I often write about the larger issues of estate planning, highlighting how to avoid unnecessary estate taxes and legal complications surrounding inheritance of the estate. But so often people forget about the small details, like planning for the funeral or handling final expenses.
I say, “small details,” but such things are actually not a small issue. For example, if you are not married but instead have a life partner, same-sex or otherwise, when you pass away, your body is considered property, so it goes to your closest relative. In this case, I’ve seen many people get excluded from planning their life partner’s funeral because of this. All it takes to fix it is to prepare a simple legal document in advance covering the disposition of remains, spelling out what you want done and who you want to do it.
I was reminded of the importance of these final details when I read a piece by my friend, Joe Reardon, in my local newspaper, highlighting the reasons why people should pre-plan their funeral arrangements. Joe is a dear family friend and a funeral director. I talk about taxes. Joe talks about death. It’s a powerful combination.
As Joe points out, planning funeral and cemetery services in advance can be an uncomfortable topic, but there are both emotional and financial reasons for pre-arranging funerals.
Pre-arranging provides you the opportunity to compare services, facilities and prices when you are thinking clearly and have the time to consider your choices without pressure. It also alleviates concerns about grieving loved ones who will not have to worry about what you or a loved one would have wanted.
Pre-arranging can alleviate financial concerns as well.
When my mother became very sick, she told us what she wanted, so my brothers and I went with my father to make the arrangements. At the same time, my father prepaid for his funeral. And when first my mother and then my father passed, it was comforting to have everything set. We didn’t have to worry about it. Joe came and took care of everything.
When someone passes away, no matter how old they are, it’s difficult for the family to make decisions about how to handle the funeral. But if you have your plans outlined, and you have the funds to pay for it (either through insurance or by pre-paying the funeral expenses), it takes a lot of the stress off the family.
When you prepay you get more control and have a contractual relationship with the funeral home that they will follow to the letter. You might have a little wiggle room about songs or having a video play, but, generally speaking, it’s a contract that will be adhered to. Alternatively, if you put an agency for disposition of remains in place that spells out your wishes, your financial professional has the responsibility to follow that guidance. It’s not as ironclad as a contract with a funeral home, but it’s better than leaving it up to chance if you’re passionate about a certain service or lack of service, cremation versus burial, or whatever you particularly desire.
To the extent you make your wishes known, the better.
It’s also important to plan for the funeral expenses, because it can be expensive. Your family shouldn’t rely on GoFundMe to cover the costs. I knew someone whose husband died unexpectedly. The funeral cost $12,000, which two of the husband’s uncles covered. But the wife completely stressed out about paying them back. While there was life insurance, unfortunately the beneficiary of the policy was the estate so she had to go through probate. This meant that it took several months before she got the life insurance benefits, causing her needless stress and difficulty. The little things really do matter.
So, think big about your estate plan, but don’t forget the little things. You need to tie it all together. Make your wishes known, in writing if need be. Get life insurance to cover those final expenses and provide protection for those you leave behind. You buy life insurance because you love someone, or you owe someone. When you die, you may have both.
This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your situation. The information in this material is not intended as tax or legal advice. Always consult your legal or tax professionals for specific information regarding your individual situation.