What to Do When You Can't Afford a FuneralFunerals can be expensive - or they can be reasonably priced. The question is, "How can families honor their loved one with authenticity and dignity, regardless of budget?" Family-led funerals using products already available in the home, plus research to find the best price for what you truly want, all add up to prudent spending and a meaningful final exit.
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Social Security Benefit
The next-of-kin, designated agent, or funeral director must file to receive Social Security death benefits of $255 at the Social Security Administration. Check out FuneralWise for more info on Social Security and VA benefits. Find an office near you here.
Military and Veterans Benefits
Contact the Department of Veterans Affairs for information on benefits, or visit http://www.cem.va.gov/ for online information. Among other things, you may be entitled to a U.S. flag from the Post Office to be used at a memorial service by presenting a certified copy of the death certificate and proof of military service. You may also qualify for a free gravesite in a VA cemetery. Toll-free: 800-827-1000. Veteran's death benefits may include the following. Contact the VA to learn if you qualify for:
- a $300 burial expense reimbursement for qualifying veteran's families
- a $300 burial plot assistance payment for burials not in VA cemeteries
- a $2000 active duty or service-connected death benefit
- a travel allowance
Trusts, Insurance, and Bank Accounts
Funeral Director's Trust
When using a funeral home, you may be offered the opportunity to prepay into what is called a Funeral Director’s Trust. Be aware that the money held there is not transferrable or refundable. It may be sold multiple times over its shelf life, held and bought by other funds. The Funeral Consumers Alliance warns consumers not to prepay in long-term circumstances for this and several other reasons, including the possibility that they may go out of business, and there will be no remedy for recovering your funds.
Burial Insurance
Burial insurance policies are usually offered by life insurance companies in the form of term or whole life policies. Upon death, the company pays out the full amount directly to your beneficiary, and he or she can spend it any way they choose, perhaps to pay medical or legal bills—or something entirely different. If you pay for a $20,000 funeral and your family chooses a $2000 cremation, you can see the potential situation. Some burial insurance policies have been known to lose value over time as well and are nonrefundable should you change your mind at any time. The upside is that money paid for insurance premiums is considered a Medicaid-protected asset.
Preneed Insurance
Preneed insurance is similar in some ways to burial insurance, in that it is a policy that will pay out upon death for funeral expenses, merchandise, cremations and burials, and all that entails. It may be a good protection against inflation if you hold the policy long enough, as it locks in the price at the moment. However, instead of going to your family, the beneficiary is usually made payable to the funeral home, and you will have to trust that the terms of your agreement are met. It is also a Medicaid-protected asset.
Payable on Death (POD) Bank Account
Perhaps the most sensible approach is a good old-fashioned bank account, designated as a payable on death account, set up with funds of your choosing that may earn a modest interest over time. Your next-of-kin or Durable Power for Finance will have easy access to the money immediately, and you can update your wishes any time directly with him or her. The only downside is that the money is not Medicaid-protected and the designated beneficiary is not legally obligated to use this money as you have directed. They receive this money outright, so make sure they understand your intention for these funds and will honor them.
When using a funeral home, you may be offered the opportunity to prepay into what is called a Funeral Director’s Trust. Be aware that the money held there is not transferrable or refundable. It may be sold multiple times over its shelf life, held and bought by other funds. The Funeral Consumers Alliance warns consumers not to prepay in long-term circumstances for this and several other reasons, including the possibility that they may go out of business, and there will be no remedy for recovering your funds.
Burial Insurance
Burial insurance policies are usually offered by life insurance companies in the form of term or whole life policies. Upon death, the company pays out the full amount directly to your beneficiary, and he or she can spend it any way they choose, perhaps to pay medical or legal bills—or something entirely different. If you pay for a $20,000 funeral and your family chooses a $2000 cremation, you can see the potential situation. Some burial insurance policies have been known to lose value over time as well and are nonrefundable should you change your mind at any time. The upside is that money paid for insurance premiums is considered a Medicaid-protected asset.
Preneed Insurance
Preneed insurance is similar in some ways to burial insurance, in that it is a policy that will pay out upon death for funeral expenses, merchandise, cremations and burials, and all that entails. It may be a good protection against inflation if you hold the policy long enough, as it locks in the price at the moment. However, instead of going to your family, the beneficiary is usually made payable to the funeral home, and you will have to trust that the terms of your agreement are met. It is also a Medicaid-protected asset.
Payable on Death (POD) Bank Account
Perhaps the most sensible approach is a good old-fashioned bank account, designated as a payable on death account, set up with funds of your choosing that may earn a modest interest over time. Your next-of-kin or Durable Power for Finance will have easy access to the money immediately, and you can update your wishes any time directly with him or her. The only downside is that the money is not Medicaid-protected and the designated beneficiary is not legally obligated to use this money as you have directed. They receive this money outright, so make sure they understand your intention for these funds and will honor them.
Public Assistance
The State of NH requires all municipalities (and has for over 200 years) to assist in the burial or cremation of deceased welfare recipients RSA 165 (see Dealing With Burial Costs: understanding a municipality's obligations by NH Cities and Towns). Usually the family must provide evidence of public assistance along with completion of an application for assistance. Some municipalities will only pay for a direct cremation, which doesn't include a service any kind or witnessing the cremation.
