EAU CLAIRE, Wisc. (WEAU) - A new settlement could save people millions in funeral costs that were lost through bad investments.
The Wisconsin Funeral Trust lost $22 million in high risk investments, but the new settlement could cover families, and soften losses for funeral homes.
Smith Funeral Chapel Director Laura Sandberg said the trust was first seen as a great opportunity for families to save for their final expenses.
The Wisconsin Funeral Trust offered more than three percent interest on its accounts, in what was considered a safe investment for those looking ahead, she said.
After early success, the trust soon took a major hit.
"There's investments being made, by a certain company, and they were not being made correctly. And if everyone who had a trust today was to die, there wouldn't be enough money to pay for all those funerals," Sandberg said.
Money managers put the cash into high-risk investments, losing 22 million dollars, about 40 percent of families' savings.
But homes like Smith in Eau Claire, and Jack Funeral Homes in Whitehall, have promised that families won't take the hit.
"We as a funeral home are guaranteeing everything that we promised those families. We want to stand by our word and we will stand by our word," Sandberg said.
With most funeral homes covering what was lost, Sandberg said some could lose everything.
"They were trusting 100 percent of their pre-arrangements. That could hurt them dramatically and they could go out of business."
She said the new proposal would ensure that families wouldn't lose their money and that homes would be reimbursed if more funds become available.
Sandberg said Smith has more than 100 accounts in the trust from area families. Jack Funeral Homes said it has about 150.