Most of the clients I deal with have money set aside to pay for important events in their lives: a new house, a vacation, college tuition for the kids, and sometimes even a wedding. Planning ahead is a good idea because you make sure the money is there when you need it.
What about funeral planning? Have you given that any thought? When I ask these questions, I typically hear one responses:
- “We have money in savings.”
- “I have life insurance.”
- “We have a ‘special’ account to cover funeral costs.”
Sound familiar? Like other major life events, prefunding your funeral will give you peace-of-mind, comfort, and assurance knowing that money will be there to pay your final expenses.
Not much is worse than losing a loved one. To add to the heartbreak, most survivors and heirs are not prepared to spend $10,000 or $20,000 (or more) out of their own pockets paying the funeral home to bury that loved one. For some it is the reluctance to spend their own money. For others it is the simple fact that they cannot come up with the amount needed to carry out their loved one’s wishes.
This leaves people in the unenviable position of having to dip into their savings, use credit cards, take out loans, or even sell personal assets. None of these options are appealing. Moreover, money set aside in savings accounts or other “special” accounts of the deceased may be tied up with probate delays. Life insurance proceeds will not be paid out until a death certificate has been issued. This can routinely take a month or more leaving your heirs to figure out how to pay for your funeral.
IS THERE A BETTER OPTION?
YES! By using a funeral trust you are able to preplan for the inevitable, save your heirs headache/heartache, and prevent your heirs from the stress and pressure of coming up with needed funeral costs.
The trust actually works like a life insurance policy without a required medical examination. The applicant completes a questionnaire, pays a lump sum amount, the policy is issued, and peace of mind is achieved.
The benefits of a funeral trust include:
- TAX FREE payout of benefits
- Guaranteed, TAX FREE growth of death benefit (up to 2.5% annually)
- Use funds at ANY funeral home
- No medical examination required
- Funds are protected from creditors such as nursing homes, hospitals, lawyers, etc.
- Death benefit is immediately available (within 1 business day) to pay the funeral home and your beneficiaries
- Any excess benefits not used to pay for your funeral are payable to beneficiaries of your choice
Where Do I Get the Money?
You probably already have it. It may be a rainy day fund, a Certificate of Deposit, money market account or even in another insurance policy. By using money from those sources to fund an insurance policy, you’re giving your family the gift of peace-of-mind.
If you have excess cash sitting in the bank earning less than 1.0% then this is a great option for you. If you are uninsurable, this is the best option for you. Not only do you give the gift of peace-of-mind, you can earn up to a 2.5% annual death benefit increase far outweighing what you are earning at the bank. Further, you are preventing your heirs and loved ones from being in the position of coming up with out-of-pocket funds to cover the cost of your funeral until death certificates and claim forms can be filed on your life insurance policies (which can take up to a month or more). The death benefit is paid TAX FREE to your heirs after funeral costs have been deducted.
If you would like further information about how these plans work and the benefits they provide, contact Green Law, PLLC today at (806) 548-2953 or email us at email@example.com.