Planning for your own death may not sound like a very pleasant task, but it is an important task. By taking the time now to plan for how you want your funeral service and burial to be handled, you can save your family members and loved ones a tremendous amount of anxiety and stress at a time when they will be grieving your loss. Along with creating a written funeral plan that you can include among your estate planning documents, you may wish to make formal funeral arrangements with a funeral home and arrange for pre-payment of your final expenses. This will also take the stress of figuring out how to pay for the service away from your loved ones. One way to accomplish all of your funeral plan goals is by creating a funeral trust.
A funeral trust allows you to make all the arrangements for both your service and your burial with the funeral home of your choice. You will also be making arrangements for the payment of all these services through the use of the trust. The funeral home will be the beneficiary of the trust. You can use any assets you want to fund the trust; however, many people choose to fund the trust with a life insurance policy. If you use a life insurance policy, the trust will be the beneficiary of the policy. Using a life insurance policy offers additional benefits such as the assets in the trust are not counted as resources for Medicaid purposes, and are usually protected from attachment by creditors.