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What does a funeral trust do?

On Behalf of | Nov 23, 2022 | Estate Planning

If you have a loved one who is nearing the end of his or her life, you already may be worrying about paying for a funeral. After all, according to World Population Review, the average cost of a funeral in the U.S. is between $7,000 and $9,000. You can spend considerably more, though.

While there are many ways to plan for funeral expenses and other end-of-life costs, funeral providers often recommend funeral trusts. Before you agree to be part of a funeral trust, however, you should be certain you know exactly what you are getting into.

The funeral home’s trust

A funeral trust is a legally binding arrangement between the funeral home and the beneficiary. With a funeral trust, which can be either revocable or irrevocable, a person places assets into a trust to cover his or her eventual funeral expenses.

Covered expenses

It can be burdensome to ask relatives to make and pay for funeral arrangements, especially when they are grieving the death of a loved one. Under the umbrella of funeral expenses, a funeral trust typically covers the following:

  • Urns, caskets, vaults and plots
  • Embalming and cremation
  • Death certificate fees
  • Obituaries
  • Officiants
  • Food, flowers and venues
  • Other funeral expenses

Because the trust pays for many or even all funeral-associated costs, loved ones are free to mourn without reaching for their pocketbooks.

Ultimately, though, because there may be some considerable tax, estate planning and benefits implications for joining a funeral trust, you should fully understand all advantages and drawbacks before doing so.


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