A Complete Guide to Funeral Preplanning

Preplanning is not exclusive to burial, cremation, and other end-of-life arrangements. Just as we use prepaid plans for college tuition, retirement savings, and insurance, preplanning your funeral offers significant emotional and financial benefits for you and your loved ones.

Despite its advantages, many people avoid preplanning a funeral because it requires confronting the inevitability of death. However, taking proactive steps now can save your family emotional and economic distress later. This guide will walk you through everything you need to know about planning your own funeral, from understanding prepaid funeral expenses to choosing between burial and cremation.

Funeral Preplanning Glossary

Familiarizing yourself with common preplanning terms can make the process less intimidating:

Funeral Preplanning: This refers to arranging a funeral or end-of-life services in advance. It is sometimes referred to as: 

• Advance arrangements
• Advanced planning
• Prearrangements
• Prepaid arrangements 
• Future planning
• Pre-need arrangements
• Preplanned arrangements

Funeral Expenses: The costs associated with funeral services, including but not limited to casket, urn, memorial service, burial or cremation fees, and other related expenses.

End-of-life Wishes: Personal preferences regarding how your remains should be handled after death, the type of funeral or memorial service, and any specific requests for the disposition of remains.

Preneed Insurance/Prepaid Funeral Plans: Financial instruments or contracts designed to cover funeral expenses. This can include prepaying for specific services or purchasing insurance to cover future costs.

Preneed Insurance: A type of insurance that covers prepaid funeral expenses, ensuring funds are available when needed.

Prepaid Funeral Plans: This is a financial arrangement where you pay for funeral services beforehand, locking in today's prices.

Five Money-Saving Benefits of Funeral Preplanning

Funeral costs have risen in recent years. According to the National Funeral Directors Association’s (NFDA) 2023 Member General Price List Study, the median cost of a funeral with a casket and burial increased 5.8% over the past two years, from $7,848 to $8,300. Similarly, the median cost of a funeral with cremation, including an alternative cremation casket and urn, increased by 8.1%, from $5,810 to $6,280. 

1. Lock in Today's Prices

Preplanned funeral arrangements allow you to secure current prices for funeral goods and services, protecting you and your family from the impact of inflation. As funeral costs tend to rise over time, securing a prepaid funeral plan ensures you pay today's prices, potentially saving a significant amount in the long run.

2. Reduced Financial Burden on Loved Ones

Preplanning your funeral allows you to allocate funds specifically for the expenses associated with your end-of-life arrangements. This can alleviate the financial burden on your loved ones, sparing them the stress of covering unexpected costs and allowing them to focus on mourning and healing.

3. Avoid Emotional Spending 

Planning a funeral during a time of grief can lead to emotional decision-making and overspending. By preplanning the funeral, you make financial decisions in a calm and rational state, avoiding unnecessary expenses that might arise from emotional stress and urgency.

4. Flexible Payment Options

Many prepaid funeral plans offer installment payment options. By spreading the cost over time, you can manage your budget more effectively and avoid the financial strain that may occur if the expenses were to be paid all at once during a crisis.

5. Protect Against Fee Increases

Funeral costs may include fees subject to change, such as cemetery fees or administrative charges. By prepaying, you can often secure not only the prices of goods and services but also protect against potential future fee increases, providing an additional layer of financial security for you and your family.

How to Pay for Your Preplanned Funeral

There are several options for paying for your prepaid funeral expenses, each with its pros and cons:

• Life insurance: Offers broad financial protection but is generally the most expensive and may take weeks to pay out, making it less ideal for immediate funeral expenses.
• Burial insurance: This is explicitly for covering funeral expenses but often comes with waiting periods before full benefits are payable.
• Prepaid Funeral Plan: Locks in specific service prices but may lack flexibility if your preferences change.

It's important to carefully review each option's terms, coverage, and conditions to determine which best suits your needs and preferences. 

How Do You Make Your Preplanned Arrangements?

You can make preplanned funeral arrangements online, over the phone, in person, or combination. Reputable funeral homes and cremation providers have preplanning advisors with special training and certification, such as the NFDA Certified Preplanning Consultant (CPC) Program. These caring and compassionate professionals are a reliable source of information and usually offer free consultations.

