Prearranging and Pre-financing of a
Funeral and Other
In today’s society, many people recognize the
importance of estate planning. Wills and life insurance help ensure the financial and emotional well-being of survivors in the event of our death.
Through funeral planning in advance of need, and
often pre-financing, many questions about death and
funerals can be answered, and some of the problems
associated with death can be minimized. For some
people, planning in advance gives assurance of a
funeral that will represent their personal beliefs or
lifestyle. For others, it is a way to help their families
deal knowledgeably with their death.
The following information will assist you in identifying the advantages of planning a funeral in
advance of need for you, your family and friends.
The Value of Planning in Advance
Death is a challenging subject to discuss with one’s
family. Yet, talking about it openly can be of great
benefit to those who must ultimately face its reality.
Funeral and final disposition arrangements should
be discussed in a frank and honest manner and personal wishes should be made known. In addition,
information about available alternatives, options, anticipated costs, and other financial aspects should be
sought from a knowledgeable, experienced source so
that some decisions can be made before the crisis
occurs. When appropriate, advance planning ranging
from basic prerecording of personal information to
specific arrangements for funeral services and payment for these services can be spelled out as
guidelines for survivors.
The experience and assistance of a funeral service
practitioner will be helpful, if not required, in the planning of a funeral in advance of need. A personally
chosen practitioner can provide important information about available services, facilities and
merchandise, costs and possible financial benefits for
survivors. Responsible suggestions based on professional training and experience help survivors cope
with the death and grief crises.
Even if no formal arrangements are made in
advance, the process of seeking information can
benefit those who must make important decisions
immediately following the death of a family member
or friend. Most decisions made at the time of need
are irreversible when carried out. The inexperienced
and untrained should not be relied upon for information and advice.
How To Begin
The first step in planning funeral arrangements is to
seek facts from a funeral service practitioner concerning all the possible alternatives. Then set aside a
time for an open discussion with the members of
your family. It Should be an informal yet purposeful
discussion that attempts to take into consideration
everyone’s feelings about death and the activities
which immediately follow it.
Talk frankly about the kind of arrangements you
feel would be appropriate and listen carefully to the
ideas of the others. If it is your funeral being
arranged, take their feelings into consideration, for
although the funeral will be caused by your death, it
will be for them, and it is they who must deal with
the practical and emotional problems which will arise
following your death.
During the discussion, make a list of questions you
wish to be answered prior to making specific
It is prudent to select a funeral director. You
should seek one who will be straightforward with you,
sensitive to family expressions, and responsive to
your requests. Satisfying your needs is his/her
greatest reason for fulfilling your trust.
It may be beneficial to have a conference with
members of your family and the funeral director. Also, you may want to visit the funeral home to
ascertain procedures, costs and professional
philosophy. Potential survivors will be helped if they
already have developed a rapport with the funeral
director. During this visit, you and your family can
record personal information and begin to put your
wishes into writing.
Funeral establishments will provide you with a
written memorandum of the decisions that you make. This serves as a guideline both for survivors and for
the funeral director who carries out the arrangements at the time of death.
Generally, it is recommended that your decisions
be sufficiently broad and flexible to give your survivors options in the event of
unforeseen circumstances. One of the primary reasons for making prearrangements is to
assist your survivors, not to bind
them to overly-rigid procedures which might deny
them the opportunity to meet their wants and needs.
Changing circumstances can significantly alter
family needs and desires. Also, you are making plans
for an occasion that may not take place for years to
come. The effects of inflation should be considered
Upon completion of the prearrangement form, the
funeral service practitioner will keep a copy in the
funeral home’s permanent confidential files and will
provide copies for your family. It is the funeral director’s responsibility to have these easily accessible to
those family members who will have the responsibility for carrying out the funeral arrangements at the
time of death.
Just as your will and life insurance coverage should be examined and updated periodically, so
should your funeral prearrangements be reviewed
and modified to reflect changing circumstances. But
be sure that changes are made on all copies,
including the one held by the funeral home.
In some instances it may be best to make prearrangements that do not legally obligate your survivors
to execute your wishes nor bind them to any specific
financial expenditures. This procedure is a recording
of personal information and a statement of your
wishes to serve as a guideline for your survivors in
making final funeral decisions.
Pre-financing of Funerals
Including provisions for pre-financing your funeral
prearrangements can be helpful to survivors, assuring them that funds will be available when needed to
offset or completely cover funeral expenses.
In determining total expenditures, remember to
consider the cost of cemetery, mausoleum, or columbarium space, and/or memorialization in the form of
a monument, marker, crypt, or vase plus flowers,
honoraria for clergyperson, musicians and taxes. Such expenses generally are in addition to funeral
Financial assistance for funeral and burial
expenses come from a variety of sources. These
include personal savings, estate funds, relatives,
union or fraternal organization benefits, life insurance
policies, and when applicable government benefits
such as Social Security, Old Age Assistance,
Welfare, Veterans, and Workmen’s Compensation. During the consultation with the funeral director the
benefits for which you qualify as well as their current
dollar values can be determined.
There are two common ways to pre-finance services, facilities and merchandise desired following
death. First there is a trust agreement with a funeral home. Funds are deposited in a trust account in a
financial institution. The person making the deposit
usually maintains beneficial if not legal control of the
account and retains the right to terminate the contract at any time.
Funeral home trust agreements may simply
provide funds to be app/led to the cost of funeral
arrangements, or they may specify the exact sum
available for specific services and merchandise. Special provisions should be included in the
agreement in case you move from the area or may wish to
terminate the agreement. Laws governing trust
agreements with funeral homes vary from state to
state. To assure that your investment is protected
adequately, you should seek the following information.
- What state agency controls, regulates, or has
responsibility for overseeing funeral home trust
- What funeral merchandise, facilities and services are covered by such agreement?
- Is a permit required for the firm making the pre-financing agreement, and does the funeral
home hold such a permit?
- How much of the total amount paid must be
placed in the trust account?
- How much of the income derived from the
funds is to remain as part of the trust?
- How much of the trust can be withdrawn on
- Are the prices in the pre-financing agreement
- To what extent, if at all, is the agreement/ contract portable? Can it be used if death occurs
and the funeral is to be held other than at the
facility of the funeral director who is a party to
The second common way to pre-finance immediate
post-death services, facilities and merchandise is
through specially designed funeral or life insurance
policies which provide cash to be used for funeral
and burial expenses. These are life insurance
policies. You should be certain to select an insurance program which is under the control of your
state’s insurance regulatory agency and which is
underwritten by a reputable company.
Your own specific needs and desires will help
determine which of these options to select. Your
state’s law, in most cases, will be specific about
what procedures are permitted. In any case, no
money should be paid without having a written agreement that specifically states the terms of the
pre-financing procedure. A key to a successful and
beneficial pre-financing program is careful counseling
with an experienced and trusted funeral director. It
can prevent involvement in fraudulent pre-financing
schemes, and it can be a big step toward feeling secure about what will happen concerning
arrangements after death occurs.
Some Final Thoughts
Prearrangement and/or pre-financing of funeral plans
is an important consideration for any family. It can
help alleviate some of the burden placed on the survivors by the death of a family member.
This can be accomplished best through frank discussions with family members and by consultation
with a funeral director.