Episode 89 – To Pre-Pay for Your Funeral or Not

Funeral talk feel taboo? Here’s why it shouldn’t be.

It might not be an easy subject to discuss, but it is an extremely important one.

Planning or even pre-paying for your funeral in advance can provide your family the support they need in a time of grief.

Making your wishes clear AND putting aside the finances to back it up is truly a gift for your family.

The question is: What do you need to do to start planning, and when is the right time to prepay?

You can find the answers to those questions in the latest podcast episode.

Show Notes:

Hey there, welcome back to the Heart of Your Money podcast. Planning a funeral in advance can save your loved ones a lot of pain, but is prepaying a good idea? This is what I want to talk about today. 

Now, some people have a really hard time talking about death and never mind the planning of our own death. Now, I wonder is that because of being afraid of having difficult conversations might hurt someone’s feelings? Are we afraid of stirring up emotions that might make someone uncomfortable? Or is it because we think we’re immortal? 

I don’t know. I’m not sure, and especially harder for me to understand because I’m the type of person that overshares and maybe I’m just a bit bossy, so I want to tell people what to do even when I die. I would like things done the way I want. I’m Aries, blame it on whatever reason, but it makes me feel better. 

Now, I know that’s not for everybody but I can’t shout this from the rooftop any louder. It’s an absolute gift for your family to share these things and have a conversation about how you’d like to be remembered, what your wishes are, all the what ifs. I’ve been witness to two things that as we’re talking right now, it just stands out in my mind. 

And the first was an unexpected death where there was absolutely no discussion, no pre-planning, and no acknowledgment of this person’s wishes and how they would want to have a funeral. The planning was torturous during the grief. I was right there and family hosting that no one could imagine if there’s a couple, there’s generally then in-laws and then your own family and everyone’s trying to come together and do the right thing. 

In this case that I remember, no one could agree, and the overwhelm was in full force. We’re not at our best in those times, and so it’s not a judgment on anybody. I would’ve been exactly the same. Stress overload. Now on the flip side, my second memory is one of bittersweet. 

The family had known where the family folder was, things were written down. They had talked about it, not because they knew that there was going to be an upcoming death, but there was just the what if conversations. It felt like it was a healthy conversation that had happened over time and then writing things down. 

I feel like it was like that checkbox of, we’re grown up, let’s talk about these things. Write it down and you check that box off, and then you put it up on the shelf and you forget about it. This was a time that it was needed. There was no family feud, no hard decisions had to be made in a cloud of sorrow. Everything had been thought about and preplanned. So it was almost like following this checklist and not having to make hard decisions. I’d choose that one. So this shouldn’t be a taboo subject. 

Now there is a difference between pre-planning your funeral and pre-paying for your funeral, and that’s what I’m gonna talk a little bit about today. I’m going to give you a few things to think about if you’re pre-paying for a funeral and it’s not a bad idea, but I definitely have my own checklist and some questions that you need to know and whether or not it applies to you. 

Let me share a little bit about this prepaying. In most cases, prepayment for funeral plans happen directly with that specific individual funeral home. The arrangements are made in advance and you pay upfront. Then that idea is that all your family has to do is contact the funeral home. Everything has been taken care of.

I remember a couple of years ago I did read an article in the Globe in Mail, and so the things that stuck with me, and it was an article published about why you should prepay and they had some really good points. Inflation creeps in each year, and funerals can get more and more expensive, but if you prepay, the service is purchased at that current cost.

So it’s like you’re locking in that price and then there is another point that I remember and stuck with me, and I also agree at the point that sometimes estate access to money after a person dies can take a bit of time, and generally funerals happen right away and then they need to be paid for right away trust me, being on the receiving end with someone seeing that the bill came, like literally right after the funeral and seeing the known number of zeros behind that. So that’s one reason why it’s a bonus to prepay. 

It’s already been taken care of. So if you’re, one of the executors or you’re in the family and trying to figure out, sometimes bank accounts over 25,000 will be locked and all these things and so if you have to pay for it right away, it’s done and taken care of. It’s a very thoughtful gift to your family. 

This is where I need to share a few things. So let me share a few things beforehand. This is your checklist and questions to ask:

Make sure you read the contract and all the fine print. Are there going to be any additional payments or final funding required? What if you change your mind? Can you get your money back? 

I know that sounds odd, but what if some circumstance in your life changes and you decide, or you want to change a piece of the service or you want to change the location, something like that. Can you get your money? And if prices increase over time, does the family have to pay that difference? So just making sure that you’ve locked in. There’s no additional costs or fees that will happen. Most likely the prepaid option is for that specific funeral home local to your city and area. 

Question. I don’t know this answer because I don’t know in depth enough, but it’s something that came up in my mind: Is it transferable to another funeral home or a different location? I see people that move and relocate in retirement or they want to move somewhere different to be with family, or they’ve created a community somewhere else and then they decide to move. Are you okay with your funeral home and location that you picked and prepaid at? Is it still the place you want to be? 

Also the most important one. This one I can’t stress enough, and this is the one that comes up most often in my office sitting across from people because we want to take care of things. We’re doing all the great pre-planning. And the question: Is it too early to prepay? It’s never too early to pre-plan, but exchanging money and signing a contract is too soon if you’re in your forties or fifties. And I say that because it could be 30 years before you die, hopefully longer. 

I’m not giving that timeline, but it could be longer. Think about that 30 years of that funeral home, holding onto your money, locking you into a contract. Will they even be around in 30 years? What if they fold or they’re bought out, or will you still want to be at that location for a funeral if you have that much time? A lot can happen in that time change. That’s the most common one is sitting across from people. We are doing all the right things.  We’re doing all the financial planning. We’re taking care of the what ifs. We’ve got all the estate planning, but you’re only in your forties and fifties. And yes, I think prepaying is the way to go, but we need to wait a little while because it’s too soon. Right now, a lot can happen in that time. 

The alternative option in this timeframe if you’re too young, is to pre-plan, not necessarily pre-pay. You could have everything mapped out and make a savings bucket available specific for your wishes, or, classic financial planning 101 textbook would be you have a portion of a life insurance policy and a portion of it is directly for payment of your funeral. 

Let me remind you of the ease of pre-planning. If it feels overwhelming, we have a section in our family, CEO, where you write down your wishes. It’s where you’ve gathered all your information, and then at the back of that, it’s got questions on top of your specific wishes, also how you’d like to be remembered so you can do this pre-planning.

Now if you’re much older, settled in your location, and have done your due diligence in finding a reputable funeral home, you’ve read all the fine print, you’ve asked all the hard questions, then yes, prepaying is the way to go. 

That’s it. If you have any questions, send me a note. Check our website, astrafinancial.ca for show notes, or send me a note with any questions or comments. I’d love to hear from you. Till next time, I’m Zena.