Selling the funeral home but keeping the cemetery (or vice versa)
By Jason Taken, Business Advisor, HedgeStone Business Advisors · Last reviewed · 7 min read
You can usually sell a funeral home and keep its cemetery, or the reverse, but the split must be engineered: separate land, staff, records, and combined preneed contracts, and get the cemetery regulator's approval for any change in the cemetery's owner. A few states bar common ownership outright, so in those states your buyer's portfolio may force the split.
Key takeaways
- Some states prohibit funeral home and cemetery common ownership. Our state research verified bans or separation rules in Maine, Michigan, New York, Rhode Island, Delaware, and Connecticut.
- The perpetual care fund stays with the cemetery. Expect regulator steps before a cemetery changes hands, such as Washington's new certificate of authority and seller-buyer attestations.
- Splitting usually costs combination margin, so price each side on stand-alone earnings, not on the share of a combined P&L.
- A post-sale cooperation agreement can keep burials running smoothly, but avoid per-referral payments; Delaware, for example, bars licensees from taking fees or commissions from cemeteries.
Most combination owners think of the funeral home and the cemetery as one business, because for years they were run as one: the same office answers both phones, the grounds crew sets up graveside chairs, and families buy a funeral and a grave at one table. Splitting them is less like selling a business and more like a divorce with a shared driveway.
This page covers what has to be separated and how. For selling the two together, see our guide to selling a funeral home with a cemetery.
Does your state allow one owner to hold both?
Most states we researched have no prohibition we could locate, but several restrict or bar funeral home and cemetery common ownership. In those states, a buyer that owns cemeteries elsewhere may be unable to buy your funeral home at all.
| State | Verified rule | What it means for a split |
|---|---|---|
| Maine | A licensee may not work for a funeral home that owns or controls, or is owned or controlled by, a cemetery (32 MRSA §1403) | Common ownership effectively barred |
| Michigan | A cemetery owner or operator may not own, manage, or operate a funeral establishment, directly or indirectly (MCL 339.1812) | Cemetery-owning buyers cannot buy the funeral home |
| New York | Cemetery corporations may not be controlled by, share funds with, or cross-market with a funeral entity (N-PCL §1506-a) | Separation required both ways |
| Rhode Island | Cemetery operators may not engage in funeral directing (R.I. Gen. Laws §5-33.2-9) | Keep operators and property separate |
| Delaware | No funeral establishment within or connected with a cemetery; no fees or commissions from cemeteries (24 Del. C. §3119) | Location and payment limits |
| Connecticut | No funeral directing in or on any cemetery (CGS §20-230) | Location limit; ownership elsewhere not expressly barred |
The sources are direct: Maine’s §1403, Michigan’s MCL 339.1812, New York’s §1506-a, and Delaware’s Title 24 funeral chapter. Elsewhere, “no prohibition located” is not the same as permission, so check your state’s page in our state guides.
What has to be separated, physically and legally?
Everything the two sides now share: land, access, people, equipment, records, phones, and contracts. Start with the land, because it takes longest.
Separation items in a funeral home and cemetery split
- Survey and legal description for each parcel, plus any subdivision or zoning approval your county requires
- Access easements for hearses, processions, and maintenance vehicles that cross the other parcel
- Parking, signage, and utilities that serve both buildings or the grounds
- Staff assignments: who works for which owner, and any shared-employee agreement during transition
- Equipment: backhoes, lowering devices, tents, and chairs, with a list of what goes where
- Records: interment register, maps, and lot cards stay with the cemetery; funeral case files go with the funeral home
- Phones, website, and obituaries, including which name families will see in search results
- Combined preneed contracts, split by component and matched to funding
A shared driveway or a cemetery road running behind the chapel needs a recorded easement with maintenance terms. If the split leaves either property without legal access, a lender will not finance it.
How does splitting change what each side is worth?
Usually it lowers the combined total, because shared costs must be duplicated. SCI’s FY2025 10-K reports 312 combination locations and says combinations typically have “a higher gross margin” than funeral and cemetery operations run separately.
Worked example: pricing each side on its own (illustrative)
All figures are made up for illustration. The combined operation earns $610,000 in adjusted EBITDA.
- Funeral home earnings, after charging it the full cost of its own office, grounds help, and staff: $395,000
- Cemetery earnings on the same basis: $140,000
- Lost combination savings: $610,000 − $395,000 − $140,000 = $75,000 a year
A buyer of either side pays for its stand-alone figure. Splitting the $610,000 by revenue share would overstate both.
The trade-off in valuation terms is laid out in our comparison of a funeral home with a cemetery vs. a standalone funeral home. Buyer pools differ too: funeral buyers are more numerous, while cemetery buyers are fewer and more specialized, as our profile of the cemetery operator as buyer explains.
Which side should you keep?
Keep the side that fits your family’s long-term goals and that buyers value least. Sell the side with the deeper buyer pool.
