If you do not want to burden your loved ones when they are grieving your death, you have probably thought about planning your celebration of life or funeral. You should not forget to set aside some money to pay for it, though. After all, according to the Zebra, the median cost of a funeral in the U.S. is currently almost $8,000.
Luckily, there are many options for paying for your funeral expenses while you are still alive. A popular one is a funeral trust. Still, before you jump into a funeral trust, you need to know exactly what it is and what it does.
A pooled trust
A funeral trust is one the funeral home or cemetery creates. With this type of pooled trust, you transfer money or property into the trust during your lifetime. When you die, the trust pays your funeral and burial or cremation expenses from funds in the trust.
Because you take care of your final expenses when you are alive, your loved ones do not have to figure out how to pay for them shortly after your death.
A few cautionary notes
While there are many good reasons to participate in a funeral trust, you should perform some due diligence before doing so. For example, you should know whether the trust is revocable or irrevocable. You also should think about how the trust might affect your eligibility for future public benefits, such as Medicaid.
Ultimately, if a funeral trust is right for you, you should be sure to find a funeral home or cemetery that is likely to be responsible with your money.