Pre Paid Funerals- A Crying Need to Bury the Old Ways of pre paying for the inevitable
With the promise of “locking in at today’s prices” or “ease your family’s burden”, funeral homes across the country have convinced millions of people to pre fund their funerals. A special “guarantee” when the inevitable day comes, that you’ve taken care of everything. Unfortunately though, many unsuspecting families have been buried by guarantees that failed to deliver on promises. To often funeral homes change hands, close their doors, or raid trust funds, then, when services are needed, there’s no money. But now there is a safe, secure and less stressful way to pre pay funeral expenses without going to a funeral home. By funding your own Funeral Expense Trust, you can avoid all the potential risk’s of pre paying at a funeral home.
What is a funeral expense trust?
A funeral expense trust is simply a single pay whole life policy (you pay the entire policy before it’s issued), which is placed into “Trust” for safe keeping until you pass away. Because the policy itself is owned by your “Funeral Trust”, it is protected from Medicaid, offers tax free benefits and is protected by inflation with simple interest growth. The benefit is paid within 48 hours to any funeral home and for any funeral related cost. Any excess money is paid to your estate or named beneficiary and cannot be kept by a funeral home. There are no health questions and guaranteed acceptance up to 99 years old.
Why a Funeral Expense Trust?
By having your own funeral expense trust, and not locking into a particular funeral home, protects your money from embezzlement or the chance of losing money if the funeral home goes out of business. And if you move, die while traveling, change your funeral from burial to cremation or if the funeral home changes owners, you may not get all your money back or be able to transfer to a new funeral home. Your Funeral Expense Trust is good at any funeral home, anywhere, and can be used to pay any funeral-related cost.
Isn’t it wise to “guarantee prices” at a funeral home?
Funeral homes only guarantee their service charge and merchandise on a pre need contract. There are many items found on a funeral bill that are not guaranteed on a pre need contract because these items cannot be calculated prior to death. These third party merchandise items include; cemetery opening and closing, obituaries, flowers, clergy honorariums, death certificates, vault setting fees and crematory fees. These item’s can cost thousands of dollars, and must be paid by the decedent family; in addition to what has already been paid for in the pre need contract. You should also consider that you are paying huge mark-ups on funeral merchandise. With the addition of foreign made caskets, casket wholesalers and casket stores; the price of caskets will be falling. The price of your casket could be hundreds to thousands of dollars less in the future.
Why is a Funeral Expense Trust the better way to pre pay funeral expenses?
Having your own funeral expense trust allows your family to have a funeral budget to pay funeral expenses, it keeps your family in control, and helps to avoid any possible financial heartaches. When paying for a funeral, there are only two “set” cost that must be paid: the funeral homes service charge and the type of disposition; burial, cremation or donation. All other expenses associated with funerals such as casket, flowers, obituaries, memorial cards, etc. can be determined when the other “set” items have been paid. For example; a family has $10,000 in a funeral trust. They want a traditional funeral with a burial. The family pays the two “set” cost first, the funeral home service charge of $5000 and the cemetery cost for opening the grave of $1500 for a total of $6500. The remaining $3500 is used to pay for optional items such as casket, vault, obits, clergy, flowers etc. This allows family’s to spend only what they have, and keeps them in control. This type of budgeting works with any type of funeral selected, as long as proper funds have been put into the trust.
Buyer Beware!
Like any other major purchases, funding your own funeral trust can have some drawbacks. First, make sure the person setting up the trust is an expert in funeral planning and cost. Understanding the maze of different cost associated with funerals and how to determine them is of utmost importance for someone who offers a funeral expense trust. Under funding of your trust would require your family to pay any shortages (just what you wanted to avoid). Secondly, they should be knowledgeable on all aspects of the laws and benefits associated with funerals. There are many situations when expert advisor can potentially save family’s thousands of dollars by educating them on benefits that are available. They should also be able to explain the laws involved with funerals and help families understand their legal rights. So please, take the time to ask questions, understand all your options and do what’s best for you and your loved ones.
Having a funeral expense trust and your final wishes documented is one of the most loving gifts you can leave your family. And remember, if planning your funeral seems difficult, imagine how hard it will be for your family!
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