Owners most often keep the cemetery when relatives are buried there, when a family member wants to manage the grounds, or when the cemetery is close to full and would cut the funeral home’s price if bundled. That last case has a cost: a near-full cemetery still needs mowing, roads, and record-keeping long after sales stop, and its care fund income may not cover it. Owners keep the funeral home instead when they or a child want to keep serving families and the cemetery’s maintenance has become a burden. Before deciding, run both stand-alone P&Ls forward ten years, including maintenance with no new sales, and see which business you would rather still own.
What regulatory approvals does the cemetery side need?
If the cemetery changes hands, expect the cemetery regulator to act before or at closing, separately from funeral licensing. If you keep the cemetery, you keep its license, fund, and reporting.
Washington is a clear example. Under RCW 68.05.115, before a cemetery authority is sold, the acquirer must apply for a new certificate of authority and agree to be bound by existing prearrangement contracts, and seller and buyer each attest to endowment care and preneed trust reports. Other states set their own steps, and some require approval before a perpetual care trust can move. The fund itself stays with the cemetery; it never follows the funeral home.
Who honors combined preneed contracts after the split?
Each side honors its own components. The funeral home delivers the services and funeral merchandise; the cemetery delivers interment rights, opening and closing, and cemetery merchandise.
Many combination contracts were written as one document, sometimes funded from one account. Separate them line by line, match funding to each obligation, and confirm each side’s trust rules, which often differ between funeral and cemetery preneed. Families need one clear letter that names who will serve each piece. Our guide to whether the new owner will honor prepaid plans covers how to write it.
Should the two businesses sign a cooperation agreement?
Usually yes, for scheduling and service standards, but not for paid referrals. The goal is that a family burying a parent next spring never sees the seam.
A sound agreement covers opening and closing notice periods, weekend burials, tent and equipment use, and how complaints are handled. Avoid payments tied to referrals, exclusivity that restricts family choice, and shared marketing in states that forbid it. Delaware’s §3119 bars funeral licensees from accepting fees or commissions from cemeteries on lot sales, and New York forbids cross-marketing outright. List the agreement in your APA key-terms checklist so it is signed at closing, not promised.
What are the timeline, confidentiality, and tax issues?
Plan on a longer timeline than a single sale, because surveys, easements, and cemetery approvals run on their own clocks. Keep the circle small, since shared staff will learn quickly.
Order the survey before marketing. Expect the cemetery approval and the funeral license change to be the last items before closing. Families with interment rights do not need advance notice of a funeral home sale, but they should not learn about a cemetery sale from the sign.
On taxes, land shared by both businesses needs a basis split, cemetery inventory may be treated differently from goodwill, and a cemetery owned by a nonprofit association is not yours to sell. Talk to your CPA and attorney before you set the structure.
Where do funeral home and cemetery splits go wrong?
Treating separation as paperwork. Most problems surface on the ground: a road, a backhoe, a family’s combined contract, or a buyer whose other holdings make the deal illegal.
- Marketing before confirming who legally owns the cemetery and the land under each building
- Leaving access, parking, and utilities to a handshake
- Pricing each side on a share of combined earnings
- Splitting combined preneed contracts without matching the funding
- Agreeing to referral payments or exclusivity without a state-law review
- Ignoring whether a cemetery-owning buyer is barred by your state’s rules
With the separation mapped, the remaining steps look like any other sale, and the selling hub lays them out in order.
Frequently asked questions
Why would anyone keep the cemetery and sell the funeral home?
Common reasons are a buyer who does not want cemetery obligations, a family member who wants to keep the grounds where relatives are buried, or a cemetery with little remaining inventory that would drag down the price. Keeping it means keeping the maintenance duty, the records, and the regulator relationship, potentially for decades.
Who buys a cemetery without the funeral home?
Cemetery-focused operators, regional groups that already run cemeteries nearby, and occasionally religious or nonprofit organizations. The pool is smaller than for funeral homes. A cemetery with years of unsold developed space and a healthy care fund sells more easily than one near capacity with a fund that cannot cover maintenance.
Can the funeral home and cemetery keep sending families to each other after the split?
Yes, through ordinary cooperation, scheduling, and honest recommendations. Paying for referrals is different and may be prohibited in your state. New York bars cemetery corporations from cross-marketing with funeral entities. Have counsel review any written cooperation agreement before closing, and keep families free to choose.
What happens to a family that bought a grave and a funeral together?
The contract has to be split by component. The funeral services and merchandise usually follow the funeral home, while interment rights, opening and closing, and cemetery merchandise stay with the cemetery. Each side's share of the trust or policy funding should move with its obligations, and the family should receive a clear letter explaining who will serve each part.
Sources cited
- 32 MRSA §1403, Employment of funeral directors, embalmers or practitioners of funeral services by cemeteries prohibited — Maine Legislature
- Michigan Occupational Code, MCL 339.1812 — Michigan Legislature
- N.Y. Not-for-Profit Corporation Law § 1506-A, Cemetery corporations restrictions — New York Laws (Public.Law reproduction)
- Delaware Code Title 24, Chapter 31, Subchapter III (including § 3119) — State of Delaware
- Service Corporation International FY2025 Form 10-K — U.S. Securities and Exchange Commission
- RCW 68.05.115 (cemetery authority sale or transfer) — Washington State Legislature