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Home » Estate Planning » Should I Purchase a Pre-Paid Funeral Contract?

Should I Purchase a Pre-Paid Funeral Contract?

February 21, 2019Estate Planning

North Andover estate planning attorneys

Although it isn’t something you may want to spend much time thinking about, planning ahead for your own funeral and burial within your estate plan is something you may wish to do for several reasons. One way t do that is by entering into a pre-paid funeral contract with a local funeral home. As the North Andover estate planning attorneys at DeBruyckere Law Offices explain, a pre-paid funeral contract may not be your best option for planning your own funeral and burial.

Why Should You Include Funeral and Burial Planning in Your Estate Plan?

As much as you might prefer to avoid the topic, failing to plan ahead for your own funeral and burial could cost your loved ones in more than one way after you are gone. First, your loved ones may end up paying more than they should for your funeral services. As of 2018, the average cost of a basic funeral is over $10,000 – and that price only includes the basics. If you failed to plan ahead, your loved ones may end up paying considerably more than they should because of their fragile emotional state. It is all too easy for funeral home employees to talk a grieving spouse, child, or loved one into more than what they really need. Moreover, in the absence of concrete guidance from you, the chance of confusion or conflict increases dramatically.  You may have expressed your wishes with regard to funeral and burial plans to a loved one; however, other family members may feel they know what you would want. Ultimately, loved ones could end up in a contentious battle over the details of your funeral that could cause a rift in the family for many years to come. Finally, surviving loved ones will be forced to come up with the funds necessary to pay for your funeral and burial services within days of your death. For some families, this adds yet another layer of stress to an already stressful and emotional time.

Is Entering into a Pre-Paid Funeral Contract the Best Choice?

By planning ahead and pre-planning your own funeral and burial you will not only ensure that your own wishes are honored but you will also limit the stress and anxiety your loved ones would be under if they were forced to handle all the details. The question remains, however, whether entering into a pre-paid funeral contract if the best way to plan ahead. Factors you may wish to consider before committing to a pre-paid funeral contract include:

  • You probably won’t be able to make changes. Pre-paid funeral contracts lock everything in as of the date you execute the contract. Pre-paying at today’s prices is the incentive to enter into these contracts; however, you are also locking in all the details of your funeral. If you decide you want something different, such as to be cremated instead of buried, or to be buried next to a new spouse because you remarried, you probably cannot modify the terms of the contract.
  • You might move. You may plan to remain where you are, but you simply never know. A late in life love and remarriage, grandchildren, or even health issues could all cause you to move to another city or state, making your funeral plan worthless.
  • The business could end up in bankruptcy or even go out of business. If either occurs, you are probably out of luck. If you enter into a contract when you are 60 and live to be 85, a lot can happen to that business in the intervening 25 years.
  • There is no realistic recourse for disputes. Unlike most contract disputes, litigating a dispute over a pre-paid funeral contract isn’t a viable option because there is a very small window of opportunity for the contract to be fulfilled – and the family and loved ones need it to work flawlessly or it is really of little use.

Is an ILIT a Better Option?

An Irrevocable Life Insurance Trust (ILIT) is a special type of trust that is funded by the proceeds of a life insurance policy. As the Settlor, you create the trust and appoint a Trustee to administer the trust. This should be the person you wish to be in charge of your funeral and burial after you are gone. You then purchase, or transfer in, a life insurance policy, the proceeds of which pay out immediately into the trust upon your death. Those proceeds then fund your funeral service. You can also use the trust terms to ensure that your burial and funeral are carried out according to your wishes.

Contact North Andover Estate Planning Attorneys

For more information, please join us for an upcoming FREE seminar. If you have additional questions about how best to plan your funeral and burial, contact the North Andover estate planning attorneys at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.

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Daniel DeBruyckere
Daniel DeBruyckere
Attorney Daniel A. DeBruyckere has been practicing law in New Hampshire and Massachusetts since 1998, and has helped hundreds of clients with their estate planning and elder care issues. He is very well respected in the area of estate planning, probate, trust administration, elder law issues, and business planning.
Daniel DeBruyckere
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