Preplanning Services

People preplan their funerals or life celebrations to ensure their wishes are known and/or to pay in advance of their death so the financial burden isn't left to loved ones. Preplanning allows you to choose such details ranging from where you would like the service to take place all the way to which casket liner you prefer. Planning ahead eliminates potential debate and disagreements between family members when your time comes.

Prefunding a funeral eases stress for surviving family members immediately when faced with an impending funeral. In Minnesota, some counties may require individuals applying for medical assistance to prefund their funeral expenses - each county varies on the guidelines for this type of funding.  Under Minnesota law, there are two means typical for prefunding funeral goods and services:

1. Bank or Credit Union - funeral goods or services may be prefunded through a savings account or certificate of deposit. 100% of the funds must be deposited within 15 days when this method is used.  A 1099 statement showing accrued interest is issued to the beneficiary annually - the interest is considered taxable income of the person for whom the pre-arrangement is made. No administrative fees may be charged by the funeral provider.
2. Insurance Policy or Annuity - There are a number of forms of funeral insurance, from whole life policies to agreements that only cover actual expenses. Some policies include cash payouts for end-of-life medical bills and other expenses, while other policies lay out the specifics for the actual funeral. Depending on the type of insurance you buy, you may have either one lump-sum payment or monthly payments. Commission fees are allowed to be paid to the insurance agency or salesperson selling the policy.

When purchasing funeral insurance, funeral providers vary in their policy structure. Some guarantee their prefunded funeral goods and services rates will remain the same. Since inflation is difficult to gauge, many funeral homes will not offer a price guarantee - be sure to get a guarantee in writing if this is part of your agreement.

In Minnesota, a prefunded funeral arrangement may be transferred from one funeral home to another prior to or after the death occurs. Administrative fees may not be charged when a change is made, but certain elements of the agreement may not transfer. Always be sure you understand the terms of the policy, and weigh the costs against the policy coverage.

Preplanning your funeral or life celebration will eliminate some decision-making for your loved ones during a very difficult time.