It is a fact that 28% of American men and 22% of American women have never been married, and that 44% of childless adults under 50 say they're unlikely to ever have children. This is up from 37% just five years ago.
With the growing number of people who remain or end up single and have no living children, financial planners, including us here at Carnegie Investment Counsel, are fielding the question more from aging individuals: who can manage funeral arrangements for me?
The duty (or honor) to make funeral arrangements in such cases is strewn with issues not the least is the potential size of the bill, the timing of paying for services, and potential conflicting views among the deceased's remaining family and friends.
Individual state law governs who by default have final say about such arrangements. In Ohio for instance, there is a designated order based on kinship ties (and even a voting system if there are disputes). In some cases, a guardian or nursing home administrator can make the final arrangements if there is no close family. Your own wishes in all this may or may not be respected.
An additional problem that can arise is that a large deposit may be due at the time arrangements are made or in some cases full payment may be requested when services are rendered. With fewer people honoring their bills or paying in a reasonable period, the funeral industry is not as lenient as it once was.
Unfortunately, Carnegie and its employees, like most financial advisory firms, are not permitted by regulation to stand in and make these arrangements. We can help you with two solutions.
Like the health care power of attorney, most states have available a document that allows a person to designate another individual to manage the disposition of their remains. This form is available from most funeral homes and online. The form also allows you to provide details on your wishes that are required to be followed (for instance the choice between burial, cremation, or medical donation).
While this is closer to providing a meaningful solution, it is not ideal. It does not solve the issue of who pays the deposit for services (the speed of their reimbursement) and the time when the final bill gets paid. One solution to the payment issue is to set up a payable on death checking account to the appointed representative for the anticipated costs — although you need to make sure that the appointee will be around when the time comes.
The other solution is to outline your wishes and ask a reputable funeral home, burial society, or cremation society to provide you with burial contract and pre-pay them. You do not need to go into a funeral home to review every detail or have a director visit you with catalogs. This means what you want happens and you have not created a thankless task for someone else. Another positive is that you have locked in prices.
While this approach appears ideal, it does require understanding what security exists regarding the funds held by the funeral provider as well as some thought as to what happens if one relocates out of the area before it is used. Often prepaid funeral expenses are managed through burial trusts that may not be portable between states.
While there are some thought pieces about the financial pros and cons of prepaying last costs and making final arrangements, taking this task off others is a major non-financial gift.
State law sets a default order based on kinship ties. If there's no close family, a guardian or nursing home administrator may be able to make the final arrangements instead.
No. As an RIA, Carnegie and its employees are not permitted by regulation to stand in and make these arrangements, but we can help you set up solutions in advance.
Designate a representative to manage the disposition of your remains, or prepay through a reputable funeral home, burial society, or cremation society.
Designating a representative does not solve who pays the deposit or when the final bill gets paid on its own. Many people pair it with a payable on death checking account for the appointed representative or prepay through a funeral home.
For informational purposes only. The information is not intended to provide specific advice or recommendations, and all investments involve risks, including the loss of principal.
Carnegie Investment Counsel (“Carnegie”) is a registered investment adviser with the Securities and Exchange Commission. Registration as an investment adviser does not imply a certain level of skill or training. For a more detailed discussion about Carnegie’s investment advisory services and fees, please view our Form ADV and Form CRS by visiting: https://adviserinfo.sec.gov/firm/summary/150488.
You may also visit our website at: https://www.carnegieinvest.com.