The Trouble with Prepaid Funerals

The-Trouble-With-Prepaid-Funerals-IMAGEIn the interest of making things easy for their future beneficiaries, many elderly plan for death by orchestrating a prepaid funeral. It seems, from the outside, a great idea: “when I finally go, my family won’t have to worry about any costs to lay me to rest—I can plan it on my own terms, with my own money. All they’ll have to handle is the grieving process.” According to AARP Magazine, it was this line of thinking is what led Evie Robinson of McComb, Mississippi to buy a “prepaid full-burial policy from the local Harman Funeral Home” in 1973, at the age of 49. Unfortunately, Evie forgot to make her family aware of the purchase, and when she died, 35 years later in 2008, her family, “unaware it existed… paid Hartman $8,128 to lay their mother to rest. They later found the policy among her possessions.” Despite the family’s efforts to recover the money, it wasn’t possible to refund the funeral costs.

Forgetting that the policy exists isn’t the only thing to be wary of when considering a prepaid funeral program. Josh Slocum, executive director of the Funeral Consumers Alliance, told AARP that, “some prepaid plans can actually cost you more in payments over time than the amount they’ll pay out on your funeral.” The best way to go around this, according to Slocum and reported by AARP is to “set up a ‘payable upon death’ bank account.” This type of account is only accessible when it’s necessary, and can accrue interest over time to help your family with unforeseen funeral costs and other types of financial support.

Most importantly, of course, is to talk with your family regarding your funeral and burial wishes. Keeping those lines of communication open is the easiest and simplest way to avoid any confusion or hard feelings when you’re not around to soothe them. “Avoiding the topic won’t stave off death,” Slocum reminds AARP readers, “but it will make the funeral more difficult, and likely more expensive, for survivors.”

The best first step to open those lines of communication is to seek the counsel of a qualified estate-planning attorney. Don’t go through it alone. Contact a qualified Chicago-area estate-planning lawyer today.