This article originally appeared as a column for the Cleveland Jewish News.
In thinking of an estate plan, most people think first of a will. You may think next of things like joint and survivorship deeds, life insurance, or payable on death, or POD accounts. Perhaps you have gone so far as to create a trust. Hopefully, you have double-checked the beneficiaries of your retirement accounts and you may even have long-term care insurance. But did you know that you can preplan and prepay your own funeral?
Ohio law specifically provides for something called a “preneed funeral contract.” Generally speaking, the consumer of this type of plan will work with a funeral director to do everything from selecting a coffin to making service and burial arrangements, and that consumer will have the opportunity to select all goods and services related to his or her own funeral. And, those goods and services can very often be purchased at today’s rates, even if they are not needed for years.
If you think that this type of plan may be for you, a reputable funeral home should:
- Provide detail and pricing for all goods and services offered, and provide an itemized statement outlining your ultimate selections and the costs of each; and
- Provide a written preneed funeral contract outlining your rights and obligations.
The written contract should address:
- What happens if the selected goods or services are no longer available at the time they are needed?
- Can the contract be canceled and under what circumstances?
- Where are the prepaid funds deposited? Typically these would get invested in a vehicle like an insurance policy or an annuity, so that any increase in expense is covered without further cost to the family.
- What happens if the price of the prepaid goods/services changes before those goods/services are needed? Are prices guaranteed?
- If any income or interest is generated from the prepaid funds, how is that treated for tax purposes?
- What are the geographical boundaries of the contract, and what are the options if you move (or die) outside of that geographical area?
Obviously this is an uncomfortable topic. No one wants to think about planning a funeral. Not only does this task come at a time of sorrow, but the planning is daunting in and of itself. There are so many questions to answer and decisions to make regarding how best to offer a final fitting tribute to a loved one.
There may even be disagreements between surviving family members about what should be done. And, then, there is the cost to consider. Even the simplest of arrangements can total many thousands of dollars. While it may be uncomfortable to think about, preplanning can remove that burden – both financial and emotional – from your loved ones, and can also give you more control over the execution of your last wishes.
*Andrew Zashin writes about law for the Cleveland Jewish News. He is a co-managing partner with Zashin & Rich, with offices in Cleveland and Columbus.