More and more Americans are pre-planning their funeral, and you should consider it, too. You can make sure you have it your way — by purchasing your own gravesite, contracting with a funeral home, and purchasing a headstone or marker. You can tend to as many or as few details as you like, right down to who speaks at your service and what music is played. (Ronald Reagan famously left a 300-page plan for his state funeral.)
Pre-needs planning offers four benefits. First, you ensure that your funeral is exactly what you want. Second, you spare your family the challenge of paying for the event. Third, you allow your surviving spouse and children to avoid the trauma of having to make big decisions during an emotionally difficult time. And, fourth, you eliminate the risk that family members might fight over the arrangements or be confused or abused by funeral home or cemetery sales pitches.
When engaging in pre-needs planning, shop around like you would for any other major purchase, taking the time to compare prices and features. You can prearrange your funeral by contracting with a local funeral home, or you can turn to a memorial society — a nonprofit organization that helps people plan cost-effective funerals. Before signing a pre-needs contract, consider these issues:
Decide on your needs and preferences. You can limit your effort to buying the cemetery plot or casket, or you can pay for services and other costs, too.
Assess the financial soundness of your vendors. It could be years, even decades, before you use the products and services you're buying. Will the manufacturer still be in business? Will the product still be offered and, if not, who will choose its replacement?
Ask questions about your money. What happens to the money you pay to the funeral arranger? Who gets the interest on that money? How are you protected if the firm goes out of business before you die? Can you cancel and get a refund?
Consider what happens if you move. Where will you die? Before you choose a cemetery and funeral home, think about the possibility that you may move across the country in 10 years to be closer to children and grandchildren. Will you want your body to be shipped back to your hometown? Who will pay for that expense? Can your prepaid funeral be transferred to another location if you move?
Inform your family. It's not enough to have a funeral contract stashed away in a drawer or safe deposit box. You need to tell your kids about your plans. If you don't, they might pay for your funeral all over again. Although it might be difficult to talk about this with your adult children, it's the responsible and mature action. And although they might dislike the conversation, deep down they'll be relieved.
Plan for future costs. If you don't fully prepay for everything, you'll want to make sure your family has the money to pay the inevitable bills. That means buying a life insurance policy or maintaining funds in a bank account — but make sure the monies will be available quickly. Without proper financial planning, the pre-needs planning can prove inadequate, as it can take weeks, months, or even years before bank assets or insurance proceeds become available.
Be aware that the pre-needs industry has experienced its share of fraud and abuse. The industry is a natural target for crooks, because its customers tend to be older and more susceptible to this type of crime. Crooks gamble that the victims will forget about their purchase, move to another part of the country, or might neglect to tell their families about their purchase. And after absconding with the money, the crooks hope that the only person who will be upset is the deceased! From the crooks' perspective, it's a perfect scam when the only one who might complain is dead.