the top 5 questions to consider before setting aside funds for final arrangements

1) Why Fund a Trust for Final Arrangements?

Think about some of your life’s most memorable milestones: getting married, starting a family, getting an education, or simply saving for something special: your dream vacation, perhaps, or a home of your own. These events don’t just happen. You consider options. You plan. You save.

Funerals and Final Tributes Require Planning. The same proactive approach that applies to preparing for retirement is equally applicable to the process of funding end of life preferences.

More and more each year, people just like you are taking the time to think about how they will be remembered; making decisions now and setting aside funds for final arrangements in advance so that those left behind won't have to do it.

2) How Many People Make Arrangements in Advance?

It is estimated that of Americans ages 50 plus – 34% have planned their own funeral – 24% have prepaid at least a portion of funeral and burial expenses.

Approximately 75% of individuals have either underfunded their final arrangements or neglected setting aside funds or making plans for a final remembrance. Most put it off thinking they will do it at a more "convenient" time or when they get around to it. 

3) How Does Setting Funds in Advance Protect Loved Ones?

Even if you have the funds on-hand now, who’s to say that they will STILL be readily available in your time of need? Long-term care is a major expense and a growing concern as we age. In fact, 43% of Americans 65 and older will need nursing home care at some point - an expensive situation to be in. You may need medical assistance to help pay for this care . . . But will you QUALIFY?

By using a trust to set aside funds for your funeral, you are effectively “spending down” your assets, preventing them from being counted as excess monies and, possibly, from being disqualified from Medicaid or VA Aid & Attendance Benefits.

Setting aside funds to pay for final arrangements in advance protects your family from the expenses and financial pressures associated with planning a final tribute -- and allows your family and loved ones to focus on a life well lived. 

4) How Does a Final Arrangements Trust Work?

Here’s how the trust works: A funeral home does not need to be visited in advance -- simply designate the amount of money required to provide the funeral you want and then, the funds and policy for your final arrangements are assigned to an irrevocable Trust. The underwriting company typically does not charge a fee for the Trust or assignment of the policy.

By irrevocably assigning this policy to the trust, the trust becomes owner and beneficiary, and the funds become excluded from your assets, protecting them from creditors and possibly Medicaid. 

The policy amount increases, tax-free, until the time of need, is free from probate costs and delays, payment is expedited to the funeral provider (usually within 24 to 48 hours) to pay for final arrangements, hospital bills or any expenses associated with end of life issues. Excess funds from the policy are then disbursed to your estate or designated beneficiary.

5)  Why Can't I Designate a Life Insurance Policy for Final Expenses?

Cash Value Policies little value in Final Expense planning -- many policies are usually not liquid at the time of need and lose all or most of the cash value due to the high cost of premiums required to keep the policy in force.

The cash values of Life Insurance polices as a "countable asset" and can disqualify the owner from Medicaid and VA benefits if the values are in excess of maximum allowable guidelines. 

Solution: In most cases, Cash Value Life Insurance policies can be 1035 "tax free" exchanged for a Final Arrangements Trust – thereby allowing the value of the trust to become exempt and non-countable.

For more information on funding a Final Arrangements Trust send your questions to: