comet II Constr., Inc.). Chapter 154 defines prepaid funeral benefits, funeral providers, funeral services, and merchandise (§ 154.002(6), (9), (12), (13)(A), (B)) and requires the contract to obligate the provider and state the benefits (§ 154.151(b)(2), (c); § 154.151(b)(3)). After the beneficiary's death the provider must deliver the contracted items, subject to limited modification (§ 154.161(a)(2)(A); § 154.1551; § 154.1551(a)), but a purchaser-beneficiary's contract may not be modified to change the specified disposition type "as provided by Section 711.002(g), Health and Safety Code" (§ 154.1551(a)(2)).

Section 711.002 of the Health and Safety Code governs disposition (Tex. Health & Safety Code § 711.002; Tex. Att'y Gen. Op. No. JC-0279 (2000)). Subsection (g) lets a person give written directions in a will, a prepaid funeral contract, or a signed and acknowledged instrument, modifiable only by a later signed and acknowledged writing; absent written directions, the priority list in subsection (a) controls (§ 711.002(a); § 711.002(a)(1)-(7)), and subsection (i) limits a provider's liability when carrying out written directions (§ 711.002(i)). The AG reasoned that a provider must honor the contract's terms and any written disposition directions, that no law requires those directions to be in the contract, and that whether a contract contains them is a matter of contract construction — a question of law in which courts give effect to intent as expressed in the writing using words' plain meaning (MCI Telecomms. Corp. v. Tex. Utils. Elec. Co.; Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am.; Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc.). Because "direction" means an explicit instruction, the AG concluded that "language of purchase" is not the explicit written instruction section 711.002(g) requires, so a provider's inference from the purchases does not satisfy the statute and cannot deprive the section 711.002(a) designees of their right to control disposition (§ 711.002(g); § 154.1551(a)(2)).

Citations

Statutory and administrative provisions:

• Tex. Fin. Code § 154.051(a); § 154.151(a); §§ 154.001-.416; § 154.002(6); § 154.002(9); § 154.002(12); § 154.002(13)(A), (B); § 154.151; § 154.151(b)(2), (c); § 154.151(b)(3); § 154.1551; § 154.1551(a); § 154.1551(a)(2); § 154.161; § 154.161(a)(2)(A)
• 7 Tex. Admin. Code § 25.3(b)
• Tex. Health & Safety Code § 711.002; § 711.002(a); § 711.002(a)(1)-(7); § 711.002(g); § 711.002(i)

Cases and Attorney General opinions:

• Jaster v. Comet II Constr., Inc., 438 S.W.3d 556, 562 (Tex. 2014)
• MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999)
• Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011)
• Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015)
• Tex. Att'y Gen. Op. No. JC-0279 (2000)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0232
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2019/kp-0232.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

January 7, 2019

Mr. Charles G. Cooper
Opinion No. KP-0232
Banking Commissioner
Texas Department of Banking
Re: Whether a funeral provider may infer a
2601 North Lamar Boulevard
decedent's preferred method of disposition
Austin, Texas 78705
from the contents of a prepaid funeral contract
(RQ-0234-KP)

Dear Mr. Cooper:

You ask about a funeral provider's authority to determine a decedent's preferred method of disposition from the contents of a prepaid funeral contract. [1] The Texas Department of Banking (the "Department") regulates prepaid funeral contracts, which are governed by chapter 154 of the Finance Code. See TEX. FIN. CODE §§ 154.051(a), .151(a); see generally id. §§ 154.001-.416 (chapter 154). The current model form for prepaid funeral contracts provides for a purchaser to indicate the desired disposition of his or her remains, either burial, cremation, or other. Request Letter at 2; see 7 TEX. ADMIN. CODE § 25.3(b) (Tex. Dep't of Banking, Prepaid Funeral Contracts). You are concerned about older forms and nonstandard contracts that do not address the type of disposition desired. See Request Letter at 2. You tell us that "[w]hen a funeral provider is confronted with an older form contract, in which the purchaser has not explicitly stated his or her desired method of disposition, the funeral provider commonly infers the type of disposition from the services or merchandise purchased," such as the purchase of funeral services or merchandise more consistent with burial than with cremation. Id. You ask whether, when "an executed funeral contract lacks an affirmative election with respect to a type of disposition, [a funeral provider must or may] infer the decedent's election from the contents of a prepaid funeral contract." Id. at 1.

