Keep Your Family’s Future Secure

Do you need a funeral trust?

On Behalf of | Jul 9, 2021 | Trust And Probate Administration

Anyone who has planned a funeral knows that there are many decisions that must be made while grieving the loss of a loved one. Questions about burial methods, funeral service components and more can be overwhelming. If your loved ones are not sure how to pay for your funeral, this can be an added burden. In Florida, it is possible for you to create a funeral trust as part of your estate planning. Before choosing to do so, however, it is important to understand how these trusts work.

What is a funeral trust?

A funeral trust is created through a funeral home or cemetery and is a pooled income fund that transfers property to cover your funeral costs. There are nursing homes that require a funeral trust before someone can be admitted. A funeral trust allows you to pre-pay your funeral and burial expenses to reduce the burden on loved ones. You can choose a revocable trust, allowing you to retain control of your assets and make changes to the contract, or you can choose an irrevocable trust that you cannot revoke and will not provide benefits until you die. The assets held in the trust will be used only in the event of your death.

How is a funeral trust funded?

You can fund a funeral trust in many different ways. One of the reasons many people decide to create a funeral trust is that it may allow you to exclude assets to qualify for Medicaid coverage, but that might only apply with an irrevocable trust. You can use cash, bonds or a life insurance policy to fund the trust. It is important to speak to an attorney when working on trust and probate administration to determine if a funeral trust is right for you.

What does a funeral trust cover?

A funeral trust is designed to cover your funeral expenses. The trust will pay for a funeral or memorial service as well as cremation, burial or entombment. The trust can be used to purchase a cremation urn or casket as well as pay for the cost of embalming. Flowers and music may also be covered under the trust as will transportation of the deceased from their home, a nursing home or hospital.

Before you agree to a funeral trust, it is important to speak to a financial advisor and an attorney. These professionals may help ensure that the trust will protect your loved ones from funeral costs and protect your assets as you planned.