Many Houstonians have taken the laudable first step of creating an estate plan, so their assets can be passed off after their death. However, people will often forget to include provisions to handle the expenses that occur at the end of a person’s life. If these costs are not incorporated into a person’s estate plan—by putting money away for them—it can leave family members in a difficult financial situation. Below are some common end-of-life expenses—either that many forget to save for or forget to exist entirely—along with how to make sure on how to save this money.
It is important to incorporate funeral expenses into a person’s estate plan. When people either do not have the funds saved for a funeral—either in a savings account or as part of a trust that can be utilized after a person has passed away—they are often shocked by the high cost. According to the National Funeral Directors Association, the average funeral in 2019 cost $7,640. By putting this money away when drafting the estate plan, the family will not have to worry last minute about coming up with these funds during an emotionally difficult time.
Better yet, pre-plan the funeral with an arrangement that you approve of! Get the agreement in writing. If the agreement for a pre-planned funeral is irrevocable, this can benefit Medicaid recipients as an approved spend down item as well.
While it can be difficult to predict the last few years of an individual’s life, it is always important to have money saved in case of end-of-life medical costs. Insurance may cover many of these medical expenses; however, it is better to have money saved for instances insurance does not wholly cover. For example, some families will choose to either put money away in case a loved one needs to be placed in a nursing home. Other families will create an irrevocable trust to protect the majority of their assets but still ensuring their loved ones can live in a nursing facility. The decision on how much to save for end-of-life expenses—along with how to save—depends on the family. But the decision can be made easier by talking with an experienced estate planning attorney.
The Deceased’s Unpaid Debts
For many grieving loved ones, the deceased’s unpaid debts will be far from the first thing on their mind. However, they can catch up to the family quickly. These unpaid debts may include car loans, mortgages, or credit card debt. In the case of certain debts, including credit card debt and automobile loans, the deceased’s estate is responsible for handling the remaining balance. This is why it is critical to have additional funds built into the estate plan: so loved ones will not have to handle this burden if the estate does not have the necessary means.
It can be difficult to plan for the unexpected; however, by working with a knowledgeable estate planning attorney, the doubt and uncertainty of death-related expenses can be minimized.
Contact a Houston Estate Planning Attorney
If you or a loved one is in need of estate planning services, contact the experienced attorneys at McCulloch & Miller, PLLC. At our firm, every Houston estate plan is uniquely tailored based on a person’s financial and family situation. Our estate planning attorneys will work diligently with you to create the estate plan that ensures your family’s future is secure. To schedule a no-commitment, consultation, give us a call today at 713-333-8900.