Call Us Today! • 888-501-0530

What is a Funeral Trust?

What is a Funeral Trust?

Few things in life are inevitable, and one of those is death. It’s something that we all have to face one day. It’s important for you and your family that you plan for your own ending. Without the proper plans in place, your family could have devastating emotional and financial burdens after your passing. One of the worst things that you can do for your loved ones is to not have plans in place.

After you pass away, your loved ones will be left with all of your debts and final expenses. One of those expenses is funeral and burial costs. The average funeral in the United States is around $7,000, but with all of the fees and services, that bill can easily reach $10,000. Those costs can be difficult for a family to pay for after they just lost someone that they love. That $10,000 can easily put them in a giant hole of debt, on top of the emotional pain and suffering that they are experiencing. There are several different ways that you can offset the costs of a funeral, one of the common ways is to use a funeral trust.

This article is going to look at the different parts of a funeral trust and some of the alternatives. It’s important that you and your loved ones have the resources and protection that they deserve.

What is a Funeral Trust?

what is a funeral trustA funeral trust is an agreement that you enter into with a third-party company that they will hold funds to be used after you pass away to pay for all of your final expenses related to your burial. Typically, these trusts are set up directly through the funeral home that you’ll be using after your passing.

These trusts will similar to other types of pre-paid insurance plans, they work directly with funeral homes and are a great way to protect your family from massive expenses after you pass away.

If you haven’t done any estate planning until now, it’s a great time to consider a funeral trust to fund your funeral, even if you still hold a life insurance policy. Funeral trusts can make an excellent financial tool for both you and your family.

Types of Funeral Trusts

There are two main types of funeral trusts to be aware of if you’re looking to protect your family against your final expenses. The two types or revocable and irrevocable trusts, and both of them have different advantages and disadvantages that you have to weigh when looking at funeral trusts.

With a revocable funeral trust, just about everything in the trust agreement can be changed after you sign the paperwork. With these trusts, you can change everything from the beneficiary of the plan, the terms of the plan, and the amount of funds and properties inside of the plan. They have the maximum amount of flexibility for paying for your final expenses.

The another type of plan is the irrevocable funeral trusts, which is at the other end of the flexibility spectrum. After you sign the paperwork for the agreement for the funeral trust fund, you won’t be able to change anything inside of the trust. It’s all set in stone from that point on. Before you complete an irrevocable funeral trust, you want to ensure that you’re 100% on all of the details before you sign the paperwork.

As you can see, both plans are great options for offsetting the rising costs of a funeral and burial, but there are some stark differences that you should consider before you purchase even of them. It’s vital that you make the best decision for your family. In most cases, consumers tend to go with a revocable funeral trust, just because of the freedom that it allows, but there are hundreds of circumstances where an irrevocable fund is a wiser decision.

The Advantages of a Funeral Trust

There are a few benefits to using a funeral trusts that other forms of covering those expenses don’t have. One of those is that the funeral home will guarantee the costs of the goods and services, which means that you’ll have the peace of mind knowing that your family won’t be responsible for paying for any of the major bills after your passing.

Another benefit of these trusts is that the trust will not have any taxable income, which means that your family won’t have to worry about having the money dwindled down by Uncle Same.

Alternatives to a Funeral Trust

A funeral trust isn’t the best option for everyone, luckily, there are several other affordable options for people to offset the costs of a funeral and burial. One of the most popular options is a burial insurance plan.  These policies are an affordable way to give your family the resources they need to pay for all of your final expenses without stretching their budget.

These plans are bought through an insurance company, and essentially they are very small insurance policies that are bought with the intention of using the payout to pay for all of the related goods and services of the funeral and burial. Burial insurance plans are easy to apply for, and you can give coverage in a matter of days. Unlike with a traditional insurance policy, you won’t have to pay the expensive premiums or go through the medical underwriting, same goes for a guaranteed issue life insurance policy.

These policies are a great option for anyone that no longer has any need for life insurance, but doesn’t want to burden their family with the expensive bills of a funeral. Just about anyone can be accepted for coverage, and they will fit just about anyone’s budget.

Unlike a trust fund, the money from the payout comes from the insurance company, not the money that you’ve put into it. Each type of protection offers unique advantages that can fit the needs of different households. You’ll need to consider all of the options to determine which ones works best for you and your loved ones.

Pros and Cons of Burial Insurance Plans and Guaranteed Issue Plans

Burial insurance plans and guaranteed issue plans are an excellent option for getting coverage, but there are several drawbacks to these plans that you should be aware of if you’re trying to protect your family from being stuck with a massive amount of debt.

One major problem of these plans is that they are going to be more expensive than other types of insurance coverage. Without the medical exam or health questions, the insurance company is taking a much greater risk to get insurance. They are going to offset that by charging you higher premiums. You’re going to pay much more for every $1,000 worth of coverage for burial insurance.

Another drawback of these policies is that you’re going to be severely limited on how much coverage that you can buy. Most burial insurance policies will only give you around $25,000 worth of insurance. Before you buy one of these plans, calculate how much life insurance your family would need if something tragic were to happen to you.

One of the benefit of these plans is how quickly you can get approved for life insurance. Because there is no health exam or health questions, you can get a burial insurance plan in a matter of minutes. All that you have to do is tell them your age, your zip code, and how much insurance that you want. After that, you can start paying the premiums and you’ll have life insurance. If you want to get a traditional life insurance plan, you could end up waiting several weeks or even a month or more to get life insurance. If you want insurance protection as quickly as possible, a burial insurance policy is going to be the best choice.


You can’t avoid death, which means you can’t avoid funeral expenses. You should do your planning ahead of time to help your family avoid having additional emotional stress and financial burdens. Having the proper planning in place can make the tragic event as smooth as possible for your family. It’s never easy to lose a loved one, but having a funeral fund or burial insurance policy can relieve some of the financial pressure off of your family members.

If you have any questions about funeral trusts or burial insurance plans, please contact us today. Our agents would be happy to answer those questions and ensure that you’re getting the best coverage for your loved ones. Nobody likes to think about his or her own death, but not planning for it is one of the worst things that you can do for your family.

We are a group of independent insurance agents, which means that we don’t work with one single company. Instead, we represent dozens of highly rated companies across the country. We can bring all of the best insurance plans and rates directly to you. We can save you both time and money if you decide to purchase an insurance policy.

Sorry, comments are closed for this post.