What is the Story on Pre-Paid Funerals?

Elder clients always ask, “Is it a good idea to pay for my funeral in advance?”, and “Won’t my life insurance take care of it?”

This is a nationwide concern, and a 1998 AARP survey showed about 32% of Americans over fifty have made some prepayment arrangements. Some of the reasons to buy a prepaid funeral are:

•- You can arrange the funeral you want.

•- The burden to make decisions is lifted from your loved ones at a time when they are grieving your death.

•- Certain contracts may lock in prices.

•- It provides an immediate and sure source of funding.

•- It gives you peace of mind.

In Connecticut, there are specific regulations on how a prepaid funeral can be set up.

Your local funeral home is most knowledgeable on how to do it, but here is what the law provides.

First, you can buy an irrevocable contract for up to $5,400 to go toward the funeral. This includes costs such as picking up the body, embalming, viewing, funeral services, permits, etc. Then, in addition, you can buy burial space items, which are items that go into the ground, such as a casket, a vault, or a headstone. In short, Connecticut allows you to fully prepay your funeral. Many funeral homes will use the funds to buy a fully paid up life insurance policy to insure that the funds will be available at the time of death. If you purchased a prepaid funeral contract in another state, Connecticut will honor it if it met the other state’s rules.

If a person does not have a prepaid funeral contract that meets Connecticut’s rules, and that person goes on Title 19 (Medicaid) before he dies, chances are there will be no funds to pay for the funeral and the children will then have that expense. So the answer to the question, “Is it a good idea to have a prepaid funeral?” is yes. And the answer to the second question, “Won’t my life insurance take care of it?” is maybe not. That is because if you have a life insurance policy with a cash value, and need nursing home care, you may have to cash it in to qualify for Title 19, if the cash value, plus your other assets, exceed $1,600.

Another aspect of Connecticut’s law is that you can do a predesignation of who you want to be in charge of your funeral, and specify what you want. This is important in those few cases where someone is concerned that a second marriage, or uncooperative family members, may dispute what kind of funeral to have.

And, one last thought. When you are considering where to be buried, make sure the plot is yours and that there is set aside space. Because I can tell you from personal experience that the space you were counting on in the “family” plot may have been taken years ago by the spouse of the uncle you never liked.