Have you ever considered paying in advance for your funeral/burial expenses to save your loved ones the financial burden? If your finances allow you to do so, pre-paying for funeral/burial services is an efficient and effective step in your estate planning that can alleviate the often onerous task for your loved ones to undertake while grieving. A few words of caution if you do pre-pay for funeral/burial services: TELL YOUR LOVED ONES!
Why? You likely do not want to join the list of individuals who caused their loved ones to pay for services that were already paid for due to a lack of communication regarding the purchase of a pre-paid insurance policy. It is critical to inform your loved ones that your services were pre-paid, and inform them of the location of the paperwork or insurance policy to avoid duplicative payments after you are gone.
To emphasize the importance of communicating your estate planning with your loved ones, the American Association of Retired Persons reports an actual situation where burial services were paid twice due to a lack of communication. Specifically in 1973, a woman purchased a prepaid full-burial insurance policy from a local funeral home. When she passed away in 2008, her family paid $8,128 to lay the woman to rest because they were neither aware of the burial policy nor advised of its location. The family later found the policy among the woman's possessions. The woman's daughter presented the burial policy to the funeral home and asked for a refund. The request was declined as untimely because it fell outside the window of time set forth in the policy for seeking payment.
Generally, contemporary life insurance and burial policies do not have payout expiration dates. However, older policies may set forth a particular window of time in which to make a claim for payment of the policy.
Be Proactive. Take steps to organize your affairs, put your wishes in writing, and secure your documents in one place to make it simple for your family. Plan your estate so that your loved ones have the tools and authority they need to carry out your wishes and safeguard your legacy. An estate planning attorney can assist you in creating a highly effective estate plan.