Diary of a CFP®: 5 Steps to Help Pre-Plan Your Funeral
By Marguerita Cheng, CFP® Board of Directors
August 2020, CFP.net — Pre-planning your funeral is not easy, but doing so can help your loved ones focus on celebrating your life and honoring your legacy.
By deciding on a funeral home, burial or cremation and, perhaps, prepaying a portion of the costs, you can help family members understand your wishes and alleviate some of the financial burdens. The cost of a funeral ranges from $8,000 – $10,000, including a typical casket.
These five steps will help you help your family and loved ones:
1. Take Care of Your Family. Make Sure You Have an Up-to-date Will: If you don’t have a will, a probate court judge will decide how to distribute whatever assets you owned to your heirs. If you don’t have a will, your loved ones might feel uncertain about what to do with your assets, or worse, be more likely to fight over them.
2. Consider a Payable-on-Death (POD) Bank Account: Banks or credit unions allow account owners to add POD agreements to their bank deposits. Free, the agreements allow for the transfer of all accounts, U.S. savings bonds and certificates of deposit directly to beneficiaries. A Transfer-on-Death (TOD) arrangement is similar to a POD, but deals with an account owner’s investments.
3. Decide What to Do with What Remains: Options for services include funerals and direct burials. Options for burial include in-ground burial, above-ground burial, private or community mausoleum, and natural burial.
4. Funerals: A typical funeral includes a viewing or visitation and service. A hearse moves the body to the funeral location and cemetery. Funeral home fees include embalming, dressing the remains, and renting the site for the service. Caskets are metal, wood, fiberboard, fiberglass or plastic. The average casket costs more than $2,000, but fancier caskets such as mahogany or copper caskets could cost up to $10,000. The cost of renting a casket for a cremation is between $750 and $900.
5. Direct burials/cremations: In a direct burial, the person is buried shortly after death in a burial container. People who opt for this may plan a memorial service later. Because there is no viewing or embalming, these expenses to the funeral home no longer apply. Funeral providers must offer to provide an alternative container in place of a casket.
6. Natural Burials: “Ashes to ashes, dust to dust” has a different meaning in a natural burial. Natural burial is where the cremated remains are put in a biodegradable container destined for a wildlife conservation area or natural woodland area. The cost of this type of burial is substantially less, perhaps a few thousand dollars.