A complicated financial situation has caused some big headaches for funeral chapels across Missouri.

More than 350 funeral homes in Missouri contracted with National Prearranged Services, a company headquartered in St. Louis, Mo., for prearranged funerals.

Customers locked in funeral prices with contracts then NPS put the money into trusts. NPS invested that money to make a profit to cover the cost of inflation so that when the customer died, the inflationary costs increase for the funeral was covered.

NPS took 20 percent as profit.

NPS initially bought whole life insurance as an investment from Lincoln Memorial Life Insurance, of Austin, Texas, a subsidiary of the same company that owns NPS.

Then NPS decided to purchase term life insurance, but once the terms ran out, then the money was gone.

Some people believe NPS may have lost $300 million nationally, and $135 million Missouri. There are 46,000 customers who are affected in Missouri.

The state of Texas took over the company that owns NPS and Lincoln Memorial Life Insurance and will continue to pay on the contracts, but only what the contracts are worth and not the inflationary value.

That means the funeral homes, by law, will have to cover the difference between the contract price and the actual price of a funeral.

For example, if a customer paid $2,000 for a funeral 10 years ago, but the same funeral costs $7,000 in 2008 then the funeral home would be required by law to cover the $5,000 difference.

Meyers Funeral Chapel Blue Springs will honor all contracts but is threatening to sue NPS to recoup their loss if they incur any.

For customers, the concern is that if a funeral home they've contracted with goes bankrupt, their families could have to pay for their funerals.

Click here to download (.pdf) a letter from Meyers Funeral Chapel Blue Springs for further explanation of the situation.