What is a funeral preneed?

| Jul 22, 2021 | Elder Law & Estate Planning

Any time you invest in estate planning, it is important to remember why. You plan your estate to reduce the burden on your future and the future of your loved ones. This happens by detailing your will or establishing trusts for the assets you want to protect.

Another way of doing this is by saving up for, or even pre-planning, your funeral expenses.

Pre-arrangements for funerals

It might seem strange to plan ahead for something like your own death, but this preparation is for alleviating the stress that comes when dealing with your death when it happens. That way your living, grieving loved ones worry about less.

According to the Minnesota Funeral Directors Association, these plans start with a funeral trust made between you and the funeral director in question. How this works depends on your agreement, but it may include a place to keep the money for services or it may include specifying all the funeral services you want.

These trusts may be revocable, meaning the funds you put in are retrievable after depositing them. If you make it irrevocable, it makes it harder to retrieve funds placed into the trust, but it means that money falls under the trustee’s assets and not your own.

There is no fee for pre-arranging in Minnesota and funeral directors may not access these funds until your family requires their services.

Preneeds and life insurance

There are a variety of ways to pay for your funeral and insurance policies offer other options as well. What is important is making sure you, your family and your funeral director are all on the same page. Make sure the agreement you sign handles your wishes accordingly.