Ways to Finance a Funeral
 Most of us at some time in our life will need to make funeral arrangements for ourselves or a loved one. According to the National Funeral Directors Association, the average cost of a funeral and casket in 2010 is about $6,000. This doesn’t include the cost of a vault, cemetery plot, monument or marker and miscellaneous costs such as flowers and obituaries.
At such a stressful time it can be difficult making decisions about financing a funeral. Rather than incurring debt, it’s best to plan in advance for funeral expenses. These are three of the best options for funeral financing:
- Save for funeral expenses in a joint savings account. The account should be shared between the deceased and the person arranging the funeral so that the money can be accessed before the estate of the deceased is settled. This is a very effective way to plan for funeral expenses.
- Set up an Informal Trust or Totten Trust. Also known as a “payable on death account,” this type of bank account is used to set aside money for funeral costs. A beneficiary is named when the account is opened. Upon the death of the account owner, probate is bypassed and the account balance is paid directly to the beneficiary.
- Purchase insurance for funeral expenses. There are several insurance options available. A Funeral Insurance policy is usually issued in an amount less than $15,000 and is paid to a beneficiary prior to probate. Funeral Home Insurance is purchased directly from a funeral home and is tied to goods and services to be used for a funeral. Lastly, a Life Insurance policy can be used for funeral expenses. Since the policy amount for Life Insurance may exceed the cost of the funeral, the beneficiary should be instructed on how much is intended for funeral costs.
Catie W.
October 25, 2010
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