What type of contract is involved in an irrevocable prearrangement?

An irrevocable prearrangement involves a binding contract that cannot be terminated. This type of contract signifies a commitment where the terms agree that the arrangement for funeral services is established and cannot be changed or canceled by the individual once it has been set in place.

This is particularly important in the context of funeral prearrangement because it provides peace of mind to both the individual and their family; it ensures that the plans for the funeral are secured and that the funds are allocated to cover those specific services, regardless of future circumstances or changes in financial situation. It often serves as a way to protect assets from being counted against eligibility for certain types of governmental assistance programs.

The nature of an irrevocable contract contrasts sharply with other types of agreements, such as revocable trusts or temporary service contracts, which allow for modifications or termination under certain conditions. A non-binding service agreement, as the name implies, does not create any enforceable obligation, making it less suitable for an arrangement meant to be long-term and secure.