Skip to content

Advantages and Disadvantages of a Funeral Trust

As we begin to age, there are many significant decisions to consider. A funeral trust is one of many choices you should make in advance with the assistance of professionals and loved ones. A funeral trust is a contract you create with a provider of a funeral home or burial services.

Advantages

If you already have a funeral trust in place, any other relative or person, or the funeral home will be able to handle any arrangements you have when needed. This eases a burden for grieving families and friends since all the decisions have been made in advance. Another advantage is the possibility of increasing your potential eligibility to receive long-term care benefits through Medicaid–thanks to the Medicaid Funeral Trust. If the trust is funded with life insurance, you will also have no taxable income to report, as life insurance cash values grow tax deferred. Also by “locking in” to set prices early through the trust, you have already settled upon a mutually agreed upon price.

Disadvantages

If you are considering using a funeral trust, you should ensure that an independent trustee is in place in order to make sure that the funeral bill is reasonable and to pay out any excess to the family. You’ll also need to make sure that the proceeds in the trust will be an acceptable form of payment prior to naming the funeral home as a trustee or beneficiary. Additionally,  make sure all of your information is current, like your financial information, contact information, etc.  Similarly, if you happen to move,  make sure to change the trustee and beneficiary to the new funeral home. Remember to provide either your executor or all of your heirs with a copy of the trust along with any contact information you have for the funeral home and beneficiary (if different).

If you don’t, any income from assets in the trust could be taxed to you as the creator.

If you or someone you love needs assistance with Elder Care law issues, call 856-281-3131. Let us help ease your stress and give you a plan.

Latest Posts

What You need to Know when Reporting Nursing Home Abuse.

Reporting nursing home abuse is crucial to protect the well-being of vulnerable residents and hold perpetrators accountable for
Read More >

What Puts the Elderly Population at Risk for Abuse?

Several factors can put the elderly population at risk for abuse. Understanding these risk factors is essential for
Read More >

What is Funeral Home Negligence?

Funeral home negligence refers to situations where a funeral home fails to provide the expected level of care,
Read More >