Final expenses are those that occur after the passing of a loved one. These expenses can include the cost of the funeral, the final disposition of remains, and any other costs associated with closing bank accounts, credit cards, etc. Final expenses can be a significant financial burden for survivors, especially if they have not been properly planned for.
In the United States, the average cost of a funeral can range between $7,000 and $10,000, according to the National Funeral Directors Association. This does not include other expenses, such as burial or cremation, transportation, flowers, and obituary publication. It’s important to note that these costs can vary depending on the region and individual preferences.
How can final expenses be planned for?
There are several ways to plan for final expenses and help reduce the financial burden on loved ones. Here are some options to consider:
- Personal savings: One straightforward way to plan for final expenses is through personal savings. You can establish a specific savings account for final expenses and regularly contribute to it. It’s important to note that this requires discipline and time to accumulate enough money to cover final expenses.
- Final expense insurance: Final expense insurance is a type of life insurance policy specifically used to cover final expenses. These policies are often more affordable than other life insurance policies and can provide a convenient and easy way to plan for final expenses. It’s important to carefully read the terms and conditions and work with a reliable insurance broker to find the best insurance option for your needs.
- Final expense trust: A final expense trust is a trust set up specifically to cover final expenses. Assets are held in the trust and used to pay for final expenses when the time comes. It’s important to work with an attorney to establish an appropriate trust and ensure all legal requirements are met.
- Pre-planned funeral arrangements: Pre-planned funeral arrangements involve selecting and prepaying for funeral services. This can include choosing a casket or urn, final disposition of remains, and any other details related to the funeral. Pre-planned funeral arrangements can help alleviate stress and financial burden on loved ones and ensure that the wishes of the deceased are honored.
- Body donation to science: Donating one’s body to science is a way to reduce final expenses and contribute to medical research. Some organizations accept body donations for research and medical education. It’s important to research and find a reputable and recognized organization that accepts body donations.
In summary, final expenses can be a significant financial burden for survivors, and it is essential to plan for them.
