Should I Pay In Advance?
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Preneed. Prepay. Prefund.
Whatever it's called, the question is: Should you pay in advance for funeral and/or cemetery services before your death occurs. Prepaying for funeral arrangements might seem like a responsible and practical thing to do for yourself and your family, however it's our opinion that prepaying for funeral services leaves a person susceptible to deceptive sales practices and puts them at risk of becoming victims of fraud. There are a number of legal controls on how the funeral industry can handle and invest funds earmarked for future services, but there are also many reported abuses, including mismanaged and stolen funds. A great many other abuses go unreported by family members too embarrassed or too grief-stricken to complain. |
"Death and the Maiden," 1872, Pierre Cecile Puvis de Chavannes. National Gallery (London)
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Consumers face additional pitfalls. Money paid now may not cover inflated costs of the future, meaning that survivors will be left to cover the substantially inflated costs. If you've made funeral plans that involve a burial, and you die some distance away from home, you're survivors will pay an additional four to five thousand dollars just to get your body from the funeral home in, say Arizona, to the one back here in Minnesota.
What to do?
Plan ahead. Preplanning for your funeral is always a good idea and most marketing strategies will use the concept of preplanning to get consumers interested in their services with the hope of ultimately convincing them to prepay for their funeral. It is never necessary to involve a funeral home in the preplanning phase.
Have the talk. Death planning is a final gift to loved ones, a way of lifting from others the burden of your own death. Talk with the person or persons you want to carry out your plans, and with your closest family members. It's especially important to have a conversation with close family members who may disagree with your plans, say, for religious reasons, or because the family's always done it this way, and what would the neighbors think? See the Plan Ahead pages on this website.
Shop around. Go to Parting.com, a website that compares prices for almost every U.S. funeral home. Enter your zip code, and answer three questions to determine what type of arrangements you're looking for (such as cremation, no service). You'll be taken to a page with the names and prices of funeral homes in your area. It's not a fool proof system, and sometimes the prices are wrong, so it's best to call the funeral home to confirm.
FCA of MN can recommend funeral homes that are known for reasonable prices and good service. Give us a call or send us an email.
Keep the money in the family. If you want to pay your way to your final rest, go to your bank or credit union and deposit the funeral money in an account. It can be a simple savings account or a CD, nothing complex required. Have the bank make it Payable on Death (POD) to any-one you wish. There. Now you've set aside the money without tying it up in a prepaid contract.
There is one situation where it may be a good idea to prepay. If you’re about to go on Medicaid to pay for your long-term or nursing care, you have to “spend down” your own assets. This means you have to get rid of most of your own money before the government will kick in for your care. One way to do this is to prepay for your funeral. But only do so when Medicaid tells you it’s time. Don’t be taken in by a funeral home that says, “You should prepay me just in case you go on Medicaid.” It’s no good to foreclose your options when you don’t need to.
What to do?
Plan ahead. Preplanning for your funeral is always a good idea and most marketing strategies will use the concept of preplanning to get consumers interested in their services with the hope of ultimately convincing them to prepay for their funeral. It is never necessary to involve a funeral home in the preplanning phase.
Have the talk. Death planning is a final gift to loved ones, a way of lifting from others the burden of your own death. Talk with the person or persons you want to carry out your plans, and with your closest family members. It's especially important to have a conversation with close family members who may disagree with your plans, say, for religious reasons, or because the family's always done it this way, and what would the neighbors think? See the Plan Ahead pages on this website.
Shop around. Go to Parting.com, a website that compares prices for almost every U.S. funeral home. Enter your zip code, and answer three questions to determine what type of arrangements you're looking for (such as cremation, no service). You'll be taken to a page with the names and prices of funeral homes in your area. It's not a fool proof system, and sometimes the prices are wrong, so it's best to call the funeral home to confirm.
FCA of MN can recommend funeral homes that are known for reasonable prices and good service. Give us a call or send us an email.
Keep the money in the family. If you want to pay your way to your final rest, go to your bank or credit union and deposit the funeral money in an account. It can be a simple savings account or a CD, nothing complex required. Have the bank make it Payable on Death (POD) to any-one you wish. There. Now you've set aside the money without tying it up in a prepaid contract.
There is one situation where it may be a good idea to prepay. If you’re about to go on Medicaid to pay for your long-term or nursing care, you have to “spend down” your own assets. This means you have to get rid of most of your own money before the government will kick in for your care. One way to do this is to prepay for your funeral. But only do so when Medicaid tells you it’s time. Don’t be taken in by a funeral home that says, “You should prepay me just in case you go on Medicaid.” It’s no good to foreclose your options when you don’t need to.
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What About Locking in the Cost of a Cremation?
If you're planning on cremation, and your plans include having your ashes buried in a cemetery plot or placed in a mausoleum or columbarium (translation: in an above ground niche), and you're absolutely certain that's where you want your ashes to rest, it might make sense to buy in advance. Even if you die away from home, your body can be cremated where you die, and the ashes shipped home at no great expense. You'll want to make sure opening and closing costs, and the cost of a marker or niche inscription, are included in your contract.
You may even decide to purchase (prefund) a cremation in advance to lock in a price. Your contract should clearly state the locked-in price. In Minnesota, a person may choose to transfer their prefunded cremation from one funeral home to another funeral home prior to or after the death occurs. Administrative fees cannot be charged when a change in funeral providers is made. |
What does the locked in price include? You may need to set aside funds to cover the cost of such things (should your plans call for them) as obituaries, and fees for a funeral service or memorial service that takes place in a funeral home, a place of worship, or other venue.
Additional costs associated with a service may include: clergy honorarium, service programs, food or refreshments following the service, and musicians.
Additional costs associated with a service may include: clergy honorarium, service programs, food or refreshments following the service, and musicians.
The table below is taken from Pre-paying for Your Funeral In Minnesota, prepared by Funeral Ethics Organization.
Prepared by: Funeral Ethics Organization
http://www.funeralethics.org