![]() ![]() In addition, most industry experts agree that there are too many risks to directly working with a funeral home for prepaid funeral services. Purchasing a prepaid funeral plan might seem like a smart idea, but other options offer additional financial benefits. You should make sure to understand the details of any refund policies before signing a contract for pre-paid funeral expenses. Final Sale: If you change your mind about the funeral services, you often don’t have the option to ask for a partial or full refund.If so, are there additional costs in doing so? ![]() Look into whether or not the funeral home transfers plans and payments to other funeral homes. If you decide to move out of state, it can burden your family to coordinate funeral services through a distant prepaid funeral provider. ![]() Location Convenience: Even though a nearby funeral home might be convenient right now, you never know where you will be living in your later years.In fact, there is a history of state and federal investigations because of the high number of problems that happen due to the funeral home misspending or embezzling the money. Keep in mind that there isn’t much regulatory oversight for prepaid funerals. Financial Risks: There’s always a possibility that the funeral home might go out of business.Consult with a tax professional to minimize your tax burden. Often, payments from the estate are tax-deductible. Tax Implications: Instead of paying out-of-pocket funeral costs, arrange for your estate to pay for the services after you are gone.Only the funeral home has access to the money, which eliminates options for your family to decide how to use those funds. Access to the Money: Keep in mind that a prepaid funeral means that your money is tied up.Potential drawbacks of prepaying for a funeral include: While the above benefits might seem appealing, there are also a few downsides to prepaid funerals. You might find our Free Downloadable Planning Checklist and Worksheet really helpful. Lock-in Pricing: funeral providers often incentivize families to invest in prepaid funeral services to lock in current pricing.Preplanning gives you control over the details of the funeral services. Service Selection: You can choose the specific services, events, and even cemetery plot.Peace of Mind: It feels good to know that your family won’t carry a big financial burden after you die.Some benefits you may enjoy from a prepaid funeral plan: Prepaying for a funeral is a way to take care of the future while you are in good health now. However, while there are benefits to this approach, it’s also important to consider the potential drawbacks. It might seem appealing to pay for the funeral arrangements before you die. Cremation may be significantly less expensive depending on your choices. including a burial costs approximately $9,000. As a benchmark, the average funeral in the U.S. Prepaid funeral plans vary in cost based on what your needs and preferences are. Or, you can arrange monthly or annual payments that you send to the funeral home directly. You have the option to make a lump sum payment if you already have the cash. Then, you can finalize the event details to spare your family from facing these difficult decisions in the future. If you have specific preferences for your services, it’s smart to talk to a funeral director while in good health. Most of the time, prepaying for a funeral means working with a funeral home to finalize the plan and pay for these services in advance. First, take a closer look at how this process works, then decide whether a prepaid funeral is a good fit for your estate plan. While there are benefits to funeral preplanning, it might not be the best choice financially. In addition, finalizing these decisions in a logical mindset reduces the risk of overspending when decisions are made in an emotional state after someone dies. As a result, many people find that they save money in the long run. Making your own funeral arrangements gives you the control to choose what type of service you want. ![]() But before you send a payment to a funeral home or funeral insurance company, make sure to do your research to understand how it works. Want to Prepay for Funeral Costs? Here's the Scoop.įuneral costs can add up, which is why it’s wise to have a plan in place to cover this significant future expense. ![]()
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