Make your wishes clear
I was recently helping a couple with their estate plan when I raised the question of their final wishes. The wife assumed her husband would want a funeral with burial in accordance with their religious beliefs. To her surprise, however, he wanted to be cremated. This was something they needed to discuss sooner rather than later.
Funerals can be as elaborate as some formal weddings with major financial decisions made at a time when your family is at its most vulnerable.
However, by planning your funeral ahead of time, you can remove this decision-making burden from your family’s shoulders and allow them to focus on celebrating your life.
Some people shop for a funeral home and preplan their funeral as part of their overall estate planning. Other people wait until they have been involved in arranging the funeral for loved one. Then, they preplan or prepay, saying, “I’m not making anyone go through this on my behalf.” Still others will leave all the decisions up to their executor, saying: “I don’t care, I won’t be there.”
Those interested in making these decisions ahead of time can choose either a preplanned or a prepaid funeral.
Preplanning your funeral does not require any payment in advance. Preplanning usually involves you making the arrangements yourself and conveying them to your family. Without the pressure of time, you can find the right funeral director and select the type of funeral, services and supplies that you want and that fit your budget.
When preplanning your funeral, consider the following:
• Do you want a burial or cremation?
• Would you prefer a memorial service, which is similar to a funeral only without a body?
• If you want a casket, will it be open or closed? Rented or purchased?
• Is there any special music you want played? Particular passage read?
• Flowers? Or a donation to a charity of your choice in lieu of flowers?
A prepaid (or pre-need) funeral arrangement, involves signing a contract and paying for the items and services in advance by cheque, in installments, or by purchasing an insurance policy with the funeral home as the beneficiary. The policy’s death benefit will contribute to the cost of the arrangements.
When you prepay for your funeral, the money is held in trust in an account at a financial institution on your behalf.
Some prepaid funeral contracts are non-guaranteed. Other contracts actually guarantee the future costs of the items and services, with the funeral home covering the difference if the actual cost is more than anticipated. Under a non-guaranteed contract, the money paid goes toward the cost of the funeral and may or may not cover the full cost. If the funeral costs more, the estate will be required to pay the difference. If the funeral costs less, the extra funds might be refunded to the estate.
The contract may have a clause stating how the money will be dealt with if you want to opt out or your executor arranges your funeral somewhere else.
Regulations governing this differ across the country. In Newfoundland, for example, if you cancel the contract, the funeral home must refund the money paid (after deducting the lesser of $250 or 10 per cent of the money paid) as well as any income that has accrued. In B.C., the money paid can be refunded within 30 days. Once a pre-need contract has been completed, the funeral home is entitled to retain up to 20 per cent of the contract, as well as the cost for any unique pre-ordered items.
Before signing a contract, be sure you understand each clause and that you are protected if you change your mind.
Despite all of your best-laid plans, the final responsibility for arranging your funeral actually lies with your executor. He or she can legally override your oral or written instructions if they are considered inappropriate. Still, by making thorough plans ahead of time, you have the best chances of assuring your wishes will be observed.