Dimes to Dollars- a military wife's guide to personal finance: Start planning for your final expenses now

Tuesday, January 15, 2008


Start planning for your final expenses now

I know this post topic is kind of morbid, but this issue is very important. Recently, Mr. Dimes and his family had to bury his grandmother, who died suddenly but not unexpectedly right around Christmas. She had a modest funeral and burial, and her final expenses clocked in around $8,000. My mother-in-law fronted the money and will eventually be reimbursed when the estate has been settled, as the grandmother did have some real estate and other assets which could be sold to cover the expenses. Not everyone is so lucky, though.
I recently had a client whose mother died unexpectedly who was requesting over $16,000 in funeral assistance. Her mother owned no property, had no life insurance, and had done nothing to prepare for her final expenses in advance. While the client has siblings, neither individually nor collectively can they afford the costs of the burial. Their mother desired to be buried in the family plot in an area where real estate is very pricey and the burial costs are over half the cost of the funeral. I had to help a grieving client find an alternative to the burial she wanted in order to have something she could afford. This was not a particularly fun experience. Please, for the love of your survivors, do not do this to them. Plan for your final expenses now and let your family members know where they can find any information about plots, policies, final wishes, etc. Deaths are difficult enough without creating financial stress and trauma for a grieving family.

Here are a few ways to ease the financial burden on your survivors:
  • Consider prepayment of funeral expenses: If you know where you want to be placed upon your death, consider buying a plot in advance, and make sure your survivors know where it is. You can also prepay for the funeral, casket, and other mortuary services rather than requiring your relatives to front the expenses at the time of your death.
  • Have a life insurance policy specifically for funeral expenses: Both my client's mother and my husband's grandmother had small ($10K-$25K) whole life insurance policies to pay for their funeral expenses, but for one reason or another had let them lapse and when they died, there was no money. If, however, you make sure that you (or someone else) is paying on them and don't let the policies lapse, they can be sufficient to cover burial and funeral costs.
  • Consider less expensive methods of body disposal: Burials are getting to be insanely expensive, and so are funeral plots. Cremation, on the other hand, is a more frugal alternative to standard burial, and is less harmful to the environment. Some people don't like the idea of cremation for religious or other reasons, but it definitely costs less. It also has the added benefit of allowing for portability of remains; for example, if you want to be buried a great distance away from where you died, ashes are much easier to transport than an intact corpse.
  • Have a specific set of assets designated for funeral expenses: This would definitely require either a will or a joint account with a person most likely to survive you, but it could solve the problem of a family member having to front expenses and then wait for reimbursement. If you create an account specifically for funeral expenses, then a family member or the executor of your estate should be able to access those funds in order to pay for your funeral. If you're going to do this, you might as well make your wishes known as well as what should be done with any money that remains, in order to keep your relatives from donating your body to science and then flying off to Cancun with your funeral money.
While not fun, death is an inevitable (and expensive) part of life, and you can help your family tremendously by making provisions for what to do when it happens.

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Blogger Mrs. Accountability said...

My grandma died last September 7th on her 93rd birthday. She and my Grandpa had planned for everything, paying with a time payment plan that took a number of years. I don't know how much it cost them, but it was so nice for my mom and the rest of us as all we had to do was show up at the funeral home with our pastor to do the memorial service. My grandma chose to be cremated and her urn can be buried in the state military cemetery where my Grandpa's ashes are buried. Planning ahead is definitely good advice!

1/15/2008 7:54 PM  
Blogger Dimes said...

Mrs: I have an aunt who is in her 90s who has told my mother and my uncles about her final plans. She's already paid for everything, including the transport of her body to the cemetery where she has a plot alongside her husband. It really helps that we know what she wants in terms of services and also what she has already paid for.

1/16/2008 12:50 AM  
Anonymous Brooke (Dollar Frugal) said...

What a horrible time (grieving) to be dealing with money issues. I'm glad to hear that some people have it all planned. It's also good for some military members to discuss funeral plans with their families and possibly even make simple arrangements. A will and/or power of attorney are the two keys.

1/16/2008 5:56 AM  
OpenID centsandsensibility said...

My husband's work covered his burial expenses above and beyond the life insurance policy and he also had one on me had it been the other way around.
It came to about $8k but the burial policy was $10k.
I know alot of people that are single or that dont have any children dont believe in life insurance but who is going to pay for their burial? Not them of course, they'll be gone.
Wish I didnt know so much about this though! :(

1/17/2008 10:46 PM  
Blogger Living Almost Large said...

My grandfather died 1 year ago and my mom and her siblings paid $10k. No my grandparents could not afford to prepay or save anything. Sigh.

It's a great idea though.

1/24/2008 1:33 PM  
Anonymous Cheapest Life Insurance said...

Great advice. Thank you.

6/09/2008 1:17 PM  

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