Making your final arrangements has many attractions.
You can get want you want, usually choosing goods and services at a guaranteed price. You can buy an “increasing benefit” life insurance policy to pay the funeral director or cemetery organization. You can also buy a pre-need trust, though you risk the funds being squandered and the trust going bankrupt.
Whichever method you choose, beware of cancellation penalties and hidden expenses. Just like your heirs, you might be subject to high pressure sales tactics – but you may be mentally better prepared to walk away from them. This is an investment on which you will not be earning money: you will be avoiding your estate overpaying later on.
Prepaid funerals are an especially good idea for people who may need Medicaid skilled nursing home care someday. Medicaid rules specifically allow the Medicaid Estate Recovery Program to collect before the burial or cremation and funeral are paid for.
Some people prefer to leave a small insurance policy or a bank account payable on death to someone whom they have instructed to make final arrangements. There is no law obligating them to do so. Will they? Will other family members think they have not done enough or not done the right thing? Sign an Appointment for Disposition of Remains and have them sign it, specifying what you want done and where the money is to come from. It’s no guaranty. But it may remind them what you want.
Elder law attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.