Recent surveys reveal that over 90% of Americans believe that a funeral or memorial ceremony remains a valuable and meaningful event that commemorates the life of someone who has died. Almost 70% of individuals would like to have a say in the planning of their funeral or memorial service. But, only 23% of survey respondents have taken any action at all in planning or discussing their final wishes.
In today's funeral marketplace when an individual does consider taking steps to plan for their inevitable passing, the first option that comes to mind are the many pre-paid funeral plans offered by almost every funeral home and mortuary. There are many pitfalls in the pre-pay approach:
Instances of fraud are common.
Funeral home operations go out of business or may be bought or sold. Agreements may or may not be honored after a change in ownership.
If you relocate the agreement may not be transferable.
Not all funeral costs are covered in the pre-paid plan.
Pre-paid plans pay for goods that are sold at a greatly inflated cost. These goods could be bought at a lower cost on the marketplace when the need occurs.
The Federal Trade Commission, The AARP, many State and local consumer protection offices and most financial planners either directly recommend against pre-paying for funeral arrangements or offer strong words of caution for consumers who consider entering into a pre-paid agreement.
But, the value of pre-planning your funeral/memorial choices and making appropriate financial arrangements to cover final expenses can't be over emphasized.
Documenting your requests as to how your funeral should be conducted grants you peace of mind and alleviates your family from the stress of "hoping" that they have made choices that you would have liked. Additionally, establishing a savings or investment trust to build a "final expenses fund" ensures that money will be available when needed to cover costs without impacting the remainder of your estate or requiring your survivors to incur debt.
I work with my clients to prepare a detailed funeral plan that covers disposition choices, casket or urn selection, type and choreography of the service and many other details that will be required by your survivors. Additionally, I counsel on personal banking/investment strategies that are available for POD (paid on death) accounts to fund your final arrangements.