Preplanning your own funeral arrangements can save your family not only stress, but money
By Robbie Woliver • Bankrate.com

So, you've prepared for your retirement, your children's college tuition and the other major late-in-life events. But have you forgotten one?

Your death.

If you do not plan it because the subject is taboo, you may leave your family a devastating tangle of short-term money problems you would never knowingly inflict on them.

So, for the moment, try to coolly inspect ways the costs associated with your death can be paid before the event, or at least organized for payment so your family won't have to do it.

After a century of a declining death rate, mortality is expected to rise almost 5 percent by 2050. And right now the baby boomer generation is preparing to inherit $10 trillion from their parents. That's the big picture. But individually, each of us will handle it differently, and getting organized before it's too late is catching on.

Planning ahead
"Prepayment and preplanning is a big trend," says Kelly Smith, public relations director for the Wisconsin-based National Funeral Directors Association.

A spokesman for the family-owned Gutterman's New York- and Florida-based funeral homes agrees.

"It's happening more and more. Older people don't want to burden their children, so they are making all the arrangements while they're still alive."

Preplanning can take care of money worries, big and small, at a time of grief. Beatle-wife Linda McCartney assembled such a detailed, finely tuned prepaid trust, that after her death her husband, Paul, skirted the 40 percent inheritance tax on her $230 million fortune.

"While planning ahead is essential, sometimes people forget that there are prepayment options as well," says Smith.

The California Department of Consumer Affairs says that one reason to decide about your arrangements in advance is that prices may go up over time. And because businesses may close or change ownership, it's a smart idea to review your plans every few years, making sure your family is aware of any changes.

If you do decide to prepay for funeral and/or cemetery services, you have several options. Smith says, "Make sure your plan is one that is portable, refundable and provides ongoing financial benefit."

Prepaying for flowers, clergy honoraria, newspaper notices and music might also be helpful to your family.

Funerals are big business
Funerals can run from less than $1,000 to whatever the customer is willing to pay. The average cost is about $5,000. And that doesn't include burial. An average traditional Catholic funeral including wake, mass and service would cost about $7,500, according to Smith. Traditional Jewish funerals have few extras (e.g., no flowers) and according to Gutterman's, a Jewish funeral runs the average $5,000.

The death-care trade is a $25 billion business. Casket mark-up can be as high as 1,000 percent.

According to the California Department of Consumer Affairs, at many mortuaries, two hours of hearse time, which costs about $25 to provide, are billed to the bereaved at $200 or more. Flowers, grave vaults, monuments and thank-you cards are all marked up 300 percent to 800 percent. With a cemetery plot and marker, a typical American funeral can now run upward of $8,000 or more.

Rising burial costs have caused the cremation rate to rise from 3.7 percent to more than 21 percent. As with ground burials, there are many options with cremation.

As with burial you can find prepayment plans or make arrangements through banks or lawyers for payment at the time of your death. Urns or other containers may be placed in a columbarium, a room designed to contain cremated remains. Families may decide to bury the urn in a family plot or cemetery. The urn may be kept at home, or scattered by air, over the ground or over water. There can be funeral services and even visitation. Some death-industry consumer advocates warn mourners that that visitation for cremation is manipulated by some funeral homes to make the family upgrade.

The price of a cremation can be less than $1,000 or as expensive as the average funeral. A full service with burial usually costs around $2,500. But there are extras such as flowers, memorial book and so on to consider, too.

Smith, who represents 13,000 funeral directors from privately owned funeral homes, says publicly held companies provide funerals that are "much more expensive."

Industry experts also suggest that you contact an estate planner who will make sure you have enough money to have everything done according to your wishes, and insure it's all done properly.

Estate lawyers recommend that besides leaving a will, you should leave detailed information on where to find all your financial records:

• List all your stocks, bonds, money market and retirement accounts, etc.
• List all your banks (with addresses), account numbers, safe-deposit box information and trust accounts for which you are a beneficiary.
• List insurance policy details and where to find your birth certificate, car registration, house deed, contracts, and paperwork for pending lawsuits.
• Leave your Social Security number accessible, as well as phone numbers of anyone who should be contacted, both personally and professionally.
• And definitely leave your password and screen name if you have information on your computer.

You should also consult an attorney on the best way to ensure that your decisions are followed. Because your will most likely won't be officially read by the time of the funeral, arrangements will be expedited if you had a living will.

Put your information and wishes in writing, give copies to your family members and your attorney, and keep a copy in a handy place. The CDCA warns: Don't keep your only copy in a safe-deposit box. Your family may have to make arrangements before the box can be opened -- for example, on a weekend or holiday.

"At the time of burial, you don't want the family fighting over details like whether the deceased should be in a suit or a shroud," said Gutterman's.

Buy carefully
Visit and inspect several funeral establishments and compare services offered, restrictions, rules and prices. Then decide how much you want to spend. If you buy a casket at a retail outlet, be sure to ask if the outlet will deliver it or if it needs to be picked up. Also compare prices at several cemeteries and ask about their endowment care funds.

As with any other major purchase, your funeral demands comparison shopping. Retail casket companies claim they are making it easier for you by opening up free-standing discount casket stores. Smith gives them a thumbs down.

But if that's the route you choose, make sure you know, in advance, how the casket gets delivered, who delivers it, what happens if it is damaged or is the wrong item.

From pre-need policies that allow you to pay for your funeral and burial in advance to credit card insurance -- which for a substantial charge (60 cents for every $100) can pay off debts after death -- you can save your family a good deal of frustration and money.

Know the rules
Consumers do have some federal protection when dealing with funeral homes. The "Funeral-rule Law" enforced by the Federal Trade Commission has the primary purpose of helping consumers avoid unneeded or unwanted items. The funeral director must fully disclose all prices to the consumer before discussing arrangements. The law also prevents false claims -- such as caskets preserving bodies or that embalming is required -- to be made about certain funeral products and services.

Smith, 55, is just starting to pre-plan his own funeral. He has an insurance policy, which will cover funeral and burial, and he wants to be buried in a funeral director friend's oak coffin.

"This will save my family a lot of grief," he says.

Not to mention the money.

-- Posted: March 24, 2000