    OFPlCE OF THE ATTORNEY   GENERAL.   STATE OF TEXAS

    JOHN    CORNYN




                                                September 1,200O



Mr. Randall S. James                                     Opinion No. JC-0279
Commissioner
Texas Department of Banking                              Re: Authority of individual designated to handle
2601 North Lamar Boulevard                               disposition arrangements for a decedent to modify
Austin, Texas 787054294                                  the terms of a prepaid funeral benefits contract,
                                                         and related questions (RQ-0215-JC)

Dear Commissioner      James:

        You ask whether and to what extent section 711.002(g) of the Texas Health and Safety Code
prevents the person handling disposition arrangements for a decedent from changing the funeral
arrangements specified in a prepaid funeral benefits contract. Section 711.002(g) of the Health and
Safety Code states that a person may provide written directions for the disposition of his or her
remains in a prepaid funeral contract, among other written instruments, and that these directions may
be modified or revoked only in a signed writing. You ask to what extent section 711.002(g) of the
Health and Safety Code limits changes in the funeral arrangements specified in a prepaid timeral
benefits contract if the decedent signed the contract and is the named beneficiary.              Section
711.002(g) applies only to changes in directions for “disposition” of the decedent’s remains that are
included in a prepaid funeral services contract (or other written instrument), that is, directions for
burial or an alternative, such as cremation, whereby the remains reach their final resting place. If
the decedent is the named beneficiary but did not purchase and sign the contract, section 711.002(g)
does not apply to changes of the disposition instructions found in a prepaid funeral services contract.
The application of section 7 11.002(g) is not affected by the fact that the contract is not fully paid at
the time of the purchaser/beneficiary’s   death.

         Chapter 154 of the Texas Finance Code vests in the Texas Department of Banking (“the
Department”)     regulatory power over the business of selling prepaid funeral services and
merchandise.    Sexton v. Mount Olivet Cemetery Ass ‘n, 720 S.W.2d 129, 132 (Tex. App.-Austin,
1986, writ refd n.r.e.). Sellers of prepaid funeral benefits must hold a permit issued by the
Department and must comply with provisions designed to protect the funds received from
purchasers. TEX. FIN. CODE ANN. ch. 154, subchs. C. (permit requirement); E. (insurance-funded
prepaid funeral benefits); F. (trust-funded prepaid funeral benefits) (Vernon 1998 & Supp. 2000).
Sales contracts for prepaid funeral benefits must be on a form approved by the Department, and must
“state the details of the prepaid funeral benefits to be provided, including a description and
specifications of the material used in the caskets or grave vaults to be furnished.” Id. $ 154.15 1
(Vernon 1998). “Prepaid funeral benefits” means “prearranged or prepaid funeral or cemetery
Mr. Randall S. James - Page 2                           (K-0279)




services or funeral merchandise, including an alternative container, casket, or outer burial container.”
Id. 5 154.002(g) (Vernon Supp. 2000). It does not include a “grave, marker, monument, tombstone,
crypt, niche, plot, or lawn crypt” unless it is sold in contemplation of trade for a funeral service or
funeral merchandise subject to chapter 154. Id. “Funeral service” is defined as a service sold or
offered for sale on a preneed basis that may be used to:

                           (A)    care for and prepare a deceased human body for burial,
                   cremation, or other final disposition; and

                            (B)     arrange, supervise, or conduct a funeral ceremony or
                   the final disposition of a deceased human body.

Zd. 5 154.002(12).

        You first inquire about the extent to which section 711.002(g) ofthe Health and Safety Code
bars a person handling disposition arrangements from changing the funeral arrangements specified
in a matured prepaid funeral benefits contract if the decedent, as purchaser, signed the contract and
is the named beneficiary.     You state that a “matured” contract is a contract that has become
performable due to the death of the beneficiary. Request Letter at 2 n.3.’

           Section 711.002 of the Health and Safety Code provides in part as follows:

                            (a) Unless a decedent has left directions in writing for the
                   disposition of the decedent’s remains as provided in Subsection (g),
                   the following persons, in the priority listed, have the right to control
                   the disposition, including cremation, of the decedent’s remains          :

                               (1) the person designated in a written instrument
                           signed by the decedent; .

                                .


