FUNERAL PLANNING— WHY IT SHOULD BE INCLUDED IN YOUR ESTATE PLAN While the Idea of Planning Your Own Funeral Don't Hold Much Appeal, There Are a Number of Reasons Why You May Wish to Consider Doing Just That As Part of Your Overall Estate Plan
NASH NASH BEAN & FORD, LLP ILLINOIS ESTATE PLANNING ATTORNEY
If you are like most people, the idea of planning your own funeral and burial may not hold much appeal. While this is certainly understandable, there are a number of reasons why you may wish to consider doing just that as part of your overall estate plan. If you have a family, your death will undoubtedly cause them grief, yet in the midst of all that grief they will be required to plan and fund your funeral and burial if you failed to do so ahead of time. Along with adding unnecessary stress to an already difficult time for your loved ones, there is a good chance your wishes will not be honored because no one is sure what your wishes are with regard to your funeral and burial.
DECISIONS THAT NEED TO BE MADE When someone dies there are a seemingly endless number of practical decisions that must be made – most of them within a very short period of time and under a great amount of stress. Unless you have personally planned a funeral before you likely have no idea how complicated it can be to plan one. Just a few of the decisions that must be made when planning a funeral include: What funeral home to use Cremation or burial? If cremated, what is to be done with the ashes? Open casket or closed? Should you plan a wake or visitation prior to the funeral?
Funeral Planning—Why It Should Be Included in Your Estate Plan
www.nashbeanford.com
2
Should you plan a reception or gathering after the service Where to be buried? Who will officiate over the service? Who will be pallbearers? What music and flowers to order Do you want videos or photos at the service? Who will speak or deliver eulogies at the service?
By including funeral planning in your estate plan you can alleviate the need for your loved ones to make difficult decisions during an emotionally charged time.You can also provide a way to fund your funeral and burial, removing that stress from your survivors as well.
Do you want donations made to a charity in your name? Who should be invited to the service and burial?
HONORING YOUR WISHES Your funeral and burial should be conducted in a way that honors your wishes. Regardless of what your religious affiliation is, or whether you even have a religious affiliation, you likely believe that the dead should be honored. Your family and loved ones will undoubtedly want to do just that – honor you and your wishes; however, if they don’t know what those wishes are how can they honor them? There are four basic methods for expressing your wishes with regard to your funeral and burial:
Funeral Planning—Why It Should Be Included in Your Estate Plan
www.nashbeanford.com
3
Discussing Your Wishes with Loved Ones –most people, at some point in time, express their basic preferences to a spouse, parent, or child. You have likely indicated whether you want to be buried or cremated, for example. While this is a start, simply discussing your wishes is often insufficient to ensure they are carried out. First, you are unlikely to include the amount of detail needed to cover everything involved in your service and burial. Second, there is no way to know, with certainty, that the person you discuss your wishes with will survive you. Finally, even if you discuss your funeral in some detail with a spouse/parent/child and that person survives you, chances are most of what you discussed will be forgotten in the midst of the emotional turmoil and grief your loved one is going through after your death. Letter of Instruction –a letter of instruction is an informal document that you typically include with your Last Will and Testament. Although it has no legal merit, it allows you to put in writing anything important that might pertain to your death, such as your wishes for your funeral. A letter of instruction can be as simple, or as detailed as you wish and may be revised as often as you feel is necessary. The major drawback to a letter of instruction is the fact
Funeral Planning—Why It Should Be Included in Your Estate Plan
www.nashbeanford.com
4
that it is not legally binding on anyone, meaning that your loved ones may choose to abide by the instructions you leave in the letter but are not required to do so. Pre-planning –many funeral companies allow you to pre-plan, and pre-pay, for your funeral. This allows you to make some, or all, of the decisions relating to your funeral ahead of time and to decide where the service will be held. The drawback to this option is that there is no guarantee the funeral home you select will still be in business when you die. Funeral Trust –the last, and most formal, option is the creation of a funeral trust. Not only can a funeral trust arrange for payment of your funeral and service (discussed below), but the terms of the trust can be used to plan your funeral. Using your ability to create your own terms you can dictate, with great detail if you choose, exactly how you wish your funeral and burial to be handled.
