9. How a Funeral Trust Works Life Insurance Policy Irrevocable Funeral Trust Pre-Planning Funds Use money from Savings, CDs, etc . . . Protected funds earn tax-free interest until time of need Policy Assigned to Policy Value GROWS! Claim Paid Funds avoid probate costs and delays; expenses covered immediately Excess Funds Paid to Estate Funeral Provider Paid Within 48 Hours
10. Fund Protection Irrevocable Funeral Trust Creditors Nursing Homes Probate Medicaid* * Eligibility varies by state.
11. How the Trust Compares * Some state regulations apply; please consult your legal advisor. ** Unless put into trust for funeral expenses. No No No** No No Yes* Excluded asset in order to qualify for Medicaid & SSI No No No** No No Yes Funds protected from creditors No No Yes No Depends Yes Defined growth rate No No Yes Yes Yes Yes Principal guaranteed No No Yes Yes Depends Yes Free of market risk No No No No No Yes Federal Income Tax-free death benefits Depends Depends Depends Depends Yes Yes Proceeds avoid probate costs Mutual Funds Money Market CD Savings Account Annuity NGL’s Final Expense Trust
Think about some of your life’s most memorable milestones: getting married, starting a family, getting an education, or simply saving for something special: your dream vacation, perhaps, or a home of your own. These events don’t just happen. You consider options. You plan. You save. . .
The same smart thinking that made you plan ahead for the expense of college applies to funerals, too. More and more each year, people just like you are taking the time to think about how they will be remembered; taking the time to make decisions now, instead of leaving them for their loved ones.
Planning for one’s funeral is not high on most people’s list of priorities. Many people say they’ll “get around” to it, but never do. Putting off such a critical decision can lead to an added burden on families, who will be left to plan and worry about finances in the midst of grieving. Just remember – you don’t have to get overwhelmed with the details to make a HUGE difference for your families. By making a few key decisions today, such as setting money aside for the purpose, you’re paving a smoother road for the ones you love.
It has become common practice for funeral homes to require payment in full on the day of a memorial service. How will your loved ones pay the expense? Traditional life insurance is one option, but that money is generally intended to cover ongoing family expenses. In addition, there is often a lag between the claim time and the payout, leaving your family to cover costs in the meantime. There is also the possibility of using personal savings, but what if medical costs have depleted that source? Finally, a credit card or loan may be an option, if credit is available to those planning, but there are interest charges to consider. However, there is a better way take charge of your final expenses . . .
A carefully planned and funded funeral expense plan sets aside money specifically for your funeral. There’s no loan, no “tapping” of personal assets, and by assigning the policy to a trust account, the money is secure from all creditors.
While funeral costs are not inexpensive, they may actually be less than you think. A study by the U.S. Senate found the average funeral cost to be around $8,500. But if the unexpected were to happen, where would that money be found?
Even if you have the funds on-hand now, who’s to say that they will STILL be readily available in your time of need? Long-term care is a major expense and a growing concern as we age. In fact, 43% of Americans older than 65 will need nursing home care at some point - an expensive situation to be in. You may need medical assistance to help pay for this care . . . But will you QUALIFY? By using a trust to set aside funds for your funeral, you are effectively “spending down” your assets, preventing them from being counted as excess monies and, possibly, from being disqualified from Medicaid.
Here’s how the trust works: Determine the amount of money you’ll need to provide the funeral you want and purchase a life insurance policy in that amount or higher. Then, simply assign the policy to the NGL Funeral Trust. By irrevocably assigning this policy to the trust, the trust becomes owner and beneficiary, and the funds become excluded from your assets, protecting them from creditors and Medicaid. The policy amount increases, tax-free, until the time of need, is free from probate costs and delays, and is quickly paid out to the funeral provider to immediately cover expenses. Any excess funds are then disbursed to your estate.
The NGL Funeral Expense Trust is packaged very simply with an NGL Single Pay Life Insurance Policy. And, it is offered free of charge! Simply assign your policy to this trust in the same transaction as your purchase, and the money is completely protected so it will be there for any funeral needs - protected from all creditors, nursing homes, probate and even Medicaid.
While Annuities are a good way to fund RETIREMENT, they may not be the best way to pay for final expenses, as your heirs will eventually have to pay tax on any growth. Savings accounts, CDs and Money Market accounts are subject to yearly Federal Income Tax, and require you to file an annual 1099. Mutual Funds are affected by continual market fluctuation. Compared to all of these, Final Expense Trusts are the ONLY accounts that can help protect your assets against Probate, Lawsuits, Creditors, Income Tax AND Medicaid “Spend-Down”. In addition, the benefits are paid directly and immediately to the funeral home, avoiding probate delays and sparing your family any additional stress.
National Guardian Life Insurance Company, or NGL, is a mutual company based in Madison, Wisconsin. With a hundred-year history of excellent service and financial stability, we are proud to be a company you can trust. A less tangible, but equally important asset is our outstanding industry reputation, with “ ‘A-minus’ Excellent” ratings from AM Best - the gold standard in independent review companies.
You’re just three easy steps away from peace of mind. Start by contacting your trusted Financial Advisor. Once you’ve decided on your financial plan, establish a trust-protected final expense policy from existing funds or by transferring from traditional life insurance. You can even add funds in installments for one year! If you decide to preplan, in addition to prefunding, ask for an NGL Funeral Planning Guide. This easy to follow, three-step guide will help you record basic information your family will need, as well as allow you to outline any wishes you may have for a service. You may even decide someday to go the extra mile and meet with a funeral planning professional to make a more detailed plan.
Final Expense planning is the wise and considerate choice for your loved ones. Don’t leave financial burden as your legacy; NOW is the perfect time to start planning for the future.
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