Pre-Paying Funeral Expenses

[UnrealizedPotential]

I did this for my Grandmother in 2007 and she died in 2012. I had the benefit of knowing what my Grandmother wanted because I asked her. I simply showed the receipt to the mortuary when my Grandmother passed away.

I did get a call from the mortuary who sold me the prepaid funeral expenses, but nothing had changed. I think it was a good decision to do it that way. I was the one who lived near her, and my mother didn't want to do it. I simply wrote up a note requested and guided by the funeral director releasing my mother from the responsibility and giving me the responsibility and she signed it.

Looking back, it ended up turning out fine.

 

[mountainsoft]

I mentioned my mom can probably live 6-7 years on her assets before applying for Medicaid. I was thinking of having her "gift" me 10K-15K that I could set aside in a savings account of my own. When she dies I could use that for her funeral expenses. If I do this now it would be before Medicaids five year lookback, and 15K would fit within the tax free gifting limit in 2018. Does this sound like a good idea, or am I overlooking something?

 

[timo2]

DW and I purchased a Niche that we liked in a new wall of a cemetery. Her parents and grandparents are in the same room. So that is why we pre-purchased the niche.

The Niche's are actually in glass cases, and people put mementos from the deceased person's life in the cases.

I don't know if we would pr-purchase the cremation because, as others have said, who knows where we will need to be cremated.

 

[Sunset]

I mentioned my mom can probably live 6-7 years on her assets before applying for Medicaid. I was thinking of having her "gift" me 10K-15K that I could set aside in a savings account of my own. When she dies I could use that for her funeral expenses. If I do this now it would be before Medicaids five year lookback, and 15K would fit within the tax free gifting limit in 2018. Does this sound like a good idea, or am I overlooking something?

If you or your family are that tight for money, then don't get sucked into enriching the funeral home so much.
Price out cheap funerals now, and you can easily get one for a lot less than $15K.
Probably in the $5K or less range...

 

[Nemo2]

You guys have convinced me! Just went out and bought a box, (on sale of course), of extra strength garbage bags.......now all DW has to do on the day is to find someone to help her haul me to the curb.

 

[mountainsoft]

If you or your family are that tight for money, then don't get sucked into enriching the funeral home so much.
Price out cheap funerals now, and you can easily get one for a lot less than $15K. Probably in the $5K or less range...

Oh, I'm sure a funeral will probably cost less than 15K but it's more a matter of being able to set aside that money now before it would affect her Medicaid application in future years. 15K is the tax free limit for gifting in 2018, which is why I am considering that amount. Even before she dies I could use a portion of that to help her with personal needs since the Medicaid personal spending is so small (about $57/mo in Washington, won't even pay her cable bill).

 

[Teacher Terry]

Medicaid allows you to prepay the funeral costs. I did this for my friend because I was her guardian. I had to keep all the receipts to show Medicaid when she died.

 

[Teacher Terry]

My DH is a vet so we have reserved spots in the veteran's cemetery 30 minutes from us.

 

[ncbill]

Supposing you have prepaid and you're out of the country when you die....as the song goes "Then what?"

Happened to an older relative.

They were cremated & the cremains shipped home.

Took two weeks (post-9/11 regs?)

So they didn't arrive until the day of the funeral.

Many jokes about that, given their "last-minute" nature.

As you can guess, shipping a body home is much, much more expensive.

 

[PawPrint53]

My father prepaid his expenses and picked out his urn. A couple of years before he died, we moved him into a place near us in another state. When he died, we contacted a funeral home in our town that took that particular plan and made the cremation arrangements. We received a refund of some of the money because the expenses weren't as much where we lived. Worked out well and was very easy for us.

 

[braumeister]

You guys have convinced me! Just went out and bought a box, (on sale of course), of extra strength garbage bags.......now all DW has to do on the day is to find someone to help her haul me to the curb.

If you have a whole box of the bags, remind her that she can use a number of them -- no need to stuff the whole carcass in just one.

Ever see the movie 'Fargo"? There's a scene near the end ...

 

[marko]

We've had two local funeral homes go out of business. (It's a dying business)
I'd hate to have ponied up $10k 15 years ago and now be out of luck.

 

[BrianB]

After my Father died and my Mother started to get more frail, she asked me to help her get arrangements made. We visited the only funeral home in our small home town and the director was very nice. She wanted a traditional funeral with luncheon at her church (is that a Minnesota thing?) The total cost was about $10k including cash stipends to the musicians & singers.

She prepaid by using a paid up term insurance policy from an A.M. Best rated company for $10k that would pay to her estate and the funeral home. The director said that was their standard method, so there were no worries about them going out of business, and if in the end we wanted to use another facility the payment could be directed there.

When she died the final bill was a little under the $10k amount, so the facility sent the extra back into her estate. The funeral home took care of all the details so I could focus on time with relatives.

