Everyone should have an estate plan, whether it’s a simple will or a detailed and complex one with trusts and strategies for multiple generations. The more care and thought put into the plan, says a recent article, “5 Common Estate Planning Mistakes to Avoid” from Kiplinger, the better the outcome. There are some common mistakes you can avoid with a little foreknowledge.

Failing to plan for incapacity. People think about creating wills and trusts with their mortality in mind. However, incapacity planning is just as important, in some cases, more important, than death. A good estate plan identifies the people authorized to make important decisions on your behalf concerning finances, health care and other important issues. It also empowers them to do so with powers of attorney. Once you are unconscious or otherwise incapacitated, you can no longer legally assign someone else to act on your behalf. Preparing for others to make decisions for you should not be overlooked.

Neglecting funeral and burial wishes. If you were kind enough to purchase a burial plot and make funeral plans, don’t make your children have to conduct a scavenger hunt. Talk with them about it and tell them where they can find the deed to your plot and the contract with the funeral home. Name a point person who will be in charge of the funeral and burial arrangements and make sure they know your wishes. If you want to be cremated, make it clear to loved ones. The more information you share before your death, the more likely your wishes will be followed.

Not considering the tax implications of transferring property. Don’t leave your loved ones a huge tax bill. It may seem generous to gift property to heirs during your lifetime. However, in many instances, giving when you have passed will create a far smaller tax burden. If your estate planning attorney also understands taxes, he or she can work with you to determine how to minimize taxes and maximize your gifts.

Name back-ups for key decision makers. The unthinkable happens. Spouses perish in the same accidents. If no secondary beneficiary has been named, who inherits the estate? Name additional and alternative beneficiaries in case of unfortunate occurrences. You should name a backup executor, financial power of attorney and health care agent. If a person named in your estate documents cannot fulfill their role because of death, incapacity or other reason, the court will name substitutes.

Forgetting to clarify and update beneficiary designations. If your will says you want all of your children to get an equal share of your estate, but one child is on a joint investment account and another is on a Payable Upon Death checking account, you’ve created potential disputes. It’s important to list out the beneficiaries, their asset shares and create a directive to your bank to set the interests in your accounts upon your death. Your bank may require you to change how accounts are titled to achieve your goals. Therefore, you should take care of this while you are living, so you can make any needed changes.

BOOK A CALL with me, Ted Vicknair, Louisiana Board Certified Estate Planning and Administration Specialist, Louisiana Board Certified Tax Law Specialist, and Louisiana CPA to learn more about estate planning in Louisiana, incapacity planning, and Louisiana asset protection.

If you liked this article, “Top Five Estate Planning Mistakes” read also these additional articles: What Do You Need to Do When a Spouse Dies? and What If Estate Is Beneficiary of an IRA? and Will Making a Gift Conflict with Medicaid? and Does a Beneficiary have to Pay Taxes on 401(k)?

Reference: Kiplinger (Oct. 20, 2022) “5 Common Estate Planning Mistakes to Avoid”

The median national funeral with a viewing and burial runs about $7,500, and the average funeral costs soar past $9,000 when you include a vault. However, cremation averages just $350 because most funeral homes can do this in-house.

Bankrate’s recent article entitled “Average funeral cost” says, whether you’re planning for your own funeral in advance to relieve your family’s costs or for someone else’s, understanding the costs of a funeral and potentially how to cut them can make the process a little easier. Note that there are a number of fees for a funeral:

• Basic service fee: a standard service fee that covers the cost of planning fees, including any permit and administrative fees.
• Service and merchandise fees: this is for things like transporting, preparing and embalming the body, as well as funeral home fees for the viewing or memorial and any equipment or services required for the graveside service. There’s also the casket or burial container or the required services needed for cremation or interment.
• Cash advances: some services that a funeral may handle for you, such as funeral flowers, clergy and musicians. You may pay an added service fee or marked-up prices to account for the funeral home’s efforts, the extra fees must be disclosed to you in writing.

The average casket costs about $2,000, but premium caskets of mahogany and other wood cost as much as $10,000. Some buyers purchase a casket independently to avoid third-party markups.  However, you’ll have to ship the casket to the funeral home. If you choose cremation, you can avoid the cost of a casket.

Here are some of the average costs you may incur for a funeral, according to the National Funeral Directors Association (NFDA):

• Funeral service fee: $2,100
• Funeral home rental: $500
• Funeral home staff: $500
• Vault: $1,395
• Cremation casket: $1,000
• Embalming: $725
• Urn: $275
• Cosmetic services: $250
• Hearse: $325
• Transportation: $325
• Transportation for the family: $150
• Pamphlets and materials: $160

In short, know exactly what you are buying in advance.

That may be the best argument for pre-planning and pre-paying.

BOOK A CALL with me, Ted Vicknair, Louisiana Board Certified Estate Planning and Administration Specialist, Louisiana Board Certified Tax Law Specialist, and Louisiana CPA to learn more about estate planning in Louisiana, incapacity planning, and Louisiana asset protection.

