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Pre-paying for funeral arrangements

Many people buy funeral goods and services in advance on the premise that by doing so they lock in a favorable price. However, increased competition in the funeral business suggests that prices could actually decrease with time. Further, pre-paid arrangements are difficult, if not impossible, to change. If you've bought a cemetery plot and a casket, and signed up for a range of funeral services, but subsequently decide that you'd prefer another option, or move, you may not be able to recover your money.

Consider where you'd like your final resting place to be, and whether you'd prefer cemetery burial, entombment or having your inurned ashes placed in a columbarium.

Consider pre-payment of funeral arrangements carefully. You may be tying yourself to goods and services in such a way that may make it difficult to retrieve your money if you change your mind.

Read the contract between yourself and the funeral home very carefully before you sign it. Ensure that it includes the answers to such important questions as:

• What protection do you have should the funeral home close?
• Under what circumstances are you entitled to a full or partial refund?
• What happens if you die while traveling far away?
• Or if you move somewhere else? How much of what you have bought is transferable?
• How secure is the money you've put down? What are the state's regulations with respect to the fund in which it is held?
• What happens to interest earned by the money in excess of any increases in the cost of the goods and services for which you have arranged?

Don't make assumptions; you need to actually know the answers. Get everything in writing. State regulations vary with respect to such contractual agreements.

You should consider having an attorney look over any pre-need funeral contract before you sign it.

One prepayment option is to take out a life insurance policy to cover the cost of the funeral arrangements you want, and make the funeral home the beneficiary.

If you do choose to pay for your funeral in advance, most funeral homes offer payment plans. You might also consider setting up a designated bank account in which to accumulate savings for your funeral. If you do, ensure that someone you trust will be able to access it at the time of your death. If the account is in your name alone, the funds will be frozen while your estate is settled.