Find a Provider

An excellent place to start is by researching funeral homes in your local area. Afterall can help you find a funeral provider near you, or you can ask friends, family, or colleagues for recommendations. 

Consider the reputation and reviews of funeral homes. Online reviews and ratings on platforms like the Better Business Bureau can provide insights into the experiences of other families.

Compare Services 

Evaluate the range of services offered by each funeral home. Some funeral homes may specialize in certain types of services or have expertise in cultural or religious practices.

Ensure the funeral home provides the specific services you require, such as traditional funerals, cremation services, or green burials.

Look at Prices

Under the Federal Trade Commission (FTC) Funeral Rule, funeral homes and cremation providers must provide a General Price List (GPL). This is a detailed price list of all the services and products offered, including basic fees, caskets, urns, transportation, and additional charges.

Consider Location

Consider the funeral home's location in relation to your home and the chosen burial or cremation site. Will it be convenient for your family to pay their respects? Do they have a perpetual care plan? Evaluate the funeral home and cemetery facilities regarding price, offered services, and accommodations for specific burial or interment requests. 

Ask About Payment Plans

You can often pay for prepaid arrangements over time. These payment plans are typically available with a three, five, or 10-year plan. Understand the terms and conditions of any preplanning agreements, including the flexibility to make changes if needed (such as paying it off early without penalty).

How Do You Choose Between Burial and Cremation?

Deciding between burial and cremation is deeply personal. Religious beliefs, environmental considerations, and costs often play a role. Cremation, for example, is typically more affordable, with a national rate of around 60% and expected to reach 80% by 2045.

Whether you choose burial or cremation, you can still incorporate traditional elements like visitations, funeral services, and cemetery placements. For a deeper comparison of the benefits and considerations of each option, check out our Cremation vs. Burial Guide.

What Is Not Included in a Prepaid Funeral?

While prepaid funeral plans cover many costs, they may not include everything. Items such as floral arrangements, obituary notices, or cemetery plot fees might not be included. Always review the contract to understand what is not included in a prepaid funeral and plan accordingly.

Are Prepaid Funeral Expenses Tax Deductible?

In general, prepaid funeral expenses are not tax-deductible for individuals. However, some states and circumstances may allow for exceptions, particularly if the costs are paid through irrevocable trusts. Consult a tax professional to determine what applies to your situation.

How Do You Know Your Prepaid Funeral Plans Are Safe?

Most states have strict requirements to safeguard prepaid plans, with state-regulated trusts to ensure your investment is protected. Prepaid funeral plans are highly regulated, and funeral homes must put your money in a state-regulated trust. Even if the funeral home where you made your future arrangements changes ownership or goes out of business, your plan is safe, with guarantees in place.

Steps to Finalize Your Preplanning

Ensure your loved ones are informed once your arrangements are made:

1. Provide a copy of your preplanning contract to your next of kin or attorney.
2. Store a copy with other important documents, such as your will and advance directives.
3. Regularly update your arrangements to reflect any changes in preferences or circumstances.. 

Final Document Checklist

1. Will: Clearly outline how you want your assets distributed and who will fulfill your wishes (executor).
2. Living Will (Advance Healthcare Directive): Specify your preferences for medical treatments and interventions if you cannot communicate.
3. Power of Attorney: Designate someone to make financial and legal decisions on your behalf if you cannot do so.
4. Healthcare Power of Attorney: Appoint someone to make medical decisions if you cannot make them yourself.
5. Financial Documents: Include information on bank accounts, investments, debts, and insurance policies.
6. Life Insurance Policies: Provide details on your policies, including beneficiaries and coverage.
7. Property Deeds and Titles: Include documents related to property ownership, such as deeds and vehicle titles.
8. Passwords and Access Codes: Create a list of essential passwords for digital accounts and devices.

Start Preplanning Today

Preplanning a funeral offers peace of mind and financial security for you and your family. By addressing these decisions now, you can save money, ensure your wishes are respected, and ease the burden on your loved ones.

If you would like to begin planning a prepaid funeral, Afterall is here to guide you through the process. You can also start looking for trusted funeral providers in your area and schedule a consultation with one of our certified advisors.