Why should I preplan my funeral?
Some people decide to plan their own funeral to relieve their survivors of the stress of making funeral arrangements at one of the most difficult times imaginable — at the time of an unexpected loss. Others aim to ensure that their wishes are known and will be carried out at the time of their death. Many want the security of having financial arrangements made in advance. If an individual is making arrangements for another, choosing the circumstances under which such decisions are made may prove less stressful than waiting until those survivors are under the time restraints of dealing with a death and impending funeral.
Do I have to pre-pay when I plan a funeral?
No. It is quite common for people to sit down with a funeral director and make their wishes known without making a payment. In this way, the wishes of the deceased can be set into motion at the time of death, and family members will not be forced to ’second-guess’ what their loved-one would have wanted. One may make their wishes known in as much or as little detail as their comfort level allows. For instance, one may prefer a certain clergy-person to officiate at their funeral services, or may request a certain type of floral display. Or, an individual can choose to leave such matters for their survivors to decide.
Having said that, there are many advantages to paying for your funeral arrangements when you consult with the funeral director. Payment in advance assures you and your loved-ones that funds are available, and reduces the strain involved when dealing within the short time frame between death and the funeral services. And money that is paid in advance earns interest until it is needed, which consequently keeps up with increases in the cost of living (and funeral expenses). You can expect that even if funeral costs increase, the arrangements you pay for today will be paid for by the principal and the interest that accrues and is added to your trust account.
What happens to my money if I pre-pay?
In New York State, all monies paid to a funeral home for services to be provided in the future must be held in a trust fund. Your funds are deposited in the ‘PrePlan’, a New York State-approved trust that manages your funds. Each individual account is FDIC insured. At the time this was written, the Pre-Plan trust was paying approximately 4.65% annual interest, which is added to your account as it accrues. In the event that you or a loved one applies for SSI or Medicaid, money that is set aside for funeral expenses under an ‘irrevocable’ trust account will not be considered as an asset when determining eligibility. In other words, you may set aside money to completely pay for funeral expenses before your assets are reduced to SSI/Medicaid eligibility levels. The money will be in your PrePlan account, earning interest and available at the time of need.
One thing you should know…
The laws in New York in regard to pre-planning your funeral are the best in the nation. Some states allow funeral directors to take a commission at the time the prearrangements are made. They do not have to refund all of the money paid if requested by a family and, furthermore, some states do not even provide you with a yearly statement of your funds and interest. None of this happens in New York.
What if I have already made my pre-arrangements at another funeral home?
New York State law requires that all pre-funded funeral arrangements be “portable”. This means that arrangements made at one funeral home may easily be transferred to another. The staff at the Wilson Funeral Home can help you accomplish this, or simply tell your first funeral home that you wish to change your arrangements to another funeral home. This is a common practice when one moves to another part of the country.
What about Medicaid?
In the event that you or a loved one applies for SSI or Medicaid, money that is set aside for funeral expenses under an ‘irrevocable’ trust account will not be considered as an asset when determining eligibility. In other words, you may set aside money to completely pay for funeral expenses before your assets are reduced to SSI/Medicaid eligibility levels. The money will be in your PrePlan account, earning interest and available at the time of need.