A pre-paid funeral or burial arrangement is a plan that you pay for during your lifetime. Typically sold by funeral homes, these arrangements allow you to specify the types of funeral or burial services you are interested in. The amount paid usually goes in a trust fund with payout triggered upon death, or the funeral home may purchase an insurance policy with the funeral home named as the beneficiary.
Having prior arrangements in place can help avoid family conflict by taking some of the decision-making away from the family during a time when emotions are running high. Many people overspend on a funeral/burial because they think of it as a reflection of their feelings of the deceased. With no planning in place, your loved ones may decide to use their own judgment and values in deciding end-of-life decisions, and these decisions may be completely different than what you would have wanted. I have experienced a situation where an adult child substituted her own values in place of her deceased mother, and had her mother pre-paid for her services, there would have been a different outcome. There are differences in opinion as to whether it makes financial sense to pay for services ahead of time, but most agree that some planning should take place. Arizona laws provide that anyone who “personally inquiries about prearranged funeral agreements” can request a standardized written or printed price list for retention so you know what you are paying for. Prices can vary depending on the funeral home and what is being purchased. The general cost of a funeral is approximately $10,000 for a basic service. If you at least decide on a specific funeral home, whether you would like to be buried, cremated, or another option, whether you want a service, grave marker, etc., your loved ones will not have the burden of guessing what you would have wanted, making decisions, and paying for your end-of-life arrangements. Communication with your loved ones is essential to ensure that your wishes are followed and to reduce unnecessary stress. Most people who put thought into their end-of-life arrangements, did research to put their plan in place, and communicated with their loved ones about the plan feel liberated after doing so.
It is important to note, when qualifying for Medicaid/ALTCS, paying for these arrangements when you have funds to “spend down” may be recommended. To consider your specific situation and to determine how to best put your plan for end-of-life decision-making in place, please call our office to schedule an appointment with one of our experienced elder law attorneys.
-Letty Segovia, Esq.