Pre-Need Funeral Arrangements: Is it Right for You?

Martinson & Beason

Although planning a funeral may be uncomfortable for some, many seniors are now making pre-need funeral plans to alleviate stress on family members when the time comes. According to a recent article published in The New York Times, “pre-need is a broad term that encompasses any type of pre-death planning, and it may or may not include paying for services in advance.” Although pre-need planning fulfills many objectives, it has the primary effect of providing peace of mind to both you and your loved ones. More specifically, pre-need planning allows you to make certain that your last wishes are known, and that your family can focus on the funeral without financial worries.

Pre-Need Planning: Administrative Choices

Pre-need planning enables you to make choices about the details of your body disposition and funeral so the burden does not fall to your loved ones. For example, pre-planning affords you the opportunity to make choices like whether you prefer to be buried or cremated; whether you prefer a traditional, formal funeral or a more simple memorial service; what music will be played at funeral service; and what clothing and jewelry you will be buried in.

Further, pre-need planning provides you with the opportunity to decide whom you want in charge of your funeral. Generally, the person in charge of your funeral is the executor of your Estate. However, this is not always the case, and it does not have to the case with you either. If there is someone you trust and you want him or her to administer your funeral, you can put them legally in charge. While there are many forms(that can be found online) to appoint a representative for funeral arrangements, it is important to keep in mind that States have different laws and regulations. Therefore, the best practice is to consult with your local attorney about appointing a representative for your funeral.

Pre-Need Planning: Pre-Paying

Similar to insurance policies, there are different pre-payment plans as it relates to your funeral. The most common types of pre-payment plans include 1.) Guaranteed plans and 2.) Non-guaranteed plans. Guaranteed plans set the prices when you buy the plan, regardless of how high the price may rise in the period between pre-payment and your death. On the other hand, non-guaranteed plans do not set the prices when you pre-pay. In subscribing to a non-guaranteed plan, the hope is that the money put toward the plan will grow over time through interest, and the interest earned will be able to cover the expenses at the time of your death.

As a caveat, if you make pre-payment arrangements for your funeral, make sure to tell your family. Unfortunately, it is not uncommon for a family to pay for the funeral of a loved one only to find out that their loved had made pre-payment arrangements. In such a situation, whether your family will be able to get money back is dependent upon the law in your State.

Pre-Need Planning: Pre-Paying Alternative

Although pre-payment plans are made through the funeral home, the money is kept by a 3rd party, either in a trust or a life insurance policy. Accordingly, you may desire to keep the money towards your funeral in your control. In this regard, setting aside money in a savings account is an alternative to making pre-payments on your funeral.

If you do open up a savings account, consider making the account available to whoever is the representative for your funeral. This can be done through the creation of a joint savings account or the creation of an account in which you name the representative of your funeral as the beneficiary. In both instances, the savings account bypasses the probate process.