Prepay Your Funeral with an IFT: Irrevocable Funeral Trust

Prepay Your Funeral with an IFT: Irrevocable Funeral Trust 109

Irrevocable Funeral Trust

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Who’s first to pull out their checkbook?

Perhaps you’ve heard a story or two or even been involved in an unfortunate situation where everyone in the room just looked and stared at each other when it was time to pay the costs associated with services of a loved one that just passed. Often times these types of scenarios lead to arguments that cause relationships to deteriorate. Many folks overlook these potential family dilemma’s by not taking action on a plan to cover their final funeral expenses. Now is a good time to consider just that.

What is an Irrevocable Funeral Trust?

An IFT is a life insurance policy that is assigned to a funeral trust. There are a number of benefits that an IFT can provide. One major one is when individuals are planning on going on Medicaid, it can be difficult to exempt assets. When a whole life policy is irrevocably assigned to a funeral trust, it is generally considered exempt by Medicaid and not subject to the 5 year look-back.

Benefits of an IFT

Here is a list of benefits an IFT can provide:

  • Applicants are not required to go to a funeral home.
  • Guaranteed issued policy (No health questions; No Underwriting)
  • Permanently set aside funds for funeral expenses.
  • No Attorney Fees; Funeral Trust is already established.
  • Policy Benefits are income tax exempt.
  • Strong growth rate on policy up to age 90.
  • Portable to any funeral home in all 50 States.
  • Funds used for funeral expenses cannot be attached by creditors.
  • Excess policy benefits are paid to the Estate of the insured.

How much can be funded?

The maximum amount that can be funded into an IFT in California is $15,000 in a single lump sum premium or in increments of multiple plans with a minimum of $1,000.

Average Funeral Cost

Based on a study a few years back by the National Funeral Directors’ Association, the average cost of a typical burial and funeral services was in excess of $9,500. Cemetery costs can vary by location and can range anywhere from $500-$10,000 or more. The costs listed do not include miscellaneous charges such as flowers or obituaries.

Some common items included in these costs are: Non-declinable basic services fee, removal/transfer of remains to funeral home, embalming, other preparation of the body, use of facilities/staff for viewing, use of facilities/staff for funeral ceremony, use of a hearse, use of a service car/van, basic memorial printed package, vault, and metal casket.

The rising costs for funeral services can leave a tremendous burden on your family. Eliminate that burden and give yourself the peace of mind today so that your loved ones can focus on celebrating your life after you are gone.

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