Funeral Trusts: An Excellent Opportunity to Help Families Plan and Pay for Their Funerals While They are Alive

After suffering through the grief and loss of my mother’s passing on Thanksgiving Day of 2008, it became increasingly apparent to me that End-of-Life Planning is a vital piece of any financial puzzle.

It has also become a passion and inspiration of mine to help educate every financial professional regarding the win-win opportunity of helping our clients and their families prepare End-of-Life plans and preferences in advance.

A great quote that I always reference when meeting with clients or hosting workshops is from the legendary football coach Vince Lombardi, who said:

“The main difference between failure and success is the amount of planning and preparation put into preparing for the future.”

The financial services industry frowns upon using the word guarantee when speaking with clients or prospects (excluding volumes of disclaimers). Yet, if you think about it, every client and prospective client we meet is guaranteed to die at some point. Of course, we all hope and pray we die later rather than sooner, but unfortunately, life is not just a linear journey. Rather, it is filled with constant changes, moving parts, and unexpected events.

In addition to the grief and loss we know our clients and their families will experience, why do we overlook and ignore planning for their funeral?

Two Most Common Funeral-Related Questions:

The two most common questions almost every family will ask after losing a loved one are:

1. How do we pay for the funeral?

2. What did our loved one want for their funeral?

Weddings and Funerals

If you think about it, a wedding and a funeral have many things in common. Both a wedding and a funeral usually include:

Church, synagogue, or other public facility

Flowers and decorations

Pastor, priest, or minister

Food, music, and speeches

Love, emotions, and special memories

Notifications to all family, friends, relatives, and co-workers

Planning and travel accommodations

However, here is one major difference between a wedding and a funeral:

Weddings are usually planned in a period of 6-12 months

Funerals are usually planned in a period of 6-12 hours!

Funeral Facts:

-90 percent of Americans believe pre-funding a funeral is a good idea

-10 percent have actually pre-planned and pre-funded their funeral

-According to a recent National Funeral Directors Association study (NFDA), the most appropriate time to pre-fund a funeral is:

80% – When afflicted with a serious illness

71% – With their trusted financial or insurance advisor

61% – When planning for retirement

9% – When solicited by a funeral home

-Each year, there is approximately $2.5 billion in revenue that is pre-funded through funeral homes

What is a Funeral Trust?

Below are some of the most common features and benefits of a Funeral Trust:

-An End-of-Life Plan that prearranges all the details of your final plans and preferences

-Also contains an insurance policy that pre-funds the entire plan

-Guaranteed to be fully paid for, regardless of time or inflation

-Usually guaranteed issue from ages 0 to 99

-Benefit amounts typically range from $500 to $50,000

-Payment options vary from single pay to 1,3,5,7, or 10 years

-Beneficiary is paid income and estate tax free

-All excess funds are paid to a beneficiary or their estate

-All proceeds are:

Protected from creditors and lawsuits

Exempt from Medicaid Spend Down

Portable to any funeral home

Payable immediately (no death certificate required)

Excellent Options to Fund a Funeral Trust:

Cash or CDs

Bank, savings or checking accounts

Investment accounts

Dividend or interest income

Annuities (either via income or 10 percent annual “free” withdrawal)

Annuities (new interest bonuses)

Life Insurance (1035 Exchange)

A New Opportunity Exists RIGHT NOW:

By discussing an End-of-Life Plan with your clients, you open them up to a wide variety of benefits which will clearly make this a win-win scenario. Below is a brief list of just five of the excellent opportunities that directly benefit you, your clients, and your future practice:

1. Value-added benefit for all existing and prospective clients

2. New door opener for prospective clients

3. Excellent networking opportunity

4. Enhance existing relationships and identify new opportunities

5. Add an all-important missing piece to the financial lives of the families we serve, which is largely overlooked and ignored

How Do You Begin to Have Such a Difficult Discussion?

Through extensive research, study, and expert help from the Death Care Industry, I have compiled some helpful questions below to use when beginning this difficult discussion:

If there was a recent death in your family, can you tell me what you would you be doing right now?

Do your spouse and/or heirs know your final plans and preferences? If not, do you want them to face the burden of burying you after you are gone?

Have you left instructions for your spouse and/or heirs which specifically identify which assets to use for funding your funeral?

How much do you think it would cost for one of your loved ones to be laid to rest today?

Would your family know what to choose for your funeral, such as; what type of memorial service? Which church? Which funeral home or cemetery? Burial or cremation? Type of casket? Funeral flowers? Program guides? Who delivers the eulogy? Obituary details? More …