What you should know about paying for a funeral

We don’t like to think about our own demise, but the reality is that we all die. As you look into estate planning issues so that your legacy is preserved (and as much of your money as possible goes where you want it to), don’t forget to consider the cost of a funeral.

Paying for a funeral can get expensive. According to PBS, the typical funeral in the United States cost between $8,000 and $10,000 in 2013. There are a number of costs associated with a “traditional” funeral, and if you are worried about how those costs could impact your heirs, it’s important to plan ahead. Here are some things to think about as you plan your funeral:

Save Money on the Trappings

One of the easiest ways to save money is to skip the casket from the funeral home. PBS points out that the average cost of a casket is $2,300, with a casket at the funeral home going for right around $1,295. There are even some high-end caskets that cost as much as $10,000 or more.

However, Costco now sells caskets for as little as $900, and it’s possible to find caskets online for about $600. When you understand that the wholesale cost for caskets is about $325, it makes sense that you can find discounts if you comparison-shop — much as you would for any other product.

It’s also possible to save money on some of the other trappings associated with a funeral, if you are willing to go a non-traditional route. Some ways to save on funeral costs include:

  • Consider holding the funeral at a local church building instead of a funeral home. Fees might be lower, and having someone other than a funeral director officiate might save you money.
  • Rather than having a “traditional” funeral, consider a graveside memorial service.
  • Shop around for a headstone. As with caskets, there are a number of ways to use the Internet to find headstones that cost less than the average price of $2,000.

With some shopping around, it’s possible to reduce the cost associated with a funeral. However, it also means more legwork and coordination. Working through a funeral home, and having everything handled by a funeral director is more expensive, but it also takes more pressure off everyone involved and can make for a smoother, less stressful experience.

The Growing Popularity of Cremation

One way to reduce the cost of a funeral is to choose cremation instead. A direct cremation costs about one-third to one-half of a burial. As a result, it’s little surprise that the number of Americans choosing cremation is on the rise, according to PBS. There are different options for the ashes, including interring them (for about $1,000), or scattering them (check regulations related to scattering human remains). It’s even possible to buy an urn (for as little as $100) and store them at home.

Others allow their organs to be harvested ahead of a cremation, or donate their bodies for use in medical school or for other scientific purposes. How you decide to handle your death is up to you, but it’s important that you update your estate planning documents (especially your will) to make your wishes known, and communicate your preferences to your loved ones.

Pre-Paying for Your Funeral, Life Insurance and Estate Planning

It’s also possible to pre-pay for your funeral. The FTC points out that you have the right to buy only the arrangement you want, as well as an itemized list of the services you prefer. Some funeral services allow you to pay for the services ahead of time, so that your family doesn’t need to worry about the cost. If this is the case, make sure you understand the contract, and keep it in a safe place where your family can access it when you pass.

Among the purposes of life insurance is providing the ability to pay for the funeral. If you have the right coverage, there is a good chance that it can be used to defray the cost of your funeral. You might not need to pre-pay if your life insurance coverage is sufficient. In some cases, it can make sense to purchase a small, inexpensive policy, just to cover the funeral costs. Others buy insurance coverage designed to cover the cost of the funeral, plus cover the amount their heirs will pay in taxes (life insurance payouts are tax-free).

No matter how you decide to manage your situation, it’s a good idea to sit down with a financial advisor who can help you with estate planning issues as you decide how to plan your future, your legacy, and how you hope to to be laid to rest.

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