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Funeral planning should go with estate planning, P.2

Picking up from where we left off on our last post, it is important to set aside money for your funeral as part of your estate planning. One of the possibilities that many take advantage of is setting up a trust and funding it with money. Such trusts can be set up through funeral homes, and there are usually no limits to the amount of money that can be placed in these trusts. Readers should be aware that there may be problems if the money is placed in trust in order to help qualify for Medicaid.

The money can be used to pay not only for the funeral service, but rules vary from state to state in terms of what other items the money can be used for, such as flowers, ceremony plots, etc. Any unused money is usually given back to the deceased person’s family.

When determining which funeral home to go with, be aware that costs vary a good deal from one to another. In 2009, an average funeral cost around $6,500. Cemetery costs will add several thousand dollars or so to that amount. Funeral directors must provide potential customers with an itemized list of goods and services, and allow them to determine which ones they want to select. The method of disposition of the body will affect costs, as will visitation and funeral service. Some choose to forgo one or both of these.

What our readers might not realize is that planning ahead can actually save you money on funeral costs. And it can certainly save your family the stress of having to make quick decisions in the event no planning has been done. Letting family know your plan ahead of time also avoids surprises and heat-of-the-moment disagreements.

If nothing else, funeral planning is important because you want your family to feel comforted after your passing. Having a plan will make that more possible.

Source: Associated Press, “Funeral planning can save money, heartache,” Tom Murphy, December 7, 2011.