Throughout your lifetime you undoubtedly have given countless gifts to loved ones. In your estate plan, you likely also provided detailed instructions about gifts to be distributed to your loved ones. One final gift you may not have considered giving the people you love, however, is the gift of funeral planning. Not only is this a meaningful and practical gift to give to the people you love, but you also benefit by ensuring that your wishes will be honored after you are gone. To get you started, the attorneys at Legacy Care Law Firm discuss how funeral planning should be the final gift you give to your loved ones.
Death Is Expensive and Funeral Planning Is Complicated
While you might not have contemplated it before, the truth remains that the cost of funerals can be quite substantial. Experts indicate that an average, modest funeral and burial can exceed $10,000 in expenses. If you factor in additional expenditures such as an expensive casket, elaborate headstone, burial plot, and an extensive memorial service to commemorate your life, the cost can soar beyond $20,000. Furthermore, your grieving loved ones might end up spending more than necessary if they are required to make decisions shortly after your passing, when their emotions are still raw, leaving them vulnerable to sales pressure.
Like many individuals, you might have strong preferences concerning the handling of your remains and the type of service you want (or don’t want) to honor your life. Making decisions when they are highly emotional, however, can lead your surviving loved ones to make bad decisions that waste money and fail to honor your wishes.
On top of all this, your loved ones will also need to secure the funds required to cover the expenses if you haven’t made prior plans. Understandably, this added stress can cause your loved ones to end up in heated discussions that can turn into conflicts. By including a funeral planning component in your comprehensive estate plan, you can avoid all these potential problems, effectively giving you and your loved ones one final important gift.
A Written, Enforceable Plan Is Necessary
You may have expressed your wishes to your spouse or adult children, explaining in great detail what you want and do not want after you are gone. You may have even discussed how to pay for everything. In reality, however, verbally explaining your funeral and burial plans is not sufficient. Your loved ones are likely to forget the details you discussed with them because of their emotional state following your death. Often, however, the bigger problem occurs when loved ones do not agree with your wishes. For instance, if you were adamant that you do not want a traditional funeral, but your spouse and/or children do not agree with those wishes, you will not be there to make sure those wishes are honored. For these reasons, you need a funeral plan in writing and one that is legally enforceable.
Is a Pre-Paid Funeral Contract a Good Idea?
In theory, a pre-paid funeral contract lets you plan your own funeral and pay for it in advance, saving your loved ones the emotional stress and financial worry. Among the numerous problems with relying on a pre-paid funeral contract are:
- You may not be able to modify the terms once the documents are signed.
- If you move before you pass away the contract cannot help you.
- The funeral company could declare bankruptcy or go out of business.
- If there is a dispute, it practically cannot be resolved.
What Is an Irrevocable Life Insurance Trust and How Can It Help with Funeral Planning?
For many people, the key to resolving all of these concerns and ensuring that their wishes are honored can be found in an Irrevocable Life Insurance Trust (ILIT). An 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 whose job is to administer the trust. You then purchase, or transfer in, a life insurance policy to the trust.
Upon your death, the proceeds of the life insurance policy held by the trust will pay out immediately into the trust. Those proceeds are then available to be used to fund your funeral service. Ensuring that funds are available to pay for your funeral and burial is reason enough to consider adding an ILIT to your estate plan; however, there is another important reason.
The trust terms can be used to ensure that your burial and funeral are carried out according to your wishes. For example, you can state within the trust terms where you want to be buried or that you want to be cremated. You can provide extremely detailed instructions, including everything from the music you want played to the color and type of flowers and who is allowed to speak at the service. The best part is that your Trustee will be legally obligated to abide by those terms, providing importance and valuable assurance that your wishes will be honored.
Would You Like to Discuss Funeral Planning?
For more information, please join us for an upcoming FREE seminar. If you would like to discuss the inclusion of a funeral planning component into your estate plan, contact our estate planning attorneys in our North Andover, Woburn, and Beverly offices at (978) 969-0331. Our Salem and Nashua, New Hampshire office can be reached at (603) 894-4141.
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