What happens to the trust funds once the contract beneficiary passes away?

Once a contract beneficiary passes away, the trust funds that were established as part of a pre-need funeral contract are utilized to cover the funeral expenses as per the terms of the contract. In Tennessee, these trust funds are specifically intended to ensure that the costs associated with the funeral services are prepaid and honored at the time of need.

Using the funds for this purpose ensures that the beneficiary's wishes are met and that the financial burden of funeral expenses does not fall on surviving family members. This practice safeguards the interests of the beneficiary and provides peace of mind, knowing that the arrangements will be financially covered.

In contrast, returning the funds to the seller would negate the purpose of the pre-need contract, which is to prepay for services. Converting the funds into a scholarship would not align with the intention of the funeral trust. Lastly, holding the funds indefinitely would not fulfill the contractual obligation to the beneficiary's family and would leave them without the necessary resources during a challenging time.