Planning for their parents’ end-of-life expenses is about the last thing most adult children want to deal with. At least not right now.
A traditional funeral with end-of-life services with extras like flowers, obituary notices, acknowledgment cards and limousines can bring the total to $15,000 or more. Families often overspend on a funeral or burial because they think of it as a reflection of their feelings for the deceased.
Recently, I heard from one of my EC readers, responding to a previous column. She brought up an important topic, one that is not an easy to address. So let’s gather into a huddle, wrap our arms around one another and take a collective deep breath.
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Dear Cheapskate: My comment is in response to “Where to Keep Money for Mom?” and Bonita in South Dakota, who was looking for input on how to invest $10,000 for her 62-year-old mother who has no savings, no life insurance and lives on disability.
I would recommend they go to any funeral home and work with the person there who handles prepaid funerals. Essentially, you are purchasing an insurance policy to cover the funeral costs.
We did this for my dad before he moved into a long-term care facility, which was going to drain his remaining assets to $0. A prepaid funeral policy is excluded from the asset base, is protected once the assets are gone and a person goes on medical assistance.
With all the other drama that comes with aging parents, it is nice for my sister and me to know that the end is covered and won’t create another drain/strain on everything. — Molly
Dear Molly: Thanks for this wise advice. In fact, many elder law attorneys advise prepayment as a way to invest in assets that will not be countable by Medicaid or SSI.
However, I want my readers to know that there are pitfalls on the road to prepaid end-of-life arrangements, which they need to know about in order to avoid falling into them. Buyers beware.
Consumers…
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