Shopping for Your Funeral Makes Financial Sense

You may not be able to take your money with you when you die, but you sure can spend a lot of it on your way out. With the average funeral costing about $5,000 today, the final exit is a big-ticket item.

It may seem crass or morbid to talk about money in the same breath as you consider your own mortality, but when you look at the numbers, it makes a lot of financial sense. Funeral shopping--the industry calls it “pre-need planning”--is hard all the way around. For starters, no one wants to look at their own mortality.

Second, unlike cars or computers, caskets are a mystery.

It’s easy to decide if you want to pay extra for, say, dual air bags in a car; it’s tough to determine whether you want an upgrade from a grave liner to a burial vault if you don’t know the difference.

“If you wait until the last moment--at need rather than pre-need--you will be too emotionally upset, distressed or stressed out to be sensible about what you are going to buy,” says John Blake, executive director of the Funeral and Memorial Societies of America.

“You won’t necessarily know the wishes of the person who has died, and you will feel a lot of pressure to show proper respect. That’s when people start burying their money rather than finding more productive uses for it.”

Advance funeral planning is not necessarily about doing it on the cheap, although it is possible to make low-cost arrangements.

Instead, it is about investigating the options and making decisions that ease the burden of survivors. In fact, in most states the survivors have the right to change advance funeral wishes, although funeral directors say that doesn’t happen often when choices have been laid out in writing.

Neither does planning a funeral mean paying for it upfront, although that may be an attractive option.

Developing a funeral plan starts with shopping both for specific items like caskets or desired services and for a funeral director to provide those goods. Typically, the latter choice is made on the basis of convenience--proximity to home or cemetery--or reputation within the community.

While almost any funeral director can provide a service to meet most price ranges, visiting more than one makes sense.

“You are choosing the person who is going to be serving your family when you aren’t there, and when your family needs the help and support,” says John Carmon of Carmon Funeral Home in Windsor, Conn., and a spokesman for the National Funeral Directors Assn.

“You want to see who offers the choices that you need--which may depend on the size of a funeral or on special religious or ethnic concerns--as well as who you will feel comfortable with providing the services.”

Many consumers choose to join a memorial society, a regional group that helps members comparison-shop and that may have arrangements to receive discounts at a few area funeral homes.

There are more than 130 memorial societies nationwide, most charging a one-time membership fee of $15 to $25. To find the one nearest you, contact the Funeral and Memorial Societies of America at P.O. Box 10, Hinesburg, VT 05461, or call (800) 765-0107. The group’s Web address is https://www.funerals.org/famsa

Once you decide where you want to do business, the shopping process is educational--what is needed and how much it costs.

Funeral directors are required, by law, to provide detailed price lists, but you must still find out what is necessary and decide which items you feel strongly about.

The choices aren’t pleasant, but they are necessary. For example, embalming is not always required. In many areas, grave liners are needed to support the grave and make sure the ground does not settle; a burial vault serves the same purpose--protecting the coffin better--at a higher cost.

Similarly, funeral costs go up if visitations and the burial are held on different days.

People who plan to have their remains cremated actually can rent a coffin for viewings, and do not have to burn an expensive one, since no casket is required for cremation.

Having analyzed costs and made decisions about where to spend the money for a funeral, write down your choices and give copies to select relatives or friends.

You might also include funeral plans in the instructions for a durable power of attorney.

With the arrangements chosen, the next consideration is whether to set aside funds or pay in advance. If you simply want to lay out instructions and set aside funds to pay for it, consider a Totten trust, a pay-on-death account that can be opened without a lawyer at most banks and many investment companies.

The trust is revocable, so it can be moved around, added to or closed completely. The income earned is taxable. If you prepay through a funeral director, where the money goes will depend on state requirements.

Typically, the money is placed in a trust to earn interest until you die, or it goes toward the purchase of an insurance policy with the funeral home as beneficiary to pay for the costs of the funeral.

The funeral director generally does not get paid until the services are delivered. There is some risk that your money won’t keep pace with the rising cost of funeral services, but some plans guarantee that those services will be provided even if there is a shortfall.

While the whole process of planning and prepaying for a funeral should provide peace of mind, do not rest easy about putting money down until you know if you can get your money back, especially if you move or the funeral home is sold.

What if your family wishes to change the plans? Maybe you will outlive your friends and the family will see no need for the two days of visitation you had planned. Or maybe they will find a reason to go against one of your other wishes for their own peace of mind. Find out how those charges will be handled and whether excess monies will go to your estate.

Most importantly, take your time making funeral arrangements. Pre-planning makes sense, but there is no reason to rush into it.