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Town and City Clerks for Filing Assistance
Town and City Clerks are trained to assist you with filing the death certificate with the NH State Office of Vital Records Administration. Bring the completed death certificate to your local town hall during office hours, or make arrangements prior to need, if possible, with your town or city clerk to meet during off hours. NH law says that the death certificate must be filed with the state through this electronic process within 36 hours from the time of death stated on the death certificate. Weather, holidays, and public office hours taken into consideration, this is still usually sufficient. The death certificate must be completed and signed by the appropriate authorities, physician of record, hospice nurse, or other qualifying authority for the medical portion, the next-of-kin or designated agent acting as their own funeral director on the demographic portion. Due to the nature of elected official terms, the town and city clerks listed here may change despite our best efforts to keep up. To report updated information, please email nhfrea@gmail.com. New Hampshire Town and City Clerk
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Public Assistance for Funeral Expenses
Families whose deceased family member qualified for public welfare may apply for financial assistance for disposition expenses from their town or city, under NH RSA 165. According to New Hampshire Legal Aid, "The law says towns must provide a decent burial or cremation." Funeral assistance usually consists of a few hundred dollars (often somewhere between $400 and $700) toward either immediate burial or direct cremation, with no funeral services or ceremonies. Not all towns or cities in NH make the welfare assistance contact information available on their websites, so if your town contact is not listed, please call the Town or City Clerk, Town of City Administrator, or the Selectman's Office in your town to locate the appropriate agent. Each town will require a completed application for assistance, usually available at the town offices and often online on the town's website. Though there are often office hours posted, nearly all welfare officers require a confidential appointment with the application filled out ahead of time. Call the agent listed with questions and to make an appointment. Public Assistance and Welfare Office Contact Information |
A Word About Nonprofit Charity and Crowdsourcing
Many nonprofits that provide consumer information and education receive calls frequently asking for money to help pay for a funeral. Three things to remember before making that call: 1) not all nonprofits are charitable foundations; 2) failure to plan for a funeral does not make it someone else's financial responsibility; and 3) educational websites like this one endeavor to assist families to find ways to consume less, reducing unnecessary costs.
Another means of raising money for a funeral is crowdsourcing on social media. This started out working well but, more and more, people are becoming weary—and leery—of being asked for money online. Perhaps it's time to bring back the old custom of offering money discreetly to the widow/er to help defray costs, or to “pass the hat” within a community so that mourners may contribute as they choose.
Another means of raising money for a funeral is crowdsourcing on social media. This started out working well but, more and more, people are becoming weary—and leery—of being asked for money online. Perhaps it's time to bring back the old custom of offering money discreetly to the widow/er to help defray costs, or to “pass the hat” within a community so that mourners may contribute as they choose.
Rethinking the Rights and Responsibilities of Being a Funeral Consumer
It's important to understand the rights and responsibilities family members have for funerals and seeing to the disposition of a relative. For expert assistance with financial funeral planning and the finer points of deaths that occur out of state, setting up funeral monetary funds and the like, we suggest that you visit our sister organization, the Funeral Consumers Alliance.
Rarely have we stopped to think that perhaps the best way to be a consumer is to consider simply consuming less, but there is a growing aesthetic that is changing the way we view spending for funerals that espouses simplicity and authenticity. For some, that means the family does more themselves; for others, it means finding ways to do the necessary by paring down services and expectations. It is not always driven by money — in fact, statistics show that the highest cremation rates (the least expensive option) in the US occur in the states with the highest median incomes. People who can well afford a full conventional funeral often opt for a direct cremation as a statement that reflects their lives, rather than their bank account. And this has given rise to the understanding that the amount we pay for funerals is no longer considered equal to the amount we loved someone.
If cost is a concern and the family can manage home care and disposition themselves, a considerable savings may be possible. If the family prefers to hire a funeral professional exclusively, it is important to recognize that this is a business transaction and that the price is determined by the owner. Blended funerals, where the responsibility is shared, may reduce costs while facilitating a smooth experience for all.
Rarely have we stopped to think that perhaps the best way to be a consumer is to consider simply consuming less, but there is a growing aesthetic that is changing the way we view spending for funerals that espouses simplicity and authenticity. For some, that means the family does more themselves; for others, it means finding ways to do the necessary by paring down services and expectations. It is not always driven by money — in fact, statistics show that the highest cremation rates (the least expensive option) in the US occur in the states with the highest median incomes. People who can well afford a full conventional funeral often opt for a direct cremation as a statement that reflects their lives, rather than their bank account. And this has given rise to the understanding that the amount we pay for funerals is no longer considered equal to the amount we loved someone.
If cost is a concern and the family can manage home care and disposition themselves, a considerable savings may be possible. If the family prefers to hire a funeral professional exclusively, it is important to recognize that this is a business transaction and that the price is determined by the owner. Blended funerals, where the responsibility is shared, may reduce costs while facilitating a smooth experience for all.
