Estate planning typically makes use of numerous estate planning tools. Although your Last Will and Testament should be the foundation of your estate plan, you may also make use of other tools such as a funeral trust. If you are unfamiliar with the concept of a funeral trust, understanding some of the basics can help you decide whether including one in your estate plan is right for you.
A funeral trust requires the same basic elements as any other trust for creation–a trustor, a trustee, a beneficiary and trust assets. As the trustor, you will appoint the funeral home that you wish to handle your funeral and burial as the beneficiary of your funeral trust. You may also appoint the funeral home as the trustee, or choose another person as trustee who is unrelated to the funeral home. You must then fund the trust. Although you can use cash or any other type of asset to fund the trust, people often use a life insurance policy that names the funeral trust as the beneficiary. Upon your death, the policy will then pay out to the trust in an amount sufficient to cover your final expenses.
By creating a funeral trust, you can rest assured that your final expenses are covered and that your funeral and burial will be handled in the manner of your choice. Planning ahead also ensures that your loved ones and family members are not forced to make difficult decisions during such an emotional time.