While it is common to set aside funds in advance of major life expenses like adoptions, educations and weddings, it is far less likely that healthy individuals will pre-fund their funeral expenses.
This lack of attention may make sense in the short-run, as people work hard to raise their families with the requisite mortgage payments, retirement planning, and daily living expenses this entails. The truth is, funerals are expensive and very few people have the resources to pay for them outright.
Lack of planning can cause you to be a burden to the very family you worked your whole life to protect. Without advance planning and funding, some survivors find themselves dipping into savings accounts, using credit cards, taking out loans or even selling personal assets to pay for funeral expenses. Even if you have the money to pay for your own funeral, it may be tied up in probate at the time your grieving family is trying to access it.
Obviously, no one wants to be a financial burden to their families, but very few people have access to extra disposable income to pay for a funeral up front. So, where do you get the money to prefund your funeral? Odds are you already have it. It could be in the bank, money market, or even in another insurance policy. Different payment plans are available from single pay to multi-year pay. We can help tailor your policy to meet your specific needs and goals.
Examples of vehicles used by many include savings accounts, certificates of deposits (CD), annuities, money market accounts, or mutual funds. All of these can hold money for the purpose of paying ones funeral expenses, but not all are protected from creditors.
Purchasing an insurance policy on yourself to cover the anticipated costs of your funeral and then assigning that policy to an irrevocable funeral trust allows you to enjoy the following advantages:
- At time of death the policy proceeds do not have to go through probate and are available immediately to pay for final expenses.
- The state of Wisconsin allows you to put this policy into a funeral trust and immediately exclude it from any Medicaid calculations.
- The policy, once placed in the irrevocable funeral trust, will be safe from creditors like nursing homes, hospitals, and lawyers.
- While you are living and the policy is in force, it will be earning simple interest so the amount available for your funeral will continue to grow.
Purchasing a life insurance policy on yourself and assigning that policy to an available no cost irrevocable funeral trust is a great way to set your mind at ease that your loved ones are protected from potential costs of your funeral.
I can help you develop the plan that works best for you and your family. Call for an appointment today.