BUSINESS

Pre-funding can be a part of funeral planning

Personal Finance. By Katherine Vogt, AMNews staff. Jan. 17, 2005.

The toll that a death takes on a loved one or relative can go well beyond the emotions of grief and loss. Often overlooked is the fact that paying for a funeral can be one of the most expensive purchases of that person's life.

The Federal Trade Commission estimates that the average funeral, including a casket and vault, costs about $6,000. But extras such as flowers and newspaper death notices can add thousands more, and many funerals well exceed $10,000. With more than 2 million funerals every year, that means Americans spend billions of dollars each year to lay their loved ones to rest.

To protect friends and families from the added heartache of economic hardship, industry experts say that more and more people are taking measures such as pre-funding their funerals or factoring those costs into their estate plans. With payment methods ranging from trusts and life insurance to simple bank accounts, options can be tailored to individual financial needs.

To plan ahead, it's necessary to have an idea of what type of funeral arrangements are wanted. The total tab can vary widely depending on the type of services.

The biggest price variable is the casket, which can range from a few hundred dollars to a few thousand, said George Clarke, executive director of Selected Independent Funeral Homes, a 1,500-member organization of funeral homes.

He said that, contrary to popular belief, cremation is not necessarily less expensive than earth burial because accompanying services and other costs can add up. And even making an anatomical donation to an academic medical center can have costs associated with it for transferring the body, cremating the remains or preparing the death certificate.

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