Everyone has experienced the loss of a loved one at some point in their lives. It’s a sad and emotional time when families come together to decide how to honor and remember the dearly departed. The last thing on most people’s minds during such a time is money. But the cost of a funeral, if desired, can be as high as $5,000 to $10,000, or more. Unfortunately, failing to plan for this expense in advance may leave loved ones with significant additional distress, and can even expose them to exploitation and scams at the hands of unscrupulous funeral providers.

Many seniors sign contracts to pre-pay funeral expenses with funeral homes, in an attempt to ensure that loved ones avoid the hassle of dealing with issues related to their passing. Some individuals decide to pre-pay their own funeral costs in an attempt to spend down assets to qualify for Medicaid. Regardless of the motivation for signing a pre-paid contract, you can typically expect two kinds of pre-paid funeral plans: the guaranteed or unguaranteed option. As the name suggests, the guaranteed plan typically locks in or “guarantees” the cost of a funeral at a set price, which includes expenses such as the coffin, the service, music, and other services. The guaranteed plan therefore protects individuals from rising prices and inflation. In contrast, the unguaranteed plan offers no such price lock and leaves the senior subject to market fluctuations and other issues that are likely to affect expenses and services related to their funeral plans.

Individuals who decide to pursue a contract in pre-paying funeral expenses should make every attempt to address specific issues that may arise, so as to avoid confusion later in the process. Some of these problems might include: (1) the funeral home going out of business; (2) the possibility of materials (e.g. coffin) no longer being in stock; (3) notifying friends and loved ones of your plans and pre-paid these expenses, so that they don’t make other arrangements; and (4) your options, if you change your mind about your plans or wish to cancel the contract. To avoid disputes, consider consulting your attorney before signing such an agreement.

If you do decide to pre-pay for your funeral in advance, keep the contract and relevant receipts in a safe and secure place. Let your family members and attorney know about these plans. By carefully considering your funeral arrangements and expenses in advance, you can help ensure that your last wishes are carried out according to your wants and needs.