It seems like more and more families are paying for loved ones’ funerals by starting GoFundMe campaigns. Even a modest service can run into thousands of dollars. Not everyone can just put that on a credit card and wait until the deceased person’s estate is settled to get their money back (if they do).
If you’re going to be developing your estate plan, you have an opportunity to specify not just your wishes for your remains (cremation or burial), but what kind of ceremony – if any – you’d like. Even if you want to have your cremains sprinkled in the Atlantic, it takes some money and planning.
That money will be needed before your inheritances are disbursed. That’s why it’s typically wise to determine what your burial or cremation wishes will cost and make the funds available to the person(s) you designate to handle them upon your death.
Is a prepaid funeral plan a good idea?
This might sound like the simplest way to get what you want and cover the cost yourself. Many funeral homes offer prepaid plans. However, once you’ve paid that money, it may not be easy to get it back, and you may end up moving or needing the money for other things – like medical bills. If you do set up a prepaid plan, make sure your family and/or executor knows about it. Don’t just include the information with your estate plan documents.
What about an insurance policy?
Various types of burial insurance policies are intended to cover funeral and burial expenses as well as final medical bills. These are often expensive, but if you like this idea, choose very carefully and read the fine print. Again, make sure the right person knows about it – and what your wishes are.
A designated bank account
This can be the simplest and least expensive option. Set up a joint account with the person you choose to handle your arrangements. This way the money will be available to them immediately. You can also make it an individual account with a payable-on-death (POD) designation for the person who will need to access the money.
Having experienced legal guidance as you craft your estate plan will help you make the best decisions for yourself and your family and help ensure that they have access to everything they need to carry out those wishes.