It was so nice to have all the decisions made, and it eliminated a lot of the stress that comes when dealing with a death.

 

[Nemo2]

Ever see the movie 'Fargo"? There's a scene near the end ...

If she has to buy a wood chipper there goes the savings.

 

[meierlde]

We've had two local funeral homes go out of business. (It's a dying business)
I'd hate to have ponied up $10k 15 years ago and now be out of luck.

Check your states laws in Tx for example either the funds go into an trust account , or the funeral home buys a life insurance policy with the money. This handles the issue of a funeral home going bankrupt.

I suspect other states have similar rules. You should ask before spending how the money will be held, and what happens if the funeral home in question goes out of business.
Note BTW if cremation is an option it can cost less than 2k if no other services are required.

 

[Gevans17]

I saw what happened with my mother in law when her husband died. They had a ore paid burial policy. I went with her to the funeral home to help her make the arrangements. It was awful. They walked us through a large room of expensive caskets to a closet. In the closet was the “casket” that came with her funeral plan. It looked like a fabric covered box you might bury your cat in. It was terrible to have to witness that bullsh*t. No way I would ever consider any plan with those vultures.

 

[Walt34]

I mentioned my mom can probably live 6-7 years on her assets before applying for Medicaid. I was thinking of having her "gift" me 10K-15K that I could set aside in a savings account of my own. When she dies I could use that for her funeral expenses. If I do this now it would be before Medicaids five year lookback, and 15K would fit within the tax free gifting limit in 2018. Does this sound like a good idea, or am I overlooking something?

Tread carefully, and you would be wise to consult with an elder law attorney who practices in the state where she lives before doing this. While Medicaid is a federal program, it is administered by the individual states and the rules do vary, sometimes significantly, from state to state.

And what if she unexpectedly passes before the expiration of the five year lookback? In that case you may have been better off pre-paying for a funeral since that is not considered an asset by Medicaid. That's what we did with FIL, but by that time his life expectancy was measured in months.

 

[mountainsoft]

Tread carefully, and you would be wise to consult with an elder law attorney who practices in the state where she lives...
And what if she unexpectedly passes before the expiration of the five year lookback?

We did consult with an elder law attorney early on, though not on this specific matter.

The five year look back comes into play when she applies for Medicaid. If she should die before then, she won't be on Medicaid anyway. If she dies while on Medicaid, it will already be beyond the five year time frame.

Just an option I'm looking at. We need to sell her house and wait for her CD to mature next summer before we can really do anything.

 

[aja8888]

If she has to buy a wood chipper there goes the savings.

No sense making a pile of parts. Just slip on bag over each end after dousing the body with lye, then overlap the bags and wrap duck tape a few times around the circumference. Leave next to the trash cans and mark the bags as "heavy trash". in our neighborhood, we must get a tag for heavy trash. Yours?

 

[Nemo2]

No sense making a pile of parts. Just slip on bag over each end after dousing the body with lye, then overlap the bags and wrap duck tape a few times around the circumference. Leave next to the trash cans and mark the bags as "heavy trash". in our neighborhood, we must get a tag for heavy trash. Yours?

We have to put tags on everything that isn't recyclable........hmm...recyclable...maybe there's a loophole I can use.....

 

[akidagain2018]

It is essentially a savings account. In addition it allows you to preplan. Companies are in the business of doing this on a model similar to life insurance, some are winners for the company, some not so much. Your estate is essentially the counterpart and in hind sight the return on your prepayment (deposit) may or may not look like a good deal depending on time frame it's prepaid/deposited compared to alternative investment/savings vehicles. If preplanning is important, you can do that without prepaying. But prepaying may give your peace of mind, which is a benefit that goes beyond financial returns on the prepay. You pay in today's dollars for a service to be delivered later when the value will most certainly be higher, hence, essentially a savings account. States differ about legal right to funds deposited and companies abide by those state rules.

 

[Crewer]

Did anyone mention donating your body to a med school? My mother was so happy that years ago she'd filled out the paperwork to do that but then she moved to a different state after getting dementia. The local med school did take her, though, and I'm sure she'd be pleased about that. Got cremains back for internment but months and months later. In the meantime we had a wonderful memorial service with lots of family (and of course we played some of her favorite music including Stan Freeberg's Banana Boat Song - I guess some of my friends now know why I'm a bit odd or maybe it was only confirmed at that service - my mother was one of a kind - "full of whimsy" is how one person described her). Total cost was low, though I did make a donation of a couple thousand dollars to the med school.

The odd thing was that I couldn't get her will accepted by the court until I had a letter saying there were no funeral expenses or expenses to dispose of the body.

My father had also done the paperwork to donate his body but died with a bad infection so they wouldn't take him.

I was thinking of filing out donation forms assuming I find out the med schools still need bodies. My kids can decide where to have me interred (or scattered). I just want to preplan some of the music for the memorial service.