If you want to plan in advance for your own funeral so that your family does not have to make the arrangements, one of the questions to consider is whether or not you should also pay in advance. The answer might depend on your expected Medicaid needs.
In general, it is a good idea to pre-plan your own funeral. This allows you to determine where and how your remains will be handled. It also removes a potential burden for your family, when they will be in mourning over you.
Funeral homes offer many different types of pre-planning packages that include various levels of services. You can often even transfer a plan between funeral homes, if necessary.
If you do pre-plan your funeral, you’ll need to decide whether to pay for everything now to lock in the price. Whether that is a good idea might depend on Medicaid, as The New York Times reports in “Want to Plan for Your Death and Funeral? Here’s How.”
When you pay the funeral home in advance, you are essentially giving it a free savings account. The funeral home can save the money and earn interest on it. If you do not anticipate passing away anytime soon, you would be better off saving that same amount of money and earning interest on it yourself.
However, if you anticipate needing Medicaid to pay for long-term nursing home care, paying in advance for funeral services can be a good way to lower your assets, if done correctly. Any questions about whether paying in advance is a good idea, should consult with an elder law attorney.
Reference: New York Times (Feb. 20, 2018) “Want to Plan for Your Death and Funeral? Here’s How.”