Practical Discussions About Funerals
Compliments of Anderson, Dorn & Rader
With all of the uncertainty in life, the one common denominator we all share and none escape is death. We go through life with a mindset of “when” things happen: when we graduate college, when we start a family, when we take that vacation in the French Riviera; yet when it comes to planning for end of life and funerals, we tend to insert an “if” factor. It’s human nature: we fear the unknown and our mortality.
For many, preplanning is a solution which eliminates several potential problems, including the need for discussing final wishes since the details have already been arranged. Also, preplanning eliminates worries about costs and potential family conflicts at a time when the family is grieving. This time should be about dignity, control and privacy.
From a more practical perspective, by pre-purchasing a funeral, it can make Medicaid qualification easier since it’s not factored into the spend down rule or the five-year look back period. Funds used to cover the costs aren’t considered available cash resources. Instead, those costs might include the funeral or memorial service, caskets or urns, cemetery markers and any other cemetery expenses.
Note that Medicaid requires prepaid funeral arrangements to be irrevocable. This simply means that family members may not opt for less expensive arrangements and then pocket the difference. If overpayments occur, they are returned to the state, not the family.
Another option includes assigning a life insurance policy to the funeral home that will cover the costs. If the policy is not enough to cover the arrangements, family members will have to cover the difference. Again, if you receive Medicaid, any overpayments are returned to the state, not your family. Finally, you must assign ownership of the policy to the funeral home. Listing it as the beneficiary is not enough.
By making the decisions and arrangements ahead of time, it can also present the opportunity to have an honest end-of-life discussion with family members. While it’s never a pleasant conversation, it’s necessary and can pave the way for more open discussions later.
You might wish to download a consumer’s guide for funerals. The U.S. Federal Trade Commission offers one that’s helpful.
Estate planning is about taking control in order to ensure your assets are distributed according to your wishes after you are gone. The preplanning of funeral services achieves many of these objectives, including making it easier to have sometimes difficult discussions with your loved ones. An experienced estate planning attorney can help ensure your funeral plans are carried out as you intended.