Courts interpreting statutes attempt to give effect to the Legislature's intent as expressed in the plain language of the text considered in the context of the entire statutory scheme. Jaster v. Comet II Constr., Inc., 438 S.W.3d 556, 562 (Tex. 2014). Chapter 154 of the Finance Code and section 711.002 of the Health and Safety Code resolve your question. Under chapter 154, "[p]repaid funeral benefits" are "prearranged or prepaid funeral or cemetery services or funeral merchandise, including an alternative container, casket, or outer burial container." TEX. FIN. CODE § 154.002(9). A prepaid funeral benefits contract must obligate a funeral provider to provide the benefits as a party to the contract. Id. § 154.151(b)(2), (c); see also id. § 154.002(6) (defining

[1] See Letter from Mr. Charles G. Cooper, Commissioner, Tex. Dep't of Banking, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (May 29, 2018), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinions-rqs ("Request Letter").

"funeral provider" as "the person designated in a prepaid funeral benefits contract that has agreed to provide the specified prepaid funeral benefits"). The contract must "state the details of the prepaid funeral benefits to be provided." Id. § 154.151(b)(3). The benefits may include prepaid funeral services and merchandise. Id. § 154.002(9). "Funeral services" are services sold pre-need and used to "care for and prepare a deceased human body for burial, cremation, or other final disposition[,] and ... arrange, supervise, or conduct a funeral ceremony or the final disposition of a deceased human body." Id. § 154.002(13)(A), (B). "Funeral merchandise" means goods sold pre-need for use in conjunction with funeral services. Id. § 154.002(12).

After the death of the beneficiary of a prepaid funeral benefits contract, the funeral provider must "deliver the contracted funeral merchandise and services and cash advance items required under the contract," subject to the right of modification after the decedent's death as allowed under section 154.1551. Id. § 154.161(a)(2)(A). Section 154.1551 allows persons with the right and responsibility to control the disposition of the beneficiary's remains to reasonably modify some terms of the prepaid funeral benefits. Id. § 154.1551(a). But if the purchaser of the contract is also the beneficiary, the contract may not be modified to "change the type of disposition specified by the purchaser in the contract, whether by burial, cremation, or another alternative . . . as provided by Section 711.002(g), Health and Safety Code." Id. § 154.1551(a)(2).

Section 711.002 governs the disposition of a decedent's remains. TEX. HEALTH & SAFETY CODE § 711.002; see generally Tex. Att'y Gen. Op. No. JC-0279 (2000). Subsection (g) of that statute establishes the right of a person to control the disposition of his or her remains:

A person may provide written directions for the disposition, including cremation, of the person's remains in a will, a prepaid funeral contract, or a written instrument signed and acknowledged by such person. . . . The directions may be modified or revoked only by a subsequent writing signed and acknowledged by such person.

TEX. HEALTH & SAFETY CODE § 711.002(g). If a decedent does not leave written directions concerning disposition, then persons designated in subsection (a) of the statute, in the priority listed, have the "right to control the disposition, including cremation, of the decedent's remains." Id. § 711.002(a). Subsection (a) lists first "the person designated in a written instrument signed by the decedent" followed by certain relatives of the decedent and duly qualified executors or administrators of the decedent's estate. Id. § 711.002(a)(1)-(7). The person who has the right to control disposition under subsection (a) has the duty to "faithfully carry out the directions of the decedent to the extent that the decedent's estate or the person controlling the disposition are financially able to do so." Id. § 711.002(g).