If you liked this article, “What Does a Funeral Cost These Days?” read also these additional articles: Will Drinking Milk Prevent Dementia? and What are Mistakes to Avoid with Beneficiary Designations? and Are Testamentary Trusts a Good Idea? and IRS Extends Time to File Portability Exemption Relief to Five Years

Reference: Bankrate (July 12, 2021) “Average funeral cost”

Burial insurance—also called end-of-life insurance, final expense, or funeral insurance—is a whole life insurance policy that’s designed to pay for the costs of your burial. These costs may include a memorial service, cremation costs, a headstone for your grave or other expenses associated with end-of-life arrangements.

Bankrate’s recent article entitled “Burial insurance” explains that if you have your affairs in order, your family already knows what will happen when you die. You may have given instructions for how you’d like your body to be treated, as well as ideas for your memorial service or what you want written on a tombstone.

However, all of these things cost money. If you don’t want your family to be stuck paying those costs, you may want to consider a burial policy.

Because the payout for burial insurance is small compared to many regular life insurance policies, the premiums can also be quite affordable. The policies are easy to purchase and don’t require a medical exam. However, there may be a waiting period and the policy may offer only limited benefits in the first two years.

Burial insurance policies cover all the normal costs incurred by someone’s death, such as:

• Embalming
• A casket
• Flowers
• Cremation costs
• A burial plot
• The cost of transporting the body and/or remains
• A headstone; and
• Payment to clergy.

One type of burial policy, called a guaranteed issue life insurance policy, is available without any medical or health questions. It’s designed for those who are seriously ill and can’t get a policy any other way. Additionally, a burial policy is an exempt asset for purposes of Medicaid long term care.  In other words, the policy would not be counted as an “available resource” for Medicaid purposes.

If all the appropriate arrangements have been made, the process of filing a burial insurance claim should be fairly smooth.

BOOK A CALL with me, Ted Vicknair, Louisiana Board Certified Estate Planning and Administration Specialist, Louisiana Board Certified Tax Law Specialist, and Louisiana CPA to learn more about estate planning in Louisiana, incapacity planning, and Louisiana asset protection.

If you liked this article, “What Should I Know about Burial Insurance?” read also these additional articles: Does Potential IRS Change Have an Impact on Estate Plan? and Understanding the Issues of Elder Law and What are the Advantages of a Business Trust? and What Is the Best Asset Protection?

Reference: Bankrate (March 5, 2021) “Burial insurance”

People usually don’t buy funeral services frequently, so they’re unfamiliar with the process. Add to this the fact that they’re typically bereaved and stressed, which can affect decision-making, explains Joshua Slocum, executive director of the Funeral Consumers Alliance, an advocacy group. In addition, people tend to associate their love for the dead person with the amount of money they spend on the funeral, says The Seattle Times’ recent article entitled “When shopping for funeral services, be wary.”

“Grieving people really are the perfect customer to upsell,” Slocum said.

The digital age has also made it easier to contact grieving customers. Federal authorities recently charged the operator of two online cremation brokerages of fraud. The operator misled clients and even withheld remains to force bereaved families to pay inflated prices.

The Justice Department, on behalf of the Federal Trade Commission, sued Funeral & Cremation Group of North America and Legacy Cremation Services, which operates under several names and the companies’ principal, Anthony Joseph Damiano. The companies, according to a civil complaint, sell their funeral services through the websites Legacy Cremation Services and Heritage Cremation Provider.

These companies pretend to be local funeral homes offering low-cost cremation services. Their websites use search engines that make it look like consumers are dealing with a nearby business. However, they really act as middlemen, offering services and setting prices with customers, then arranging with unaffiliated funeral homes to perform cremations.

The lawsuit complaint says these companies offered lower prices for cremation services than they ultimately required customers to pay and arranged services at locations that were farther than advertised, forcing customers to travel long distances for viewings and to obtain remains.

“In some instances when consumers contest defendants’ charges,” the complaint said, the companies “threaten not to return or actually refuse to return” remains until customers pay up.

Mr. Slocum of the Funeral Consumers Alliance recommends contacting several providers — in advance, if possible, so you can look at the options without pressure. And ask for the location of the cremation center and request a visit. Also note that cremation sites in the U.S. are frequently not located in the same place as the funeral home and may not be designed for consumer tours.

Note that the FTC’s Funeral Rule predates the internet and doesn’t require online price disclosure. Likewise, most states don’t require this either.

Last year during the pandemic, the government issued a warning about fraud related to the funeral benefits. They said FEMA had reports of people receiving calls from strangers offering to help them “register” for benefits.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “What Should I Know About Buying Funeral Services?” read also these additional articles: Medicaid’s “Snapshot” Date and Its Crucial Impact on a Couple’s Financial Picture and Claiming Social Security Benefits at Age 70 and Does a Supplemental Needs Trust have an Impact on Government Benefits? and What Games Keep My Mind Sharp as I Age?

Reference: Seattle Times (May 15, 2022) “When shopping for funeral services, be wary”