The short answer to this question is yes - paying for or arrange your funeral in advance will save your family from a lot of trouble, confusion and financial worry at time when they are not ready to handle it.
The major reason for planning your financial future is to benefit your family. Making arrangements for your final expenses should be part of that. Not the most pleasant of tasks, but vital nonetheless. For full disclosure: I was a caregiver for multiple family members for 13 years in total. My husband is a funeral director. I worked in a hospital/healthcare facility for 15 years. I feel very strongly about everyone having their final wishes in order. I once heard an exercise guru say "Your good health is a gift you give others." So true. Also a gift is making a difficult time easier. Also, let me encourage you not to wait until your golden years to plan for your final wishes. Many people don't live to see their golden years. Death is a part of life and life happens to us all.
First, many funeral homes sell policies or trusts. These are considered insurance and most are regulated by the insurance commissioner. You may have a funeral home that your family normally uses. Or maybe you've never stepped foot inside one. Either way, choose a funeral home whose contracts are regulated by the insurance commissioner because, should the funeral home go out of business or should you decide to use another one, you want to make sure your policy/trust is transferrable to any facility your family chooses.
Second, ensure that you are locking in today's prices (preferably discounted) in your policy/trust contract. Why? Because prices will only go up in the future. So, if the funeral you want costs $10,000 today, and your policy/trust discounts it to $7,000, then you pay (or make payments on) the $7,000. Once you've paid your $7,000, you are covered. So, if you die in 20 years, when the same funeral you want then costs $20,000, you don't owe anything else. You don't pay the difference. It's done. Plus, your family doesn't have to worry about how to pay for it.
Third, if you choose to set aside money or to purchase a life insurance policy to cover your funeral expenses, be sure these funds will cover everything on your wish list. Your wish list will probably cost more in the future than the amount you plan for today (see above paragraph). Also, ensure that the funeral home you choose will take assignment, if you are using a life insurance policy. Some funeral homes will not take a payment plan on charges incurred at-need, and they require payment in full at the time services are rendered. Some life insurance companies will take time to send your family a check. If your family is trying to have your funeral and get you to your final resting place, they don't have time to wait for the life insurance company to get around to paying them. It's important to remember that funeral homes are businesses, too, not charitable organizations. A harsh fact, but still a fact.
Fourth, be aware that many items or services we see at funerals are outside charges that are unrelated to the funeral home and their scope of responsibility. Examples would be: Flowers; vault and graveside set up; specialized cosmetology (if you prefer that your regular beautician prepare your hair and makeup, this is an outside charge); opening and closing of the grave/burial plot; decorative urn; musicians and singers for the service; clergy; family transportation. You can also expect additional outside charges if you die out of your home state, or if you plan to be buried in a state that is not your state of residence.
Finally, however you decide to handle your final expenses, perhaps the most important thing is to make your wishes known. Tell your family. Give written instructions to your funeral home of choice. Leave a file of instructions in your home to be read upon your death. Please do not include your funeral instructions in your will, as your will is likely to be read much later than your funeral - then it's too late to carry out your wishes. Make sure someone knows what you want and how you intend for them to pay for it. During such a difficult, emotional time, this will be a great gift to your family. You are taking the burden of business away from them and just allowing them to grieve as they need. What a great legacy!
