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3 Ways to Cover Final Expenses



If you or a loved one are facing the prospect of paying final expenses, there are several ways to prepare for this eventuality so that your family is not overwhelmed.

Initial cost savings

The first step is to estimate the total expenses based on your preferred method of internment, and find ways to reduce those expenses when possible. 

After deciding whether you want a traditional burial or cremation and what kind of service most fits your family traditions, look for as many cost savings as possible to reduce the overall price tag. Research pricing for individual items such as the cost of headstones or caskets for sale, ongoing burial plot maintenance fees, etc. to determine whether you’re getting the best deal from a service provider, and ask if they have economical alternatives. 

If you or a loved one served in the armed forces, don’t forget to investigate the death benefits provided by the Veterans Benefits Administration, which in some cases extend to spouses and minor children. Every veteran is guaranteed a plot at a state or national veteran cemetery, along with other amenities like flags and headstones. Discharge paperwork is required to obtain these benefits, but making use of them can provide affordable services or partial reimbursements. 

Totten trust 

The probate process can take several months to over a year, but funeral arrangements are typically required to be paid in advance or at the time of services rendered.

Once you’ve determined a reasonable amount to cover final expenses, you or a loved one can set up a payable-on-death account, sometimes called a Totten trust. This enables a beneficiary to disperse money upon the death of a loved one without having to wait for the probate process. 

There are other types of accounts as well, including joint savings accounts with right of survivorship or trust funds. Discuss potential tax and probate ramifications with an expert to determine which method is best for your situation. 

Viatical settlement

For patients in the late stages of terminal illness, or seniors in immediate need of cash for medical expenses or quality-of-life concerns, a viatical settlement could provide the necessary capital. Working with a viatical settlement company provides a cash payout for the sale of one’s life insurance policy.

These funds are commonly used to pay medical expenses for things like cancer treatment or experimental therapies not covered by insurance, but they can also provide cash for final expenses. Moving this money into a vehicle such as a Totten trust or other liquid account can give your loved ones the power to cover your final expenses in a timely, convenient fashion. 

Funeral insurance

If a person is unable to purchase a conventional life insurance policy, perhaps due to the health exam, one might purchase a funeral insurance policy instead, but read the fine print carefully. Some companies have disclaimers and ways to deny coverage, so do your research to find a trustworthy company. 

Maximum payouts for many policies typically cap out at $25,000, but the premiums tend to be affordable, which is one reason why some opt for this method. It’s imperative that the premiums be paid on time – any lapse could prevent the payment of benefits, so make sure the policy stays current. 

No matter what you choose, make sure to communicate your plans and research to at least a few other trusted family members or friends. Keep all relevant paperwork easily accessible, labeled or with notes if possible. You may also look into designated your beneficiary as a durable power of attorney to give them more freedom to manage final arrangements and expenses.


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