New Jersey Mortuary Science Practice Exam

Which statement is true regarding surplus funds from a guaranteed price agreement?

1. They can be applied to other parts of the agreement without consent

2. They may be used for any business expenses by the provider

3. They cannot be applied to any other part of the agreement without written consent

4. They remain with the provider indefinitely

The correct answer is: They cannot be applied to any other part of the agreement without written consent

The statement that surplus funds from a guaranteed price agreement cannot be applied to any other part of the agreement without written consent is accurate because it reflects the legal and ethical standards surrounding such agreements in the funeral service industry. Typically, guaranteed price agreements are established to ensure that the funds entrusted for specific services are used solely for those intended services. If surplus funds exist after the completion of the agreed services, the provider must obtain explicit written consent from the client to reallocate those funds to other parts of the agreement or to different services. This requirement is in place to protect consumers and ensure transparency in financial transactions, reinforcing the fiduciary responsibility that funeral service providers have toward their clients. By mandating written consent for the disposition of surplus funds, the industry upholds the integrity of the agreement, ensuring that consumers retain control over their funds, and that they are used according to their original intentions. This principle is crucial in maintaining trust and accountability within the profession.