The concept of paying for your own funeral may sound strange, but that sort of preparation can go a long way to easing financial pressure on your grieving loved ones when the time comes. You may save for your funeral through a variety of methods like funeral trusts, payable on death accounts and preneed contracts.
These options may also assist you when it comes to arranging your finances for Medicaid, making it an important choice to talk over with your family at any point in your life.
Funeral trusts and preneed contracts
As Funeralwise.com details, a funeral trust is a financial vehicle designed to let you set aside money for anticipated funeral costs. These often partner with preneed contracts with funeral homes that detail service rates and casket prices.
An advantage to these trusts includes agreeing to fixed rates based on the agreed service charges in the contract. If they are irrevocable trusts, they may count as protected assets for purposes of Medicaid spend-down strategies.
Preneed contracts do not necessarily need a funeral trust though and some funeral homes allow for payments or lump sums to afford the agreed-upon costs.
Payable on death accounts
These accounts help you transfer money to pay for your funeral costs as well. It still establishes a beneficiary to receive those funds upon your death. That beneficiary may still be the funeral home you arranged things with but may also be your executor or a loved one.
The important aspect of choosing which agreement works best for you is communication with your loved ones and organization through your legal resources. This process of estate planning may go smoother by making sure any contracts clearly convey your wishes.