The butcher, the baker, the candle stick maker. Does anyone go to the butcher for a candle? Would anyone even think of asking the funeral director for investment advice? The financial advisor, while very knowledgeable about money and investments, has little experience in helping a family honor the life of someone they love. Yesterday you could hold the hand of your loved one, today you must figure out how to say good-bye. Tomorrow you will begin the difficult task of living without the one you love. In the midst of all of this you will need to plan and pay for a funeral service. Helping families navigate those difficult days or to plan for this inevitable event is the job of the funeral director.
Accessing the dollars to pay for a funeral is where the financial planner can help. A financial planner who is familiar with a family’s financial resources can help them decide how and when to pay for a funeral. In a perfect world the investor, that’s you, would not die on a day the market was down, or just as his stocks were on the rise. He would die when it is a good time to take the cost of his funeral out of his investments. His heirs would not be burdened with tax consequences. Truth be told, life just does not always work out perfectly. We do not decide when we die.
This is what you can do. Plan the funeral with your funeral director. Talk to her about service options that will help your family cope with your loss. Talk to her about how much you are comfortable spending. Become educated about the advance payment options that are offered through the funeral home.
Ask if you can pay for your funeral in monthly payments over a few years. Ask what happens if you die before you complete all payments. Many funeral homes fund funerals with insurance products designed just to pay for funerals. That can mean the funeral will be paid for by the insurance company should death occur before your payments are completed.
Ask what happens if the cost of your funeral increases between now and when you die. Is there protection available for funeral inflation?
Talk to your spouse. If you die first, who will pay for the funeral? Where will the money come from? Will there be tax consequences? Would it be easier for the one who will be responsible if the funeral plan were funded? Decide what will work best for your family.
Now, go to your financial advisor. Ask him if you should pay for your funeral in one single payment now, or should you take advantage of one of the payment plans? Share all the information you receive from the funeral home. Get financial advice, not permission, from the one who looks through the lens of the dollars, the financial advisor. Get your funeral planning advice from the one who helps families cope with death, the funeral director. Make your decisions for the ones you love, with the ones you love, your family.