Pre-Planning? Yes. Pre-Paying? Maybe Not.

More and more of my clients are considering pre-panning and pre-paying for their own funeral. For years I have recommended that my clients include their wishes for their final arrangements in their estate plans, but more and more people are bringing it up proactively.

Some of the reasons that people want to take care of their own final arrangements include:

  • Saving their loved ones the stress of dealing with it while they are grieving.
  • Making sure their wishes are carried out.
  • Setting aside funds and saving their family the financial burden.

These reasons are all very honorable. But it is important to do your homework before committing to any pre-paid program. Unfortunately, there have been a number of recent horror stores about pre-paid funerals of late.

A recent audit by the California Department of Consumers’ Affairs Cemetery and Funeral Bureau found that one of the state’s largest pre-paid trust programs had misspent at least $12.6 million. That is a lot of money taken from well-meaning, honest people who were just trying to care for their families. An in-depth 2006 article from the AARP entitled R.I.P. Off details other pitfalls consumers have fallen victim to when it comes to pre-paid planning.

In addition to worrying about whether the pre-paid funeral industry is using your funds as intended, there are several other pitfalls that need to be considered before investing your money in a pre-paid funeral plan.

For example, if you decide later that you need the money that you invested in the pre-paid funeral plan for reason such as family emergencies, you can lose a substantial amount of that money in cancellation fees. Further, pre-paying for your final arrangements with a life insurance plan can be even costlier. In fact, it is quite possible that you could end up paying a lot more money in monthly payments than your final arrangement will actually cost.

So, if you want to ease the burden for your family by planning and paying for your funeral ahead of time, what are you supposed to do?

Talk to your experienced estate planning attorney! An attorney can help you plan and pre-pay for final arrangements in a way that will be the most cost-effective and ensure that your family won’t have to deal with added unnecessary stress at a time when they should be dealing with their own grief.

Whether you’re thinking about making financial arrangements for your funeral, or you just want to make sure your family has all the protections they need from government bureaucracy, creditors, and predators, give our office a call at (919)443-3035 to register for an upcoming seminar or to schedule a Vision Meeting.

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