The Bottom LineFunerals can be expensive—or they can be reasonably priced. The question is, "How can families honor their loved one with authenticity and dignity, regardless of budget?" Family-led funerals using products already available in the home, plus research to find the best price for what you truly want, all add up to prudent spending and a meaningful final exit.
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Social Security Benefits
The family, designated agent, or funeral director must file to receive Social Security death benefits of $255. To obtain Social Security Administration information, go to Social Security. Check out Funeralwise for more info on Social Security and VA benefits.
Military and Veterans Benefits
Contact the Department of Veterans Affairs for information on benefits. Among other things, you may be entitled to a U.S. flag from the Post Office, to be used at a memorial service, by presenting a certified copy of the death certificate and proof of military service. You may also qualify for a free gravesite in a VA cemetery. Toll-free: 800-827-1000. Veteran's death benefits may include the following. Contact the VA to learn if you qualify for:
- a $300 burial expense reimbursement.
- a $300 burial plot assistance payment for burials not in VA cemeteries.
- a $2000 active duty or service-connected death benefit.
- a travel allowance.
Trusts, Insurance, and Bank Accounts
Funeral Director's Trust
When using a funeral home, you may be offered the opportunity to prepay into what is called a Funeral Director’s Trust. Be aware that the money held there is not transferrable or refundable. It may be sold multiple times over its shelf life, held and bought by other funds. The Funeral Consumers Alliance warns consumers not to prepay in long-term circumstances for this and several other reasons, including the possibility that they may go out of business, and there will be no remedy for recovering your funds.
Burial Insurance
Burial insurance policies are usually offered by life insurance companies in the form of term or whole life policies. Upon death, the company pays out the full amount directly to your beneficiary, and he or she can spend it any way they choose, perhaps to pay medical or legal bills—or something entirely different. If you pay for a $20,000 funeral and your family chooses a $2000 cremation, you can see the potential situation. Some burial insurance policies have been known to lose value over time as well and are nonrefundable should you change your mind at any time. The upside is that money paid for insurance premiums is considered a Medicaid-protected asset.
Preneed Insurance
Preneed insurance is similar in some ways to burial insurance, in that it is a policy that will pay out upon death for funeral expenses, merchandise, cremations and burials, and all that entails. It may be a good protection against inflation if you hold the policy long enough, as it locks in the price at the moment. However, instead of going to your family, the beneficiary is usually made payable to the funeral home, and you will have to trust that the terms of your agreement are met. It is also a Medicaid-protected asset.
Payable on Death (POD) Bank Account
Perhaps the most sensible approach is a good old-fashioned bank account, designated as a payable on death account, set up with funds of your choosing that may earn a modest interest over time. Your next-of-kin or Durable Power for Finance will have easy access to the money immediately, and you can update your wishes any time directly with him or her. The only downside is that the money is not Medicaid-protected and the designated beneficiary is not legally obligated to use this money as you have directed. They receive this money outright, so make sure they understand your intention for these funds and will honor them.
When using a funeral home, you may be offered the opportunity to prepay into what is called a Funeral Director’s Trust. Be aware that the money held there is not transferrable or refundable. It may be sold multiple times over its shelf life, held and bought by other funds. The Funeral Consumers Alliance warns consumers not to prepay in long-term circumstances for this and several other reasons, including the possibility that they may go out of business, and there will be no remedy for recovering your funds.
Burial Insurance
Burial insurance policies are usually offered by life insurance companies in the form of term or whole life policies. Upon death, the company pays out the full amount directly to your beneficiary, and he or she can spend it any way they choose, perhaps to pay medical or legal bills—or something entirely different. If you pay for a $20,000 funeral and your family chooses a $2000 cremation, you can see the potential situation. Some burial insurance policies have been known to lose value over time as well and are nonrefundable should you change your mind at any time. The upside is that money paid for insurance premiums is considered a Medicaid-protected asset.
Preneed Insurance
Preneed insurance is similar in some ways to burial insurance, in that it is a policy that will pay out upon death for funeral expenses, merchandise, cremations and burials, and all that entails. It may be a good protection against inflation if you hold the policy long enough, as it locks in the price at the moment. However, instead of going to your family, the beneficiary is usually made payable to the funeral home, and you will have to trust that the terms of your agreement are met. It is also a Medicaid-protected asset.
Payable on Death (POD) Bank Account
Perhaps the most sensible approach is a good old-fashioned bank account, designated as a payable on death account, set up with funds of your choosing that may earn a modest interest over time. Your next-of-kin or Durable Power for Finance will have easy access to the money immediately, and you can update your wishes any time directly with him or her. The only downside is that the money is not Medicaid-protected and the designated beneficiary is not legally obligated to use this money as you have directed. They receive this money outright, so make sure they understand your intention for these funds and will honor them.
Public Assistance
- The State of Oregon does not have a “burial assistance” fund. Members of the public often confuse the Oregon Indigent Disposition Program (IDP) with “burial assistance.” The IDP fund is designed to provide a small partial reimbursement to funeral homes that take care of individuals who have died and either have no one to take care of their final expenses or whose family members refuse or are unable to take financial responsibility for the care of their loved one. Members of the public cannot apply to this fund - by law it may only be used to offset the costs that a funeral home incurs when taking care of indigent deaths.
- Paying for Funeral Costs in Oregon
- Paying for Funeral Costs in Oregon (Large Print Version)
- Information on the Indigent Disposition Program for Hospice and Hospital Employees, Social Workers, and Other Community Workers
- Public Assistance for Funeral Expenses
A Word About Nonprofit Charity and Crowdsourcing
- Many nonprofits that provide consumer information and education receive calls frequently asking for money to help pay for a funeral. Three things to remember before making that call: 1) not all nonprofits are charitable foundations; 2) failure to plan for a funeral does not make it someone else's financial responsibility; and 3) educational websites like this one endeavor to assist families to find ways to consume less, reducing unnecessary costs.
- Another means of raising money for a funeral is crowdsourcing on social media. This started out working well but, more and more, people are becoming weary—and leery—of being asked for money online. Perhaps it's time to bring back the old custom of offering money discreetly to the widow/er to help defray costs, or to “pass the hat” within a community so that mourners may contribute as they choose.
Resources and Online Links
FCA How to Read a Funeral Home Price List
FCA Indigent Burial Funds by State
FCA How to Pay For a Funeral
FCA Ten Tips for Saving Funeral Dollars
FCA Four-Step Funeral Planning
FCA Indigent Burial Funds by State
FCA How to Pay For a Funeral
FCA Ten Tips for Saving Funeral Dollars
FCA Four-Step Funeral Planning
FCA = Funeral Consumer Alliance
GBC = Green Burial Council
NEDA = National End-of-Life Doula Alliance
NHFA = National Home Funeral Alliance
GBC = Green Burial Council
NEDA = National End-of-Life Doula Alliance
NHFA = National Home Funeral Alliance
