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How can you pay for your funeral in advance?

On Behalf of | Jun 14, 2022 | estate planning | 0 comments

Many family members find themselves scrambling when it is time to pay for a funeral, whether they expect a death or not. That sort of financial pressure on top of your loved ones’ grieving is something that smart preparation may help avoid.

According to the National Funeral Directors Association, a funeral in the Pacific region of the US, including California, runs between $6,028 and $7,225 depending on if you decide on cremation or burial. That median estimate may change depending on the services you want. Knowing that starting total is one thing, paying for it is another.

Funeral trusts

A trust is a good way to have a place to save up money over your years now to afford your funeral services later. When seeking an individual trust, there are a few options. A funeral home may help you set one up when you contract with them. You may also open one with a bank and specify the funeral home as the primary beneficiary.

An alternative to an individual trust is a professionally managed master trust program, which comes with its own nuance.

Payable on death accounts

A payable on death account, sometimes known as a Totten Trust, is another convenient way to transfer money. While you are alive, you may name a beneficiary and handle the account. One big advantage of these is that they may avoid probate.

No matter what option you choose, each comes with a contract. It is important when making this choice to investigate your options and lean on your resources to make sure these contracts stipulate your wishes in a clear manner so that your money goes where it needs to.