How to pay for funeral arrangements.

[Anonymous]

Quick background: Mom is still alive but not in great health, possibly with only five years left due to dialysis and other issues. She had a term life insurance policy that lapsed about ten years ago, but she does have a decent-sized IRA of around $150,000 invested in a treasury bills mutual fund at Vanguard. We withdraw $15,000 from this, along with her social security, to cover her expenses. This situation got my wheels turning. I recently completed her required minimum distribution (RMD) and received the check today, nearly three weeks later. My plan was always to use her IRA for funeral costs. But 3weeks!?!?

I’m considering withdrawing an additional 15-$20,000 today and placing it in her bank account. (Don’t like that idea) because she writes checks to all sort of nonsense and sends money to ppl at her church. Which is why I keep her account around $1,500 max.

Or can I buy a 15-20k whole life policy. Just as a holding place? Basically I need to hide 15-20k and it needs to be easy to get once that day comes. Safe deposit box??

[Anonymous]

She can go ahead and make the arrangements she would like and pre-pay. That’s what my grandfather did. It was so helpful to my father and aunts - they knew that everything was arranged the way Grandpa wanted, and payment was already taken care of.

[Anonymous]

Why not pre-pay her funeral costs? That also means she can make decisions while she's still able to about what kind of "handling" she'd like (cremation or burial, etc). You can also purchase the cemetery plot now. In our case, we purchased the ones next to the ones for my parents also, so we can be buried there when the time comes.

[Anonymous]

1. It is not your money
2. It is not your money.

[Anonymous]

You can do a budget cremation for around $1k. It’s absurd to blow $15k-$20k on a funeral.

[Anonymous]

I would think funeral home would just need a deposit then pay balance within 30 days. I would call and ask. I would be careful about taking that money out now because you will bump up how much she owes in taxes.

[Anonymous]

Everyone I know prepays their funeral costs. Since you only said mom, would she be buried next to your dad or near her parents?

But yes, I personally wouldn't spend 10-15k on a funeral. Rent out a room at a restaurant and have a memorial dinner instead. While I do enjoy graveside services, I do not like wakes or anything else at the funeral home. They just seem like a waste.

[Anonymous]

You could put the funds in a high yield savings account or a brokerage account (like Schwab, Fidelity, etc) where there isn’t a checking account attached or ATM withdrawal. She should set it up to “Transfer on Death” (TOD) to the person that will be the executor of her estate. This setup will give the executor immediate access to funds to cover funeral expenses without waiting on probate. She could set up ALL her accounts this way to avoid probate completely. This is how my MIL set up her accounts and it simplified settling her estate immensely.

[Anonymous]

I’d just charge it and then pay off my CC once I got the money.

[Anonymous]

Not you money but you go to a funeral home and make the arrangements.

[Anonymous]

Anonymous wrote:I would think funeral home would just need a deposit then pay balance within 30 days. I would call and ask. I would be careful about taking that money out now because you will bump up how much she owes in taxes.

I have buried both of my parents (different funeral home). Both required payment in full up front.

[Anonymous]

I don’t hint a whole life policy on a sick elderly person will be affordable.

[Anonymous]

Not OP, but always wondered, what happens if you pre-pay for cremation and the place goes out of business? wouldn't you be out of luck.

[Anonymous]

Once she dies, you no longer have power of attorney. The estate executor has control. I would prepay.

[Anonymous]

Anonymous wrote:I’d just charge it and then pay off my CC once I got the money.

Same.

My aunt had me on one of her checking accounts so I could immediately access the money and pay for her services.