The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: solon on March 06, 2020, 04:28:39 PM
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I have an older friend who lost her husband in December. She had him cremated at a cost of $1,600. But now she tells me the price has gone up twice since then, and the current price is $2,200. So she locked it in by signing a contract to pay $2,200 plus interest over the next 10 years.
Is this a good idea?
She doesn't want to "trouble" anyone after she's gone. She has no descendants, so nobody will be troubled. She's not going to have much of an estate, if any. She has just enough Social Security and PERA (CO retirement plan) to pay her monthly expenses right now, but not much extra.
What if she dies penniless? Who would pay the cremation/burial expenses?
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The state would pay for what would likely be cremation. There'd be no burial or plot paid for. Not sure what would become of the cremated remains. They might do some type of communal disposal of the "ashes".
We just had my father cremated in September. The bare bones process of actually cremating the body was $1,100. We'd called around to numerous mortuaries and they were all about $1,000. The difference compared to the amount you mentioned could just be locality difference, or perhaps includes additional services like a memorial service at the mortuary. I'd be kind of surprised to see the cost go up unreasonably in the future because there's not much to the actual process of burning a body. No embalming is done with a cremation.
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Caveat : my parents both had prepaid cremation plans, and then they both managed to die in different states than where they had the plans. There was a lot of paperwork to get partially reimbursed.
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Another benefit is that prepaid cremation is not counted as part of someone's estate in order for them to qualify for Medicaid.
In the case of my parent who needed nursing home care, but who needed to qualify for Medicaid to have it paid for, this was a recommended way to reduce the amount of cash she had on hand. (as you probably know the asset limits for Medicaid are quite low).