Funeral planning used to be fairly straightforward: go down to the local funeral home, select your casket, write the funeral home a check to pre-pay, and throw around opinions on an open or closed casket. However, like most things in life, as time has passed, the complexities have grown. Not only have the options increased, but so have the opinions and misinformation about funeral pre-planning. Here are five things funeral directors wish you knew about funeral pre-planning.

1. The options are endless, so have conversations now.

Most funerals today are not like your great-aunt Sally’s funeral twenty years ago. Not only have options continued to evolve and expand over the past few decades, but they have taken an increasingly personalized and reflective form. This growing recognition emphasizes that honoring a loved one’s life should be as unique as the life they lived. Not to mention, the way a culture honors and celebrates its departed has always been intrinsic to its member’s beliefs, faith, and customs. As communities grow in diversity, so do their death rituals—or lack thereof.

However, the diversity in memorialization is not the only broad spectrum. Today, increased options for final disposition have expanded well beyond simple burial or cremation options. While burial and cremation remain the most common forms of disposition, a gamut of other options have also entered the scene. Alkaline Hydrolysis (known as water cremation or Aquamation), Natural Organic Reduction (known as body composting), Green Burial, and donation to medical sciences are just a few of the many options available. Even further, consider the variety of choices for the final placement of remains. Should they be scattered, buried, kept, turned into stones, pressed into diamonds, or shot into space? There are ample options to choose from.

“Just cremate me,” is not funeral planning. The multitude of decisions to be made in the course of funeral arrangements illustrate why it is so important to have these conversations long before someone passes away.

2. Encourage clients to pre-pay. Someone. For something.

Talking about the financial aspects of funeral services is often funeral directors’ least favorite part of the discussion. But the reality is, no funeral director will sit across the table from a grieving family and say, “I wish they wouldn’t have pre-paid for this.” Funeral directors are caregivers who want to provide seamless care for families during their grief. If they could do it for free, they probably would. Unfortunately, final expenses are significant, and families need to plan accordingly.

Even when a decedent has sufficient assets, it can be challenging for loved ones and/or authorized representatives of their estate to access those funds soon after death. This means their next of kin must produce large sums of money, which they may not have, very quickly, adding stress to an already trying time. The key is to take advantage of funeral pre-payment products to ensure funds are available. The different types of products include:

• Preneed insurance is a common funeral insurance policy often written through a selected funeral home, which irrevocably assigns the proceeds of the policy. Unlike traditional life insurance, which provides a lump-sum payment to beneficiaries and often takes weeks to months to secure, preneed insurance pays the funeral home directly.
• A funeral expense trust (FET) is similar to preneed insurance but is assigned to a funeral trust, which is held by the insurance company. Rather than being associated with a funeral home, the funds from an FET are paid directly to any funeral home that cares for the family at the time of death, providing greater flexibility and portability to the family at death and allowing the policyholder to avoid any tax consequences.
• Other forms of pre-payment include assignment of life insurance polices, funeral trusts from banks, and final expense insurance.

3. Everyone benefits from pre-planning.

Although some may see the value of funeral pre-planning for others, they fail to recognize the importance of pre-planning for themselves. The reality is that clients spend considerable time, effort, and money setting up parts of their estate plan that may never come to fruition in an effort to safeguard their family and finances. But the one certainty in life—their death—seems too complex or unpleasant to check off the list.

Historically, funeral pre-planning was only for seniors, but the target audience has shifted in recent decades. This is a crucial step for everyone, regardless of age, as it ensures that final wishes are respected and reduces the emotional and financial burden on loved ones during a challenging time. There is no crystal ball to see what the future holds. The realities of life and death necessitate having the conversation sooner rather than later. By planning in advance, individuals can make informed decisions about their funeral arrangements and achieve peace of mind, knowing that everything is taken care of, and family members will not have to navigate these challenging decisions while grieving.

4. Plan for Medicaid purposes.

Everyone hopes they will not require costly care in a nursing home, but statistics show that many will face this reality. By 2050, the Center for Medicare and Medicaid Services estimates that the number of people who will need long-term care will more than double. As seniors live longer, healthier lives than ever before, more individuals will require Medicaid to supplement the cost of their care during their final years of life. All fifty states allow Medicaid applicants to allocate a portion of their assets for their funeral expenses—with no lookback concerns. Most commonly, this is done by irrevocably assigning proceeds via preneed insurance or a funeral expense trust. This ensures that funds are tucked away in a compliant manner, allowing surviving family members to avoid a hefty funeral bill at the time of loss.

In many states, Medicaid applicants may also purchase funeral pre-planning products for certain family members, including their spouse, children, children’s spouses, siblings, and other loved ones. By investing in these exempt products, clients can ensure that their family members’ funeral expenses are covered, preserving their financial legacy, and providing peace of mind. This not only helps meet Medicaid eligibility requirements but also offers the dual benefit of careful financial planning and compassionate care for family members during difficult times.

5. Pre-planning is one of the greatest gifts clients can give their families.

Everyone makes better decisions with time, input, and clarity of mind, but the reality is when someone passes away, families do not have those luxuries. Often, they find themselves grief-stricken and sitting in front of a funeral director within 24 hours of death, required to make some immediate next-step decisions. The rise of denuclearized families also presents unique challenges in the process. Blended families, estranged relatives, and non-traditional arrangements add additional complexity to the process of organizing one’s final wishes.

Picture Alice, a thoughtful mother in her late seventies who suddenly becomes ill. Her family flew in from out of state and spent what would be her last days at her bedside in the hospital before her death. After her death, the nurse politely looks to the children for direction. With little time to collect themselves, the children begin to speculate about what mom may have wanted, who they should call, or what ought to be done next. That feeling of uncertainty carries through the following days as they plan their mother’s services and fulfil what they thought she may have wanted. Unfortunately, a difference of perspectives comes into competition when sibling and in-law dynamics seem to spontaneously combust. A normally well-functioning family is struck with stress, grief, and a difference of opinions. The situation is further exacerbated by the financial circumstances.

Fortunately, that story can have an alternate ending. In this different scenario, Alice had a few important conversations ahead of time and clearly communicated her final wishes to her family. She even allowed them to weigh in on some of the decisions, curating meaningful choices about what would be most healing for all her children and grandchildren. Because basic decisions were outlined and funds were allocated to prepaid planning, Alice’s family was able to manage their grief and care for their loved ones, while handling the smaller, more intimate details as they came up. This clarity can prevent potential conflicts and confusion among surviving relatives, fostering a smoother and more respectful farewell. It also provides a sense of control and peace of mind for the client, knowing that their end-of-life preferences will be honored.

As funeral pre-planning continues to evolve, estate planners must be ready and willing to adapt to these changes to best serve their clients. By proactively incorporating funeral planning elements into their practice, they can help clients ensure that their final wishes are honored while alleviating emotional and financial stress on surviving family members. Additionally, funeral planning can offer strategic financial benefits, such as reducing taxable estate assets and ensuring Medicaid eligibility through exempt funeral trusts and pre-paid plans. Integrating this aspect into estate planning not only enhances the value of the services provided but also fosters a holistic approach to securing clients’ legacies and peace of mind.