couple completing funeral trust

2020 Guide to Funeral Trusts

Funeral Trusts

Securing a funeral trust is a good idea for anyone who is looking to relieve their family members of burial and funeral costs after they have passed. Putting together a funeral trust is one of the many family benefits of pre-planning your funeral.

Here at The Gardens of Boca Raton & Boca Raton Funeral Home, we understand the sensitivity of such matters and take every step possible to help you feel comfortable and at peace with your decisions throughout the pre-planning process.

Whether you are looking to pre-fund funeral expenses or create a plan for your final resting place, our team of professionals is here to help you each step of the way.

An essential part of the process is putting together a funeral trust. We know the need for support and guidance when it comes to these matters and strive to provide as much information and education as possible regarding aspects of pre-planning a funeral.

What Is a Funeral Trust?

A funeral trust is a way of prepaying for burial or cremation with a funeral home or cemetery. We offer this option as part of our pre-planning services at The Gardens of Boca Raton. The benefits of creating such a trust ensure that once you pass, your family members will not be left with the burden of securing payment. Funeral trusts help take the pressure off of loved ones during such a difficult time.

Additionally, putting together a funeral trust often ensures that you will secure the lowest prices possible in advance. It is less expensive to preplan a funeral than to plan a burial in immediate need.

How to Fund a Funeral Trust

Funeral trusts may be funded in a variety of ways, and we understand the importance of having flexible options available to you. Funding can be arranged through cash, bonds, and it may be possible to secure a funeral trust through your life insurance policy.

Speak with your insurance broker to see if your plan allows this option. If not, see if it is possible to change your plan if putting together a funeral trust backed by your life insurance policy is the route you would like to go.

Our team of preplanning experts will help walk you through the process to determine which payment option is best for you.

Who Controls My Funeral Trust?

A funeral trust is a way of securing payment with an institution, so the funeral home or burial provider will act as the trustee. They are declared the beneficiary when the trust is secured.

What this means is that once you have passed, they will manage the assets in your trust, ensuring that they are distributed to cover the necessary costs. There are various types of funeral trusts, and we encourage you to select the option that best meets your needs.

Different Types of Funeral Trusts

There are two types of funeral trusts: irrevocable funeral trusts and revocable funeral trusts. There are differences, pros, and cons between the two.

Irrevocable Funeral Trusts

A life insurance policy most commonly funds an irrevocable funeral trust. They are offered as a purchase option at the time you choose your plan or can be added at a later time if you alter your policy.

With an irrevocable trust, the terms cannot be changed once they are agreed upon without the consent of the trustee or beneficiary. In the case of funeral trusts, that is the funeral home or burial provider that you have selected. Irrevocable trusts move your assets out of your estate, meaning that they cannot be taxed and that the money cannot be taken from you in the event of a lawsuit.

Irrevocable Funeral Trusts and Medicare

A significant benefit for creating an irrevocable funeral trust is that since the money is no longer considered part of your estate, it is not deemed to be part of your assets. Therefore, Medicare cannot consider this money when determining your eligibility for benefits.

When Not to Purchase an Irrevocable Funeral Trust

The main thing to consider when purchasing a funeral trust is the likelihood of whether or not the money entered into the trust will need to be moved or utilized for another purpose in the future. Once you enter into an irrevocable trust, the terms cannot be changed. What this means is that you cannot change the purpose of the trust or decide to dissolve it.

If you believe you may have to take money from funeral preplanning trust, do not create an irrevocable funeral trust. It is also best not to create an irrevocable trust if you are not trying to qualify for Medicare.

Revocable Funeral Trusts

A revocable funeral trust is another form of pre-funding that may be a better option based on your circumstances. If the money you are setting aside may need to be reallocated, a revocable funeral trust is a safer way to go.

Revocable funeral trusts can be altered or revoked at any time, and you will not be penalized. If you do choose to dissolve the trust, the assets will be considered yours.

What Expenses Do Funeral Trusts Cover?

Knowing what a funeral trust does and does not pay for is extremely important. A funeral trust can cover most, if not all, of the expenses associated with both a service and burial. Additionally, it may be able to cover travel for family members to attend a funeral. Covering travel expenses can be especially important if your loved ones live far away.

Funeral trusts may cover the following expenses:

  • A funeral or memorial service and the payment of staff
  • Burial, entombment, or cremation
  • Caskets or cremation urns
  • Embalming
  • Transport of the deceased
  • Funeral costs such as flowers or music

Florida State Regulations Regarding Funeral Trusts

Each state has its own laws and regulations regarding funeral trusts. Florida has specific rules, including the maximum amount that can be contributed to a funeral trust. The full legislation can be found under Chapter 497, Funeral, Cemetery, and Consumer Services of the Florida Statutes.

There may be administration fees associated with creating a funeral trust, based on whether you choose to create one with the help of a lawyer, bank, or insurance company.

States also limit the amount of money that you can put into a funeral trust. It is common for states to cap the amount at $15,000, as is the case in Florida. Other states may have lower caps. However, if you are putting together preplans for yourself and your spouse, that amount can be doubled as long as you create two separate trusts, each in your own name.

Preplanning and Prefunding Funeral Costs at The Gardens

At The Gardens of Boca Raton, we offer private consultations for preplanning services. We get to know your needs and help create a personalized package based on your wishes. We seek to help you achieve peace of mind, uphold your wishes, and save as much as 25% on funeral costs through preplanning.

We also offer an online planning guide, titled The Basics of Funeral & Cemetery Planning Guide. With the help of this guide, you can begin to research the process at home if you would prefer.

Our family-run team of professionals is available at any time to answer any questions you have and to guide you through the funeral preplanning process.

Contact us today to schedule a consultation or tour of The Gardens of Boca Raton.