Should you consider paying in advance for your funeral?

On Behalf of | Jul 19, 2024 | Probate And Estate Law

A well-developed estate plan is a gift for your loved ones after you are gone. This provides clarity and direction about both your end-of-life wishes and the disposition of your property through the use of powers of attorney, advance directives, a will, trusts and direct beneficiary designations.

One additional component that you may wish to consider adding is paying in advance for your funeral. Funerals can be expensive. According to the National Funeral Directors Association, the average cost for a funeral nationwide in 2021 was $7,848. By arranging and paying for your funeral, you can make sure that you have the services you want – and take the burden and financial strain of making those arrangements off your grieving family.

Funeral payment options to consider

Should you wish to cover the cost of your funeral in advance, there are several different methods to pursue to accomplish this. Here are a few options to consider:

  • Burial insurance: This is a smaller scale whole life insurance policy intended solely to cover the costs of end-of-life expenses, including a funeral and burial. As life insurance policies have designated beneficiaries, the proceeds of the policy would avoid probate following your death and pass straight to your beneficiaries.
  • Funeral trust: An irrevocable funeral trust allows you to designate assets specifically for your funeral and related expenses. With this option, you are able to designate your intended funeral home as the beneficiary.
  • Savings: Of course, you can use your own savings set aside for end-of-life expenses. With this option, your wishes should be clearly documented and communicated to your loved ones as these assets will likely pass through probate after your death.
  • Pre-paid funeral contract: Some funeral homes and providers offer pre-paid funeral plans or contracts. While these can be a straightforward solution, there are several pitfalls to be aware of, including that plans can be inflexible should the provider go out of business or rates increase. The Federal Trade Commission’s Funeral Rule has made it easier for consumers to contrast and compare funeral costs and Florida specifically has a process for consumers to file claims against the Preneed Funeral Contract Consumer Protection Trust Fund.

While setting aside funds in any way for your funeral is not a requirement, doing so has become increasingly popular due to the rising costs of such services. If you are interested in adding this to your estate plan, consider working with an estate planning attorney to discuss the options available to you.