North Santa Rosa

Winning with AnnaLee

Protecting the Money Side of Your Final Plan

You’ve always been on the ball when it comes to money. You’ve been a good saver and investor. You’re the first one to plan for those milestone moments in life like birthdays, weddings, and anniversaries. When it comes to planning, you’re even the kind of person who looks far enough ahead to think about paying for your own funeral! “I don’t want my family to shoulder the cost of my funeral,” you tell yourself. “I’ll take care of it.”

Good thinking, but where do you start? What’s the best way to set money aside and know that it’s safe — and secure ­— to cover your funeral expenses?

Traditional Savings

You could set money aside in a “special” savings plan that you intend to cover the cost of your funeral. Unfortunately, a savings plan doesn’t necessarily mean your money will actually be used the way you wish. Do you know that many savings plans are subject to the demands of creditors such as hospitals or nursing homes?  A savings plan may actually work against you when considering asset levels to qualify for Medicaid. Also, any money you’ve set aside in a savings plan with your best intentions to cover funeral expenses isn’t protected from delays in probate.

Trust as an Option

One of the safest, most secure ways to set aside funds to cover funeral expenses is to combine the protection of a life insurance policy with the security of a Funeral Expense Trust. You may be thinking that trusts are for the wealthy, are complicated, and you need a lawyer to set them up. Guess again.  While some trusts can be complicated, a Funeral Expense Trust is different. It’s simple, easy and available today.

What is a Funeral Expense Trust?  A Funeral Expense Trust is an easy way for anyone — no matter what their financial picture is — to set aside money to cover the cost of their funeral. It’s a way for a person to make sure that the money they planned to set aside to cover funeral costs is there when it’s needed.

Here’s how it works. To set aside — and protect — funds to cover funeral expenses, an individual purchases a whole-life life insurance policy in the amount they think is needed. Skilled insurance professionals have worksheets available to help determine the amount you’ll probably need.  Ownership of the policy is then transferred to a trust.  This process is easy and provided with no direct cost to an individual. Policies up to $12,500 may be transferred to the trust. (Note: some states may limit the amount of money you may place in a Funeral Expense Trust. Check with your insurance professional for local details).

There are several benefits of transferring ownership of the policy to a Funeral Expense Trust. Among them: 1) The opportunity to exclude these assets to qualify for Medicaid and Supplemental Security Income, 2) Policy proceeds are paid to the trust, which in turn pays funeral costs. Any remaining funds are returned to the insured’s estate, 3) Funds you’ve intended to be used for your funeral are protected from creditors, 4) Avoids probate costs and delays.

As you prepare your financial plans for the future, a Funeral Expense Trust is an easy and effective way to make sure that the money you set aside to cover the cost of your funeral is safe, secure and there to ease the financial pressure on your family. A Funeral Expense Trust is a valuable tool when it comes to making sure your financial plans stay on track.

We believe that this approach is an important addition to legacy planning.  To learn more about how this option fits into your total financial and legacy plan, register for our upcoming Financial Survival for Retirement class scheduled for September 25 and October 2, 2012 at PSC Century Center. Click on this link to register.


Annalee Leonard, President

Mainstay Financial Group

2810 E. Cervantes St



Posted by on Sep 14 2012. Filed under Local, Top News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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