Money Matters – Over The Hill Gang: Should You Prepay Your Funeral?

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420x316-grad-lee Dee Lee
Dee Lee is a Certified Financial Planner who received a diploma in...
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BOSTON (CBS) – There is an Indie movie, Get Low, starring Robert Duvall which is worth seeing. Duvall plays a hermit who decides not only to prepay his funeral but to have it early for he wants to be there for the party. He wants good food, pretty flowers and good music. He wants to hear the stories people have to say about him. And he wants to set them straight if they are incorrect. The movie was based on a true story.

The average funeral costs close to $8,000 and add in the reception and cemetery plot and you could be looking at $10,000 or more.

If you are looking to do this on the cheap, Costco and Wal-Mart sell caskets and urns.

If you are 60, I am just not sure it’s a good idea to prepay for something that may not occur for another 20-30 years. And in 20 years you could be living in a different town or state.

There are advantages to prearranged and prepaid funerals:

  • The burden of making the funeral arrangements is done.
  • Your last wishes are recorded. Where and what kind of service you would like is all pre-arranged.
  • It may help to spend down your assets to be eligible for Medicaid.

But I do believe the disadvantages outweigh the advantages. The Funeral Consumer Alliance of Eastern Massachusetts agrees. Pre-planning is very good. Prepaying is too restrictive.

  • You may be stuck with the funeral plot if you should move
  • It may be very difficult to change the arrangements
  • Contracts are often very strict and can be cancelled if you miss a payment
  • There may be finance charges involved
  • Refunds may be reduced by sales charges
  • There may be hidden fees such as commissions to the person who sold it to you.

Sadly, from experience, I know that pre-planning works and helps the survivors cope during a very stressful time.

A better idea would be to leave a letter of instruction to your family as to what kind of service you would like and take the time to plan it and then set side some money to cover the costs. A CD, savings bonds or a life insurance policy will do or let them worry about paying for it.

You’re gone so it’s not your problem any more. My daughter is going to have to sell my Volvo to pay for my funeral for I plan to spend all of my money while I am alive!

One more thing:  I have heard from a few funeral directors on this issue. They disagree with me. Of course any business wants to lock in future business and a prepaid funeral does just that. Life holds many twists and turns for us and locking in anything doesn’t sit well with me.

Do your homework. You may very well have a relationship with a local funeral director and feel comfortable pre-paying. Massachusetts has good laws on the books but very little enforcement.

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