It may be difficult to contemplate, but funeral arrangements are a critical component of your estate plan. Failing to clearly communicate your wishes for the disposition of your remains can lead to tension, disputes, and even litigation among your family members during what is already a difficult time.
Issues to Address
The methods for expressing these wishes vary from state to state, and may include a provision in your will, language in a health care proxy or power of attorney, or a separate form specifically designed for this purpose.
Whichever method you use, it should, at a minimum, state:
Beware of Prepaid Funeral Plans
To relieve their families of the burden of the costs of a funeral, some people pay for them in advance. Unfortunately, prepaid funeral plans can be fraught with potential traps. Some plans end up costing more than the benefits they pay out. And there may be a risk that you’ll lose your investment if the funeral provider goes out of business or you want to change your plans.
Some states offer protection — such as requiring a funeral home or cemetery to place funds in a trust or to purchase a life insurance policy to fund funeral costs — but many do not. If you’re considering a prepaid plan, find out exactly what you’re paying for. Does the plan cover merchandise only (casket, vault, etc.) or are services included? Is the price locked in or is there a possibility that your family will have to pay additional amounts?
How the State can Intercede
If you fail to make your burial wishes clear, and your family members disagree about how you would want your remains disposed of, the outcome will depend on applicable state law. Absent express instructions from the deceased, some states give priority to the wishes of certain family members, such as spouses or children, over other family members, such as siblings.
To avoid this situation, consult your estate planning attorney and us about your wishes. Together, we can help ensure that they’re properly documented. You can reach me at SDitman@BerdonLLP.com or contact to your Berdon advisor.
Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.