July 14, 2008
Many people refuse to contemplate their own death, while others take great comfort in planning every funeral detail ahead of time. No matter where you fall in this spectrum, there are several factors you should consider regarding cost, impact on your loved ones and ensuring that your wishes are carried out.
Know your rights. The Federal Trade Commission (FTC) enforces a federal law commonly known as the "Funeral Rule," which regulates how funeral providers must deal with consumers. Among its provisions:
The FTC's website includes much helpful information including tips for planning a funeral, a comprehensive publication called "Funerals: A Consumer Guide," and links to organizations that can help with funeral arrangements (see various tabs at www.ftc.gov/funerals).
Gauge costs. For many people, funeral and burial expenses can easily reach $10,000 or more, once you factor in a burial plot, funeral services, viewing and visitation schedules, flowers, obituary notices, limousines, etc. Caskets alone often cost thousands of dollars – although many third–party and online retailers now carry them.
Some people set aside money ahead of time to cover costs. One option is to open a payable–on–death bank account naming the person handling your death arrangements as beneficiary, so the money will be available immediately without going through probate. Ask your bank for details.
Make your wishes known. Spell out in your will any burial and ceremony preferences, as well as your stance on issues such as cremation or donating your body to science. That way, you'll spare your family from having to make difficult decisions at an emotionally stressful time – including possibly being pressured into spending more than they can reasonably afford.
Preplanning vs. prepaying. If you're comfortable doing so, preplanning your own funeral arrangements can help ease your family's burden. By researching and visiting a few providers, you'll have a better idea of what's available and what things cost.
Some people opt to prepay their arrangements, but the FTC advises caution and recommends you ask potential funeral home candidates:
As always, it's a good idea to check with a financial advisor before committing to any contract.
The death of a loved one is always upsetting, but you may be able to ease your family's burden by planning ahead.
Recent Practical Money Matters