Did you know that can pre-pay for your funeral? When you do so, your family will be relieved of the financial burden that comes with a memorial service. There are four common ways to cover the costs of your funeral in advance.
Funeral Insurance
Whoever said there is insurance for everything wasn’t kidding. When you purchase a funeral insurance policy, you will have the chance to name a beneficiary. This person can collect your insurance funds upon your death and use those funds for your funeral or to cover any other final expenses that arise.
Life Insurance
A life insurance policy is a good way to provide your family with easy access to money upon your death. These funds can be used to cover your loved ones’ living expenses and to pay for your memorial service and burial if other property and financial assets are trapped in probate.
Funeral Trust
A few funeral homes offer a Funeral Trust. This is an account into which you place funds for your funeral, which are then invested until your death. There are several problems with using a funeral trust offered through a funeral home. Many people have reported fraudulent activities including theft. Others claim they could not transfer the trust to another funeral home when they moved. If you do use a Funeral Trust, keep records of all premium payments and make sure your family members know where to find your policy information.
Some insurance companies are now offering Funeral Trust plans that offer safe-guards against these problems, including unlimited portability and a faster payout of benefits to your family members. This is a better option for most of our clients’ families.
Financial Account
If you are worried about the safety of a funeral trust, you may prefer to use a regular financial account to house your funeral funds. A joint checking or savings account allows the remaining person to inherit all funds, which can then be used for your memorial. Another option is a Payable on Death Account. Savings, checking, money market and retirement accounts allow you to name a beneficiary to receive all funds upon your death.
Planning for this contingency will help avoid the need for a family member to bear the cost of your funeral expenses.
Larry Parman
Attorney at Law
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