Service Payment Options
There are several ways that
people go about paying for funerals. Below are some of the most common:
Cash is the most obvious way to pay for a funeral when completed.
What may not be obvious is where those funds will come from at that
Personal Savings and
Cash is often stored or invested in the form of personal savings and investments.
There is a myriad of savings and investment vehicles to choose from. Keep in mind that death may occur at a
time which might not be convenient for withdrawal from a particular investment due to market timing, tax
implications, or withdrawal penalties.
Personal life insurance is a common way to prepare for a death where-as personal savings and
investments may either be inadequate or ill-situated for early withdrawal as mentioned above. At the time of
death, a claim is sent in to the life insurance company and the company sends a check to the beneficiary in the
amount of the death benefit. For family clarity and ease of administration, Roland Funeral Service is often
designated either as owner or beneficiary of part or all of an insurance policy with an agreement that funds will
only be used to the extent of the actual funeral costs. This is often the case where
Title 19 may be an issue.
Burial Trusts are used to prefund when it is desired to designate
a certain pool of funds aside specifically for funeral purposes. To do this, you simply meet
with Sara or
Heidi to preplan an approximate funeral amount. Next you arrange with a financial institution (usually a
bank) to set up a burial trust. This involves the purchase of a CD in the amount of your preplanned
funeral expense. An agreement is signed with the financial institution that states the funds will be set
aside exclusively for funeral expense. Next, you meet with the funeral home to sign a funeral
agreement where Roland Funeral Service agrees to use the funds from the burial trust exclusively for
funeral-related services rendered. At the time of death, the financial institution writes a check directly to
Roland Funeral Service. Burial Trusts are commonly used when Title 19 is an issue.
Preneed Insurance/Insurance Burial
Preneed insurance is a life insurance policy applied for and designated by
Roland Funeral Service specifically as a trust for funeral expenses. At the same time the life insurance
policy is written, a funeral agreement with Rolands is written whereby Roland Funeral Service agrees to use the
funds from the insurance trust exclusively for funeral-related services. Preneed insurance is most commonly
used when either Title
19 is an issue or a family wants the peace of
mind knowing that a specific funeral need has been planned for and taken care
An insurance trust is created at Rolands by completing an insurance
application. While requiring slightly more paperwork, there are also some added benefits over a bank trust:
1) no annual income tax reporting is required on the investment earnings, 2) the investment rate is comparable to
slightly higher than a bank CD, 3) a casket-inflation feature is included to offset the effects of rising casket
prices, 4) often times an additional "bump" or death benefit is added at no extra charge depending on the age of
the insured, and 5) as a convenience, both the insurance application and the funeral agreement may be completed at
the funeral home.
A burial trust
is often made with a local bank and has a sense of familiarity and simplicity with it. There is slightly less
paperwork involved initially. However, income tax has to be reported annually on the CD investment
earnings. Generally, one meeting must be made with the bank personnel to create the burial trust and a
separate meeting must be made with Rolands for the the funeral
In order to avoid confusion regarding these options, please
give licensed funeral
Heckenbach-Wood a call. He would be honored to help in any way he can.