                           (g) 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 govern the
                  inscription to be placed on a grave marker attached to any plot in
                  which the decedent had the right of sepulture at the time of death and
                  in which plot the decedent is subsequently interred. The directions
                  may be modified or revoked only by a subsequent writing signed and


           ‘Letter from Randall S. James, Commissioner,   Texas Department of Banking,   to Honorable   John Comyn,
Attorney    General of Texas (April 3.2000) (on tile with Opinion Committee).
Mr. Randall S. James - Page 3                    (JC-0279)




               acknowledged by such person. The person otherwise entitled to
               control the disposition of a decedent’s remains under this section
               shall 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.

TEX. HEALTH & SAFETYCODE ANN. § 711.002(a), (g) (Vernon Supp. 2000) (emphasis added).

        Section 711.002 of the Health and Safety Code enables a person to control the disposition
ofhis remains. This provision addresses changes in prepaid funeral contracts only to the extent that
they govern “the disposition    of the person’s remains.” The effect of section 711.002(g) on the
modification of such contracts depends on the meaning of “the disposition          of the person’s
remains.”

         Neither the phrase “disposition      of the person’s remains” nor the term “disposition” are
defined in chapter 711 of the Health and Safety Code. Words and phrases are to be read in context
and construed according to the rules of grammar and common usage. TEX. GOV’T CODE ANN.
§ 3 11 ,011 (a) (Vernon 1998). If words or phrases have acquired a technical or particular meaning,
whether by legislative definition or otherwise, they shall be construed accordingly. Id. 5 3 11 .Ol l(b).
We look at this phrase in the context of section 711.002. Subsection 711.002(a) provides that, ifthe
decedent has not left written directions, specific persons “have the right to control the disposition,
including cremation, of the decedent’s remains.” (Emphasis added.) Subsection 711.002(g) of the
Health and Safety Code states that “[a] person may provide written directionsfor       the disposition,
including cremation, oftheperson’s remains” in a will, a prepaid funeral contract, or another signed,
written instrument.    (Emphasis added.) Section 711 .OOl of the Health and Safety Code defines
“interment” as “the permanent disposition of remains by entombment, burial, or placement in a
niche.” Thus, “disposition” includes the burial, entombment, or cremation of the body. TEX.
HEALTH&SAFETY CODE ANN. 5 711.001(16) (Vernon Supp. 2000).

         “Disposition” is used in the same sense in other statutes. Chapter 651 of the Occupations
Code, which regulates funeral directing, defines “funeral service” as a service performed for the care
and preparation of a deceased person “for burial, cremation, or other disposition.” TEX. OCC. CODE
ANN. 5 651.001(8) (Vernon 2000) (emphasis added). The statute defines additional terms in
connection with preparation of the remains “for burial, cremation, or other disposition.” See id.
$5 651.001(4) (funeral director); 651.001(7) (funeral merchandise) (emphasis added). Disposition
of a body also includes the place of burial. See generally Frank D. Wagner, J.D., Annotation,
Enforcement of Preference Expressed by Decedent as to Disposition of his Body After Death, 54
A.L.R.3d 1037 (1973). Moreover, in discussing a county’s disposition of a pauper’s remains, we
have determined that “disposition” includes burial, cremation, or donation of the body to a medical
facility. Tex. Att’y Gen. Op. JC-228 (2000) at 5. We conclude that in section 711.002(g) of the
Health and Safety Code “disposition” means burial or an alternative, such as cremation, whereby
human remains attain their final resting place. Accordingly, directions for disposition included in
the decedent’s contract for prepaid funeral services (i.e., for burial, cremation or entombment) may
Mr. Randall S. James    - Page 4                  (JC-0279)




be modified or revoked only by a subsequent writing signed and acknowledged by the decedent.
TEX. HEALTH & SAFETY CODE ANN. 5 711.002(g) (Vernon Supp. 2000). Section 711.002(g) does
not apply to other purchases of funeral merchandise or services that may be covered by a prepaid
funeral services contract.

         With respect to the first question, you ask whether it makes a difference that the contract is
not fully paid and has a balance due at the time of the purchaserbeneficiary’s    death. Request Letter
at 2. Section 711.002 provides that a person’s written directions in a will, a prepaid funeral contract,
or a written instrument signed and acknowledged by that person as to the disposition of his or her
remains “may be modified or revoked only by a subsequent writing signed and acknowledged by
such person.” TEX. HEALTH & SAFETYCODE ANN. 5 711.002(g) (Vernon Supp. 2000) (emphasis
added). It does not authorize changes in the disposition of the person’s remains merely because the
prepaid funeral contract has a balance due at the time of the purchaser’s death. The prepaid funeral
contract is not necessarily the only source of funds to pay for the beneficiary’s funeral, because
funeral expenses are also claims upon a decedent’s estate. TEX. PROB. CODE ANN. 5 3(c) (Vernon
Supp. 2000). As we have stated, however, section 711.002(g) of the Health and Safety Code does
not apply to all purchases of funeral merchandise or services that may be covered by a prepaid
funeral services contract. Thus, section 711.002(g) does not apply to certain changes in prepaid
funeral contracts, such as the number of limousines provided for relatives of the deceased.

