Thoughts Regarding The Wisconsin Funeral Master Trust Shortfall

Krause Funeral Homes and many other funeral homes are not members of the Wisconsin Funeral Directors Association (WFDA) and have never used the Wisconsin Funeral Directors Association Pre-Need Master Trust. Hopefully, this allows for some clarity on my part to make some observations as to what may and will happen because of this unfortunate situation.

Many funeral homes have used insurance or bank trusts to protect their consumers. These consumers and funeral homes are well protected by government insured funding products and have nothing to worry about.  The Wisconsin Funeral Master Trust was provided and administered by the WFDA and offered by some funeral homes as another way to set aside their client’s funds for future funerals.  It hoped to take advantage of aggressive investing and returns to offset rising funeral costs.  Just like investing in the stock market, the WFDA Master Trust was invested without the government safeguards and guarantees of banks or insurance companies. A $21 million shortage is now a reality for the funeral homes that chose that funding option to invest their client family’s money.

So who really stands to lose?  Well, many funeral homes guarantee their services and merchandise.  The consumers that have prefunded their funerals with one of these firms will be made whole and their funerals will operate without any change in what they purchased.  The funeral homes will have to take the loss because they invested poorly.  The fact that the deaths of the pre-arranged clients will happen over the next 20 years will lessen the financial impact to many of those funeral homes.

Please don’t get me wrong; I am not condoning the actions and lack of judgment by the Wisconsin Funeral Director’s Association.  Quite honestly, I feel it is more important for me to give some peace of mind to many consumers that have placed their faith in many funeral homes through out the state.  In the event some of the funeral homes that used the Wisconsin Funeral Directors Association Master Trust are no longer in business, any number of funeral homes are willing to honor the agreements of those trust accounts that are underfunded.  Taking care of these families and providing goodwill makes good sense for everyone. The funeral homes that offered the Master Trust instead of bank or insurance funding for funerals are not bad people; they just followed bad advice from their business association.  Their promises of “too good to believe” interest returns proved to be just that; too good to be true.

If you are a Wisconsin pre-need funeral purchaser, you did the right thing for you and your family.  You made decisions on many things without the financial or emotional pressure of having to on a very difficult day.  If you have a pre-funded funeral and you are concerned with how your funds are secured, please call your funeral home.  The Funeral Profession is not to blame; fault lies with a business association that put its interests ahead of their members and the families that trusted those funeral homes.  Placing the blame on all funeral homes is like saying all investors are like Bernie Madoff.  We all understand that investing is good and there are many great financial advisors.  This is not different except funeral consumers have engaged a profession that will step up to the plate and see that they are not short changed.  Regrettably, issues like this tarnish even the most reputable of firms.

It is my hope that the state will investigate this issue fully and bring those at fault to justice.  It is also my wish to have the state require audits of all funeral and cemetery trusts that are not protected by federal and state guarantees.  The public deserves it and many in funeral service demand this change.


Mark Krause
President, Krause Funeral Homes