When you get to your estate planning, your thoughts might first settle on deciding what of your estate goes to which loved one. Other potential avenues of planning include guardianship and powers of attorney for your last years if you end up impaired.
One factor of estate planning tends to go overlooked: the funeral. Planning on what you want for your funeral and putting away money for it ahead of time may help relieve some pressure on the grieving process. Investing in a preneed contract or funeral trust removes the task of them having to tackle it in the wake of your death.
What goes into a preneed contract?
A funeral preneed is a contract you enter into with the funeral home in question. They draft up an agreement that details a number of options for how to handle your body and any services you want. This includes whether you prefer burial or cremation as well as options for embalming, your casket and any add-ons like flowers and headstones.
How do you pay for a preneed contract?
Once you sign the contract, the funeral home holds onto those details and may arrange for one of several money-saving options. As Funeralwise.com describes, funeral contracts and trusts are the main methods of saving for a funeral.
These trusts are either revocable or irrevocable and each has its own strengths and weaknesses. A revocable trust has money you still have access to. An irrevocable trust has a lot more restrictions but does not count towards your assets when determining Medicaid.
This sort of decision involves a lot of complex legal arrangements. Entering into a contract or funeral trust should include plenty of communication with your loved ones and any other resources to help you sign the right agreement that conveys your wishes best.