         You next ask about the effect of section 711.002(g) on modifications of prepaid funeral
contracts if the decedent is the named beneficiary but did not purchase and sign the contract,
Request Letter at 2. We answer this question by reading the reference to prepaid funeral contracts
in its context in section 711.002. See TEX. GOV’TCODEANN. 5 311.01 l(a) (Vernon 1998). Section
771.002 refers to written directions for disposition of the decedent’s remains that have been signed
by the decedent. See TEX. HEALTH& SAFETYCODEANN. 5 711.002(a) (Vernon Supp. 2000) (listing
persons who have right to control disposition of decedent’s remains “[ulnless a decedent has left
directions in writing for the disposition of the decedent’s remains as provided in Subsection (g)“).
Such written directions may be modified or revoked only by a “subsequent writing signed and
acknowledged by such person.” Id. 5 711.002(g). The written directions must be left by the
decedent and must be as provided by subsection 711.002(g), which states that aperson may provide
written directions for the disposition of his or her remains “in a will, a prepaid funeral contract, or
a written instrument signed and acknowledged by such person.” A will is ordinarily signed by the
testator in person or by another person for him by his direction. TEX. PROB. CODE ANN. § 59
(Vernon Supp. 2000). A ‘written instrument signed and acknowledged” by the person clearly bears
the decedent’s signature. In our opinion, only a prepaid funeral contract signed by the decedent is
 subject to the restrictions of subsection 711.002(g). In this way, we read the reference to “prepaid
 funeral contract” consistently with its immediate context. Moreover, aperson may modify or revoke
 written directions for disposition of his or her remains only “by a subsequent writing signed and
 acknowledged by such person.” TEX. HEALTH& SAFETYCODE ANN. 5 711.002(g) (Vernon Supp.
 2000). It is consistent with this provision to conclude that the prepaid funeral contract subject to
 section 711.002(g) must have been signed by the person who is the beneficiary of the contract.
Mr. Randall S. James - Page 5                    (JC-0279)




       You fourth question is as follows:

               If the purchaser of a prepaid funeral benefits contract is the contract
               beneficiary, must he or she comply with the acknowledgment
               requirements of 5 711.002(g) in order to cancel or modify the
               contract?

Request Letter at 2. You inquire about circumstances where the beneficiary of the prepaid funeral
benefits contract has signed as purchaser so that the contract is subject to section 711.002(g) of the
Health and Safety Code. The beneficiary of the contract is not required to comply with the
acknowledgment     requirements of section 711.002(g) in order to change any provisions of the
contract except those that direct the “disposition” of the remains as defined in answer to your first
question.
Mr. Randall S. James - Page 6                    (JC-0279)




                                       SUMMARY

                         Pursuant to section 711.002(g) ofthe Texas Health and Safety
               Code, a person may provide written directions for the disposition of
               his or her remains in a signed, written instrument, including a prepaid
               funeral contract, and these directions may be modified or revoked
               only in a signed writing. Section 711.002(g) applies only to changes
               in directions for disposition of the decedent’s remains, that is,
               directions for burial or an alternative, such as cremation, whereby the
               remains reach their final resting place, and does not apply to other
               goods and services purchased under a prepaid funeral services
               contract.     If the decedent is the named beneficiary but did not
               purchase and sign the prepaid funeral services contract, section
               711.002(g) does not apply to changes of the disposition instructions
               found in a prepaid funeral services contract. The application of
               section 711.002(g) is not affected by the fact that the contract is not
               fully paid at the time of the purchaseriheneticiaty’s    death.




                                              Attorney General of Texas



 ANDY TAYLOR
 First Assistant Attorney General

 CLARK KENT ERVIN
 Deputy Attorney General - General Counsel

 SUSAN D. GUSKY
 Chair, Opinion Committee

 Susan L. Garrison
 Assistant Attorney General - Opinion Committee