FUNDING YOUR FUNERAL If making all of the decisions isn’t stressful enough for your loved ones after you die, trying to figure out how to pay for your service and burial may be if you failed to provide a way to pay for it. When you die, most of your estate assets will be required to pass through probate. Assets that are included in the probate process may be tied up in court for months, even years, meaning that they may not be accessible to your family and loved ones to be used to fund your funeral and burial. Estimates vary; however, the average funeral and burial likely costs somewhere between $6,000 and
Funeral Planning—Why It Should Be Included in Your Estate Plan
www.nashbeanford.com
5
$10,000. If the majority of your assets are tied up in probate, how will your family pay for your funeral and burial? In the midst of grieving your loss your spouse, parent, or adult child may be faced with the difficult task of trying to come up with enough money to give you a respectable funeral if you failed to plan ahead and provide a funding mechanism yourself. By including funeral planning in your estate plan you can ensure that funds will be available to cover the costs associated with your funeral and burial so that your loved ones can concentrate on grieving your loss instead of on money matters when the time comes. By including funeral planning in your estate plan you can alleviate the need for your loved ones to make difficult decisions during an emotionally charged time. You can also provide a way to fund your funeral and burial, removing that stress from your survivors as well. Simply setting money aside in an account will not work because the funds held in that account will likely become part of the probate process, meaning they will be inaccessible. Again, there is more than one way to provide funding for your funeral, including:  Pre-payment to Funeral Home –many funeral homes offer preplanning and pre-payment. One problem with using this option is that if your wishes change down the road, or if you move from where you
Funeral Planning—Why It Should Be Included in Your Estate Plan
www.nashbeanford.com
6
currently live, all that pre-planning and pre-payment may no longer be useful. In addition, if you choose to pre-pay through a specific funeral home, what happens to your money if the company goes into bankruptcy or goes out of business? Even if it remains operational, does your money earn interest over the years? Life Insurance Proceeds –life insurance proceeds are not included in the probate of your estate, meaning they will be available to fund your funeral. One problem with using life insurance proceeds directly is that the beneficiary of the policy has complete control over the funds. That person then decides how the funds will be used and, for all practical intent, may make all decisions relating to the funeral.
Funeral Trust –a funeral trust allows you to create terms that must legally be followed and provide for payment of your own funeral – again on your terms. You may even choose to combine life insurance proceeds and a trust by creating the trust and then making the trust the beneficiary of a life insurance policy. When you die, the policy then pays out to the trust and the trust then pays for the funeral. If you choose to directly fund the trust the funds will earn interest as well. You will also have the ability to appoint a trustee to oversee the distribution of the trust funds when the time comes. Your trustee can be given a wide degree of discretion to make funeral decisions or may have very little discretion depending on your preference. Unlike other options, a trust also makes it easy to make changes in the event you move or change your mind about something important.
Funeral Planning—Why It Should Be Included in Your Estate Plan
www.nashbeanford.com
7
Now that you have a better idea why it is so important to include funeral planning in your comprehensive estate plan you may wish to give the matter some additional thought and then consult further with your estate planning attorney.
REFERENCES Funeral Tips, How Much Does the Average Funeral Cost National Funeral Directors Association, Planning a Funeral Federal Trade Commission, Planning Your Own Funeral
Funeral Planning—Why It Should Be Included in Your Estate Plan
www.nashbeanford.com
8
About Nash Nash Bean & Ford, LLP Dedicated to providing you with quality estate planning resources, we strive to arm you with the information you need to make an informed decision about your family's future. If you have a well-drafted estate plan in place, you'll ensure that your estate passes to whom you want, when you want, and is carried out in the manner you've chosen. Rest assured that your family won't have to endure the public process and costly matter of probate. Call us for guidance on putting a solid estate plan in place. Nash Nash Bean & Ford, LLP www.nashbeanford.com Geneseo Moline 445 US Highway 6 East 5030 38th Avenue, Suite 2 Geneseo, IL 61254 Moline, IL 61265 Phone: (309) 944-2188 Phone: (309) 762-9368 Funeral Planning—Why It Should Be Included in Your Estate Plan www.nashbeanford.com Fax: (309) 944-3960 Fax: (309) 944-3960
9