Every family knows what it’s like to lose someone special like a mother, a father, a grandparent, or a treasured aunt or uncle. However, because people never accept death as a possible outcome – despite the fact that it is a definite outcome for all of us – most people don’t know where to begin when it comes to making funeral plans. But being in charge of your final expenses is vital to the end of life experience, and it can make life much easier on those left behind.
What Is The Greatest Gift You Could Give Your Loved Ones?
One of the greatest gifts you will give your family is one of the most overlooked. That gift is preparing them for the inevitable. The very first thing you will want to do is set up your estate planning by creating a Will or Trust. Did you know that over 70% of Americans have no form of estate plan? Why is that? Most think that a Will costs too much or that they don’t have enough assets to justify setting up a Will. That’s just not true. We all have some possessions to pass on, and do you want your family fighting over those assets? Do you want a court to have to decide who gets what?
By having a will or Trust, you take a step in the right direction toward planning your future financial wishes. The problem is, this form of planning fails to accomplish the most important task, which is addressing your family’s immediate concerns, which are funeral plans.
What Decisions Are Made After Someone Dies?
The person or persons that are responsible for taking care of your final arrangements and final expenses have some very important decisions to make. And they have to make them in a small time frame, usually just 2-3 days at most.
Most of these decisions require some type of financial arrangement. Financial decisions are difficult under normal circumstances, but having to make them while grieving the loss of a loved one can be unbearable.
You can be of tremendous help by having funeral plans that outline your final wishes.
Funeral Plans Are Integral To A Sound Estate Plan
Funeral pre-planning gives you the ability to choose how you are treated after your death, and it allows your family to focus on more important things such as grieving and recovery. Keep in mind that people don’t always make the best decisions under stress, so if you can make the decisions for them you will give your family a better thought process while dealing with your death.
When it comes to making funeral plans there are several things you will want to keep in mind.
- Interview several funeral homes and their directors.
- Choose a funeral home where you and your family feel most comfortable.
- Take family members with you when you interview funeral homes.
- Make sure you understand bereavement entitlements such as veterans, unions, pensions, Social Security and fraternities.
- Make sure your family and chosen funeral home know of your religious and moral convictions.
- Determine your method of disposition. Would you like a burial or cremation? Would you like a cemetery or entombment?
- Consider how you feel about things like casket viewing, religious aspects, who to invite, who to include in the ceremony, etc.
- Determine the cost of your funeral and the budget you would like to set.
- Check out the Federal Trade Commission’s free funeral planning information at their website. The FTC Funeral Rule requires funeral directors to give pricing information over the phone, as well as provide you with a readily available General Price List if you visit them in person.
Will You Pay For Funeral Expenses In Advance?
Planning your funeral arrangements in advance will help your loved ones with the details, but to really help them you should look into either prepaying for the funeral or purchasing final expense insurance.
Prepaying for your funeral or cremation is one of the most appreciated aspects of making funeral plans. Those left behind are always appreciative of this fact.
Lets take a look at some of the ways that people pay for their funeral plans when they are still alive…
Lots of people think that they can get by using their savings to pay for final expenses. This isn’t a bad plan. However, this doesn’t always work out.
First of all, the savings can be depleted before the person dies. It’s not guaranteed to to be there at the end of life.
Second, funds in a savings account are not always liquid enough to be readily available at death. This will still leave your loved ones paying for your funeral out of pocket since they probably will not have access to the savings funds until weeks after the funeral.
Third, the funds set aside for a funeral may not be sufficient anymore. What was put aside years ago isn’t going to be enough today.
Lastly, there are tax consequences to savings accounts, so part of that money that was supposed to pay for your funeral plans may actually go to Uncle Sam.
Which leads us to…
Pre-Need Trust Agreements
Another way to prepay for your funeral is to use a Pre-Need Trust Agreement. Some people get nervous thinking about trusts, but it’s not too complicated.
Generally speaking, Pre-Need Trust accounts are funded with monthly payments that are invested in a fund which is designed to grow over time. A trust account is designed to provide protection against inflation, but that is not always the case.
So how to you pay for funeral plans where you know exactly what you’ll have at the end?
Lets find out about…
Term Life Insurance
Term Life Insurance is thought of as the simplest way to provide funds for your beneficiaries after your death.
Term Life Insurance has a set number of years where you pay a premium, and if you die during that time the insurance company will pay out the face amount of the policy.
It is a great way to pay for final expenses, because it is a very liquid asset (just need a check from the insurance company) that is not part of your estate. The money can be used for anything to pay for your final expenses.
The bad thing about term life insurance is that it will expire once you reach a certain age, usually 60 or 65. If you die after that age then the policy pays out nothing.
So, what kind of life insurance policies do not expire and can be used to pay for funeral plans?
The best way to pay for funeral plans is funeral insurance…
Funeral insurance is a whole life (or permanent life) insurance policy that is designed to cover any costs or final expenses which are related to your funeral.
When you die, the insurance company will pay out a sum of money to your family, and they can use that money to pay for things like flowers, burial plot, grave marker, etc.
A funeral insurance policy will never expire. As long as you keep up with your premiums, the policy will be there when you die.
How To Buy Final Expense Insurance To Pay For Funeral Plans?
Talking about your funeral is not a subject people like to discuss. However, it is necessary, and making sure your family can pay for your funeral will save them money and heartache.
Preparing your funeral plans in advance will be one of the greatest gifts you can give you loved ones.