Preplanning Your Funeral Arrangements

By: AARP Education & Outreach | Source: AARP.org | March 15, 2005

Allan is a planner. After his wife's unexpected death, he decided it was time to plan his own funeral. He invited his son Bill to go with him to the funeral home. Bill was reluctant but went along to support his dad. Both of them felt better afterwards for sharing in the decision.

After visiting several funeral providers, Allan decided to pre-plan his arrangements. He wanted control over the final details of his life, and wanted his family to be free of needing to make difficult decisions. Allan created a list of his wishes and gave copies to the funeral provider and his son.

He did not want to pay for the services now, so he created a separate account, making sure his son had access to the account. Although Allan chose one of the least expensive caskets, the entire funeral and burial process added up to $8,100.

Two million people die every year in the United States. For consumers, funerals and burials are big businesses. A funeral is one of the most expensive events in one's life: the average cost of a traditional funeral is close to $7,000. If you add flowers, obituary notices, acknowledgment cards, burial liners or vaults and special transportation, your costs go up. When emotions are high, it can be hard to remember that the cost of a funeral is not a measure of your feelings for the deceased. It's not unusual for a family to spend $10,000 for a funeral today.

Most people don't have much experience in making funeral arrangements, so it is hard to feel prepared. Making decisions can be difficult because we aren't familiar with funeral goods or services, and we may be experiencing strong emotions when a loved one has died. Instead, take a lesson from Allan and make funeral arrangements a part of your overall estate planning. If you wish, you can pre-plan the ceremony, select the music, or design the memorial cards, all without paying in advance.

Shopping for Funerals

Allan was pleased to learn that he could get information to help him compare prices. The Federal Trade Commission, through the Funeral Rule, requires all funeral providers to give consumers accurate, up-to-date itemized pricing information.

The Funeral Rule requires a provider to give you free copies of price lists when you visit a funeral home. The lists show what options are available and how much each option costs. Funeral homes, but not cemeteries, must also tell you prices over the telephone. Many funeral homes will mail their price lists to you, although the law does not require this.

Many people select a funeral home based on family tradition, location, or reputation. That can be costly. If you choose a provider without comparing prices, you may pay more than necessary. It is wise to call or visit at least two funeral homes and compare prices before you make a selection.

Allan got three separate price lists from each provider: a general price list, a casket price list, and an outer burial container price list. He used all three lists to compare the total costs for goods and services.

Price Lists

The general price list itemizes the cost of every service and product the provider offers. It may include:

• Fee for the funeral director's professional services: conference, consultation, paperwork and overhead.
• Transportation, care, and preparation of the body.
• Fee for facilities and staff to conduct a viewing, wake, visitation, or funeral or memorial ceremony.
• Flowers, music, and preparing obituary notices and cards.

General price lists usually include the costs for alternative arrangements. One alternative is an immediate burial, when the body is buried without embalming, usually in a simple container. There is no viewing or ceremony with the body present. A package price for immediate burial would include the funeral director's fee, transportation and care of the body. It may not include the charge for a container, casket or simple pine box.

Another alternative is direct cremation, which costs from $300 to $600. However, the total cost will depend on other services you may want. If you choose direct cremation without a wake or viewing of the body, you would also pay for the funeral director's services, a non-metal container for the body, the cost of transporting the body to the crematorium and an urn for the ashes. According to the National Funeral Directors Association, cremations accounted for 35% of all final dispositions in 2007 in the United States.

Allan was surprised to see so many options on the casket list. A casket can be the single most costly item in a traditional funeral. Caskets made from expensive woods such as mahogany or teak can cost $10,000 or more. There are many styles of caskets, and many less expensive options. You can choose a metal, wood, fiberglass, or plastic casket. In the past, only funeral homes sold caskets, but now cemeteries and third parties on the Internet sell caskets. You should collect casket price lists from several sources and compare the costs of a particular model.

Under the federal Funeral Rule, a funeral home cannot add a charge if you choose to purchase a casket from an outside source. If you choose direct cremation, an immediate burial or to donate a body to science, no casket is needed.

The funeral director explained the third price list for the outer burial containers. Most cemeteries require the use of a grave liner or vault to surround the casket in the grave. The outer burial containers prevent the ground from sinking as the earth settles over time. In some areas, both funeral homes and cemeteries sell vaults and liners. In others areas you may be able to purchase an outer burial container from a third party and have it delivered to the cemetery. You can collect outer burial container price lists from several providers and compare the costs of a particular model.

Should You Prepay or Not?

AARP urges you to be cautious about signing a pre-need contract or making other financial arrangements with a provider to pay for your funeral in advance. In the past, some people lost money when companies were involved in fraud, bankruptcy or mismanagement of the funds. Before you make a commitment, find out where your money will be kept and what the terms are. Ask the provider what will happen if you move and wish for the funeral to be elsewhere. Can you transfer the contract to a new city or get a refund?

Even if you don't prepay the funeral provider, there are many ways to set aside the money for your funeral. You can use a separate account, like a certificate of deposit. You can create a shared bank account with someone close to you, who will use the money for your funeral. People who need to become eligible for Medicaid can set aside a certain amount of money for a funeral. What you need to do to do this is governed by the law in your state.

Take Action

• Learn more about your rights under the Funeral Rule from the Federal Trade Commission.
• Get answers to questions about preplanning your funeral from the National Funeral Directors Association.
• Check out the information and discussions at the Funeral Consumers' Alliance Web site.