Understandably, most people prefer not to dwell on their own mortality. The idea of sitting down and planning your own funeral and burial may not sound very attractive; yet, there are several reasons why you may wish to do just that. Adding a funeral and burial component to your overall estate plan relieves your loved ones of the need to plan and finance your funeral and it ensures that your wishes will be honored. One of the most popular funeral planning tools is an irrevocable life insurance trust (ILIT). The living trust attorneys at Kulas & Crawford explain how a trust can be used as a funeral and burial planning tool and why you may wish to include one in your estate plan.
Death Is Expensive
While the old adage “nothing in life is free” may be true, it appears that nothing in death is free either. On the contrary, death can be very expensive. Experts tell us that an average modest funeral and burial will run over $10,000. If you choose to purchase a more expensive casket or headstone, and/or the service memorializing your death is larger and/or more elaborate than average, that cost can easily double or triple. Because you will obviously not be available to assist at the time, your loved ones will be responsible for figuring out how to pay for everything involved in your funeral and burial if you failed to plan ahead. They won’t have much time to figure it out either. Making matter worse is the reality that the salesperson working with your loved ones knows the stress they under and the grief they are dealing with – and may use that to his/her advantage. Unfortunately, many grieving survivors end up paying way more than they should for funeral and burial services simply because they weren’t thinking clearly when they signed the contract or negotiate the purchase.
Grief Leads to Poor Decisions
No matter how frequently nor how thoroughly you have discussed your feelings on issues related to your own funeral and burial, there is a very good chance that things will not be handled according to your wishes unless you ensure that they will by planning them yourself. The vast majority of people don’t handle decision making well when they are under stress of any kind. If that stress is caused by the very recent death of a spouse, parent, or other close loved one, you can’t really expect the individual to be thinking clearly much less making well thought out decisions. Even worse is the very real possibility that loved ones will end up in a full-blown battle over control if they don’t all agree how to handle your funeral and burial.
How Can a Living Trust Help?
While there are a number of different ways in which you can structure your funeral and burial planning component of your estate plan, a common option is to create an Irrevocable Life Insurance Trust (ILIT) and use that to fund your funeral and burial. The way it works is that you create an irrevocable living trust and either purchase a new life insurance policy or a transfer an existing one to fund the trust. Because the trust is irrevocable, assets held by the trust will not be accessible to creditors nor considered when determining Medicaid eligibility. Upon your death, the proceeds of the insurance will pay out directly into the trust to be used to fund your funeral and burial. The terms of the trust, created by you, are then used to make decisions regarding the disposition of your body, the type of service that occurs, and anything else related to your funeral and burial. Because you also appoint the Trustee of the trust you effectively stop and squabbles over who is in charge before they even get started.
Contact Living Trust Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding how a living trust can be used as part of a funeral and burial component within your estate plan, contact the experienced Florida living trust attorneys at Kulas & Crawford by calling (772) 398-0720 to schedule an appointment.