Pre-Paid Funeral Contracts – Are They a Wise Choice?

What Steps Do I Need to Take Following the Death of a Loved One?

You would undoubtedly prefer to spare your loved ones from having to go through additional grief and stress following your own death. While you cannot entirely spare them from the emotional impact of your passing, you can spare them additional stress and anxiety by incorporating a funeral planning component into your estate plan. As part of that component, you may consider investing in a pre-paid funeral plan with a local funeral home. The Coral Gables estate planning attorneys at Stivers Law explain what you need to know about pre-paid funeral contracts.

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The Financial Reality of Death

Along with the emotional impact your death will have on your loved ones, they will have to pay for your burial and funeral if you did not already do so. As of 2022, the average cost of a basic funeral is well over $10,000 – and that price doesn’t include many of the extras that most people want at a funeral, such as flowers and music. Grieving survivors often end up spending even more than is truly necessary if they are forced to make decisions just days after suffering a loss.

Why a Pre-Paid Funeral Plan May Not Be the Solution

No one wants their loved ones to be faced with more stress and anxiety than is inevitable following a death. Pre-planning your own funeral and burial is undoubtedly the best way to limit that stress and anxiety; however, a pre-paid funeral contract may not be the best way to do that for several reasons, such as:

  • Changes are difficult, if not impossible, to make. Pre-paid funeral contracts lock everything in as of the date you execute the contract. Pre-paying at today’s prices is the incentive used to get people to agree to these contracts; however, you are also locking in all the details of your funeral. If you decide you want something different, such as to be cremated instead of buried or to be buried next to a new spouse because you remarried, you probably cannot modify the terms.
  • You cannot know with certainty where you will be living. You may plan to remain where you are, but you simply never know. A late-in-life love and remarriage, grandchildren, or even health issues could all cause you to move to another city or state, making your funeral contract with a local funeral home inconvenient at best and effectively worthless at worst.
  • The funeral home could go out of business or end up in bankruptcy. This happens more often than people realize. If you enter into a contract when you are 60 and live to be 85, a lot can happen to that business in the intervening 25 years. If it goes out of business, your contract is essentially worthless and the money you paid is lost.
  • Disputes cannot be litigated. Unlike most contract disputes, litigating a dispute over a pre-paid funeral contract isn’t a viable option because there is a very small window of opportunity for the contract to be fulfilled – and the family and loved ones need it to work flawlessly or it is really of little use.

Are There Other Options?

Talk to your estate planning attorney about creating a funeral trust instead of purchasing a pre-paid funeral plan. A funeral trust allows you to fund your funeral and choose someone to oversee the funeral and service. With a funeral trust, you can even make legally binding decisions about how your body will be handled and decide the details of the service to ensure that your wishes will be honored.

Contact Coral Gables Estate Planning Attorneys

For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about the benefits of a pre-paid funeral contract versus a funeral trust, contact the experienced Coral Gables estate planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.

Author Bio

Justin Stivers is the founder and managing attorney of Stivers Law, an estate planning firm specializing in wills, probate, trust administration, and financial risk management services. Justin’s approach goes beyond just creating legal documents. From aligning investments with estate plans to ensuring comprehensive insurance coverage, he safeguards a client’s legacy from unforeseen circumstances. His commitment extends beyond individual transactions, fostering lifelong partnerships to provide ongoing support and guidance.

With an impressive track record, Justin is licensed by the Florida and the Tennessee State Bars. His professional portfolio boasts Series 65 registration as a Registered Investment Advisor, the Wealth Management Specialist™ designation, and a 2-15 License for Health, Life, and Annuities. His dedication to excellence has earned him positions like Board Member of the Estate Planning Council of Greater Miami, Business Eagle Member of the Florida Justice Association, and active membership in esteemed organizations like the American Academy of Estate Planning Attorneys.

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