Author Topic: Prepaying burial expenses  (Read 2802 times)

MrsPete

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Prepaying burial expenses
« on: September 29, 2014, 06:21:33 AM »
My husband and I recently had "real" wills written -- power of attorney and medical power of attorney too. 

Now we're talking about whether it'd be wise to investigate prepayment of burial expenses.  Or cremation -- we don't have strong opinions on either one right now, and I'm not interested in debating which is better -- we're just trying to decide whether it'd be wise to make those decisions NOW and put down money NOW.  Our thoughts:

- If we do it now while we're still (reasonably) young and healthy, it isn't emotionally traumatic.  I mean, it's not like I think I'd be using this service next year.  In all likelihood, I have another 50-60 years left. 
- If we do it now, it'll be easy for the remaining spouse /the children when the time comes.  The decisions will already be made, and they won't feel pushed to decide (and spend) at what'll already be a difficult time.
- It's pretty certain that we'd pay less today than we would in the future . . . though the opposite is that we'd have less in investments.
- We are unlikely to leave this area.
- The kicker, of course, is . . . what if the funeral home goes out of business?  The one my family has always used has been in business for 100+ years, so I don't think this is likely, but it is possible. 

Thoughts?




Pigeon

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Re: Prepaying burial expenses
« Reply #1 on: September 29, 2014, 07:01:00 AM »
I don't think it's a bad idea, although to confess, we haven't done it and won't do it until we have the kids' college educations paid for.  But it's a good way to help ensure that you get the kind of burial you want to have.

My FIL in died a year ago.  He  had always said that he wanted to be put in a box and buried with no hoopla, no ceremony (he was not religious), and in a frugal way. He was a pretty frugal guy, but traditional enough that he didn't want to be cremated or donate his body.

Instead, he was embalmed and tarted up, put on display at a wake, had a fancy coffin, a church service, a headstone, etc. Dh pays MIL's bills for her and the whole thing was many, many thousands of dollars.  I'm sure he was rolling in the grave.

Why?  My BIL is a bully, he's religious and has bought into the traditions of his wife's family, and he put all sorts of pressure on my MIL at a time when she was very vulnerable.  Because of the sadness of the situation and MIL's stress, nobody stood up to him.

I've heard too many people say that "funerals are for the living" as a justification for disrespecting the wishes of the deceased.

Timmmy

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Re: Prepaying burial expenses
« Reply #2 on: September 29, 2014, 07:14:32 AM »
You should certainly decide what you want done.  Even write it down so there is no confusion for the people dealing with the decisions after you pass. 

You should NOT pre-pay them.  You will have plenty of money to pay all those expenses.  Cut expenses, save and invest.

Heart of Tin

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Re: Prepaying burial expenses
« Reply #3 on: September 29, 2014, 09:28:46 AM »
Don't do it. If you want to make your own funeral arrangements, then absolutely go to the funeral home you trust, make a prearrangement with the funeral director, and make sure to let someone other than your spouse know where the prearrangement was made. Don't prepay the cost. Surely you have either enough money or enough life insurance to cover a funeral.

If you do prepay, read all of the fine print and look up your state laws on prepaid funerals. Certain states have more stringent laws on this sort of thing.

First, find out what happens if the business you prepay is sold or goes out of business. Can the money be returned to you or transfered to a different funeral home? Will there be interest due at the time of refund or transfer?

How will the money be held? Will it be invested and earn interest? Will you owe taxes on the interest?

Find out exactly what you are paying for and what you aren't paying for. Many pre-paid funerals don't include such items as crematory, cemetery, and death certificate fees. If your goal is to eliminate all future burial costs, then you will need to make sure that the total cost of burial is included. Furthermore, what happens if the items or services that you prepaid for are no longer available at the time of burial? Will the funeral home replace them with the closest available match at no extra cost, or will your family be expected to choose and pay for a replacement?

What happens if your prepayment exceeds the cost of your funeral (this is especially relavent if your money is kept in an interest bearing account)? Is it refunded to your estate, does it go to your local or state government, or does the funeral home get it?

FiguringItOut

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Re: Prepaying burial expenses
« Reply #4 on: September 29, 2014, 09:40:29 AM »
My mother in law was diagnosed with terminal cancer and passed shortly after I married her son.  After she was diagnosed, she and my father in law bought burial spaces at the cemetery of their choice.  This was 12 years ago.  My father in law passed 4 years ago.  It was a huge help that he had a space at the cemetery.  All we had to do was call the cemetery and let them know.  The burial services however were another $7,000 that we had to pay.  My husband's uncle paid half of that, but we still had to pay $3.5K for simple no frills service at the grave side. 

From my experience, having a burial site prepaid was a huge help to us both in financial terms and in the decision making terms.  If not prepaying the services, then I would suggest to at least get the insurance that would cover these services.   

This is was I am planning to do when the time comes later in life (I am too young right now to worry about this).

MikeBear

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Re: Prepaying burial expenses
« Reply #5 on: September 29, 2014, 06:21:45 PM »
It's a bad idea. We recently here had TWO different funeral homes embezzle the monies for prepaid funerals. Turned out it had been going on for years, and the people never got their money back, or their funerals as needed.

Instead, setup a special bank account or fund for yourself, and stock it with enough money for the purpose when needed.

I'll bet Vanguard would make a good place to do it...

MBot

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Re: Prepaying burial expenses
« Reply #6 on: September 29, 2014, 10:31:21 PM »
Pre-plan, yes.

Pre-pay, absolutely not. 50 or 60 years of return on that money will be much better.

kite

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Re: Prepaying burial expenses
« Reply #7 on: September 30, 2014, 06:22:53 AM »
Pre-plan, yes.

Pre-pay, absolutely not. 50 or 60 years of return on that money will be much better.

This.
Plus,  your needs and wants may very well change over 50 years.   
Until my best friend went to med school and gave me a tour of her Gross Anatomy lab, I'd never considered donating my carcass to a school,  but now it's absolutely a possibility. 
Have your wishes known/documented and the funds to carry them out accessible.