A funeral provider under a prepaid funeral contract "who fails to honor the contract is liable for the additional expenses incurred in the disposition of the decedent's remains as a result of the breach of contract." Id. Subsection 711.002(i) limits a funeral services provider's liability only when carrying out (1) a decedent's written directions, or (2) the written "directions of any person who represents that the person is entitled to control the disposition of the decedent's remains." Id.
§ 711.002(i). A person may leave written directions for disposition of remains in the person's will,

a prepaid funeral contract, or a signed and acknowledged instrument other than a prepaid funeral contract. Id. § 711.002(a), (g).

Thus, a funeral provider that is a party to a prepaid funeral benefits contract must carry out its terms, but also must honor written directions by the decedent or authorized designated person about the disposition of remains. A person may specify written directions in a will or other signed and acknowledged writing rather than in a prepaid funeral benefits contract, or may not leave written directions at all. No law requires a person purchasing a prepaid funeral benefits contract to include written instructions in the contract. Id.; TEX. FIN. CODE §§ 154.151 (stating the required form of the contract), .161 (stating responsibilities of the funeral provider). Accordingly, upon the death of a beneficiary of a prepaid funeral benefits contract, the funeral provider who is a party to the contract must determine whether, as a matter of contract construction, the contract contains the beneficiary's written directions for disposition of his or her remains.

Contract construction is ordinarily a question of law subject to de novo review by the courts. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999). In construing any contract, courts attempt to ascertain and give effect to the parties' "intentions ... as expressed in the writing itself." Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). The language of a contract must be considered in the context of the contract as a whole, and words are given their plain, common meaning. Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015). Although chapter 711 of the Health and Safety Code does not define "written directions," the word "direction" commonly means an "explicit instruction." WEBSTER'S THIRD NEW INT'L DICTIONARY 640 (2002). [2] Language of purchase is not explicit instruction for the disposition of remains required by subsection 711.002(g) of the Health and Safety Code. See TEX. HEALTH & SAFETY CODE § 711.002(g); see also TEX. FIN. CODE § 154.1551(a)(2) (prohibiting modifications that "change the type of disposition specified by the purchaser in the contract"). Under the statutes, leaving written directions about the type of disposition has legal consequences that bind the beneficiary and the beneficiary's survivors unless the instructions are "modified or revoked [in] a subsequent writing signed and acknowledged by" the beneficiary. TEX. HEALTH & SAFETY CODE § 711.002(g). While a beneficiary's purchase of merchandise and services might reflect the beneficiary's thinking at the time of the contract, it does not comply with the statutory requirement that the beneficiary provide binding directions about the type of disposition. If a prepaid funeral benefits contract does not expressly address the disposition of the beneficiary's remains, a funeral provider may not deprive persons listed in section 711.002(a) of their right to control disposition when the beneficiary does not leave written directions. See id. § 711.002(a). A funeral provider's inference drawn from a statement of the purchases made in a prepaid funeral benefits contract does not satisfy the statutory requirement of written directions specifying the disposition of the beneficiary's remains. Id. § 711.002(g); TEX. FIN. CODE § 154.1551(a)(2).

[2] See also NEW OXFORD AM. DICTIONARY 492 (3d ed. 2010) (defining "directions" as "instructions ... about how to do something"); AM. HERITAGE COLL. DICTIONARY 401 (4th ed. 2002) (defining "direction" as "[a]n instruction or series of instructions for doing or finding something[;] [o]ften used in the plural").

SUMMARY

If a prepaid funeral benefits contract lacks an affirmative election regarding the disposition of the contract beneficiary's remains, a funeral provider's inference from the purchases made in the contract does not satisfy the statutory requirement for written directions that specify the disposition of the decedent's remains under subsection 711.002(g) of the Health and Safety Code and subsection 154.1551(a)(2) of the Finance Code.

Very truly yours,

KEN PAXTON
Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

WILLIAM A. HILL
Assistant Attorney General, Opinion Committee