Pre-Need Funeral Planning

Planning ahead for your funeral has now become an extension of estate planning and is becoming more and more common. Thinking ahead means that people make clearer and more thoughtful decisions about funeral arrangements, while taking away some of the stress from their loved ones.

Funeral & Burial Arrangements: How to Plan Ahead

• When you decide on a funeral home, you can make your pre-need funeral arrangements directly with the facility you choose.

• Familiarize yourself with the Federal Trade Commission’s (FTC) Funeral Rule that protects consumers from unscrupulous providers.

• You can also use a funeral planning or memorial society, which is a nonprofit organization that gives information about funerals and disposition, but does not offer actual funeral services. (Note: Some funeral homes use the word “society” in their names, but are not non-profit organizations, so be sure to ask.)

• You may choose to make funeral arrangements in advance, but choose to not pay in advance. This is a little risky, as funeral prices can fluctuate, and it’s best to lock in a reasonable rate.

• You may choose to not pre-plan the funeral, but you can decide on where your remains will be buried or entombed, and purchase a plot in advance so your loved ones won’t have to do so in a hurry, under stressful circumstances.

What To Do Once You Have Pre-Planned Your Funeral

• Make sure all funeral and burial arrangements are in writing.

• Give a copy to family members and to your attorney, and keep a copy for yourself in an accessible place. (Note: Just putting the information in your will is not helpful because wills are often not read until after the funeral.)

• Safe deposit boxes are great for safekeeping, but they shouldn’t be the only location for the funeral documents. Funeral arrangements may need to be made before family members can get into the box.

• Be sure to review your funeral and burial arrangements once every two years.

Prepaying Costs for Your Funeral & Burial

Laws about funeral prepayment vary state to state. Some states require the funeral provider to put a portion of the prepayment in a state-regulated trust or to purchase a life insurance policy with the death benefits assigned to the provider. But other states offer no protection to ensure that advance payments are available to pay for the funeral when they are needed. Make sure you know what the funeral and burial prepayment laws are in your state.

Before you prepay costs for funeral services, consider:

• What are you paying for? What merchandise and/or services are included? Are you paying for goods, like a casket, or just services?
• What happens to your prepaid money? How and where is it held?
• What happens to interest income on prepaid money?
• Is there financial protection if the funeral home goes out of business or changes hands?
• Can you cancel the contract and get a full refund?
• What happens if you move or die away from home? Can funeral plans be transferred and, if so, is there added cost to transfer the plans?

Communicate Your Funeral & Burial Arrangements

Even if you choose not to make formal pre-need funeral arrangements, your family and trusted advisors, such as attorneys, need to know your preferences so they can make sure your wishes are followed. Nobody likes to think these things, but discussing this before the need arises can relieve anxiety about honoring your desires when the time comes.