Failing to plan for your own funeral and burial could cost your loved ones, in more than one way, after you are gone. First, your loved ones may end up paying more than they should for your funeral services. Moreover, in the absence of concrete guidance from you, the chance of confusion or conflict increases dramatically. Ultimately, loved ones could end up in a contentious battle over the details of your funeral that could cause a rift in the family for many years to come. Finally, surviving loved ones will be forced to come up with the funds necessary to pay for your funeral and burial services within days of your death. Is a pre-paid funeral plan the right solution? The Long Island estate planning attorneys at Eghrari Wealth Training Firm point out some common problems with relying on a pre-paid funeral plan.
Pre-Paid Funeral Plans
By thinking ahead and pre-planning your own funeral and burial you will not only ensure that your own wishes are honored but you will also limit the stress and anxiety your loved ones would be under if they were forced to handle all the details. The question remains, however, whether a pre-paid funeral contract is the best way to plan ahead. Factors you may wish to consider before committing to a pre-paid funeral contract include:
- If you move your plan is worthless. No matter how certain you are right now about your future plans, they could change. If they do, you could end up living far away from where you are now, meaning you are far away from the funeral home. A late in life love and remarriage, grandchildren, or even health issues could all cause you to move to another city or state, making your funeral plan worthless.
- Modifying terms is typically not possible. Pre-paid funeral contracts lock everything in as of the date you execute the contract. Pre-paying at today’s prices is the incentive to enter into these contracts; however, you are also locking in all the details of your funeral. If you decide you want something different, such as to be cremated instead of buried, or to be buried next to a new spouse because you remarried, you probably cannot modify the terms of the contract.
- The funeral home could go out of business. Like any business, the funeral home could go out of business or wind up in bankruptcy. If either of these occurs, you are probably out of luck. If you enter into a contract when you are 60 and live to be 85, a lot can happen to that business in the intervening 25 years.
- Settling disputes is all but impossible. Unlike most contract disputes, litigating a dispute over a pre-paid funeral contract isn’t a viable option because there is a very small window of opportunity for the contract to be fulfilled – and the family and loved ones need it to work flawlessly or it is really of little use.
Why an Irrevocable Life Insurance Trust (ILIT) May Be a Better Choice
An Irrevocable Life Insurance Trust (ILIT) is a special type of trust that is funded by the proceeds of a life insurance policy. As the Settlor, you create the trust and appoint a Trustee to administer the trust. This should be the person you wish to oversee your funeral and burial after you are gone. You then purchase or transfer in, a life insurance policy, the proceeds of which pay out immediately into the trust upon your death. Those proceeds then fund your funeral service. You can also use the trust terms to ensure that your burial and funeral are carried out according to your wishes using any funeral home in any city.
Contact Long Island Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to incorporate funeral planning into your estate plan, contact the Long Island estate planning attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.