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Final Expenses - It's Best To Plan Ahead
April 15, 2008, 1:55 pm
Preparing for the end can make life easier for those you leave behind.
Death may be a topic nobody wants to discuss, but if you think about it, final arrangements make up the only purchase that
everybody has to deal with. Now whether you decide to leave it up to your relatives is a personal decision everyone has to make for himself or herself. However, by planning ahead, you can save your loved ones a lot of money and a tremendous amount of grief.
Naturally, there are all kinds of details about your final arrangements that have very little to do with money. Your religious beliefs, your values and your family’s wishes should all be considered. By making a few decisions in advance, and including them in your will, you’ll be making sure that your wishes are met. You also may be able to sidestep any bickering between family members who may not see eye to eye.
In addition to these issues, which are primarily based on emotion and values, you can also address some financial issues in advance. There are several ways to handle the financial aspect of your final arrangements.
Some people simply feel that they have enough money in savings and investments that finding several thousand dollars for a funeral when the time comes won’t be a problem. The biggest advantage to this approach is flexibility. By not making financial decisions up front, you don’t lock any money up in final expenses. Also, your family can use any funeral home in any part of the country they want. It’s a great position to be in. However, there are some drawbacks, the most significant of which is the amount of time it can take for your family to get their hands on the money you leave them. If you prefer not to pre-pay for your funeral, at least make sure your will is written so that relatives will have quick access to enough money that your funeral won’t be a burden.
Another common way to handle final arrangements is to pay for them through a funeral home. In this type of arrangement, you buy your burial plot and pay for the funeral in advance. This works best when you are absolutely sure of where you want to be buried and which funeral home you want to use. The obvious drawback is that you may be limited in what you can do if you change your mind. And many people move to a warmer climate when they retire. If you decide to pre-pay through a funeral home, make sure there are also safeguards in place should the company go out of business.
Another way to handle final expenses is to take out a whole life insurance policy for several thousand dollars. With a dedicated life policy, you don’t have to decide on a funeral home in advance. Also, your family will have all the money they need for final arrangements regardless of what you’ve paid, and they won’t have to make up the difference. And most funeral homes will work with your family if they allow the funeral director to call the insurance company to verify the benefits. The disadvantage of using a life policy is that whole life premiums can be expensive, and if you decide to drop the policy after a few years, you’ll likely lose all or most of what you’ve put into the premiums.
About Springboard Nonprofit Consumer Credit Management
Springboard is a nonprofit credit education and financial counseling organization founded in 1974. The agency offers personal financial education and assistance with money, credit and debt management through confidential counseling. Springboard is accredited by the Council on Accreditation, signifying high standards for agency governance, fiscal integrity, counselor certification and service delivery policies. The agency provides pre-bankruptcy counseling and debtor education as mandated by the bankruptcy reform law. Springboard is a HUD approved housing counseling agency and a member of the National Foundation for Credit Counseling, a national organization of nonprofit credit counseling agencies. The agency has several locations in California and offers face-to-face and nationwide phone counseling services. For more information on Springboard, call 1-800 WISE PLAN (1-800-947-3752) ext. 7750 or visit their web site at www.credit.org.
