People in North Carolina who are creating an estate plan might want to consider a funeral trust. If a person has enough money to pay for long-term care and funeral expenses, a funeral trust might not be necessary. A person may also opt instead to have a life insurance policy to cover funeral expenses. However, a funeral trust can be a way for a person to make arrangements that will prevent the family from having to make difficult decisions while they are grieving. It may also be a good tool for people who have not yet put their wishes for a funeral and burial in writing.
A funeral trust may be revocable or irrevocable. The advantage of a revocable trust is that it can be changed or cancelled by its creator. However, an irrevocable funeral trust offers protections that a revocable trust does not. For example, the funds in an IFT might be considered eligible expenses when a person needs to spend down assets in order to access Medicaid services. This means that the money in the funeral trust would be exempt from the requirement that it be spent.
The funeral itself may or may not be prepaid. As part of estate planning, people may also make decisions about the burial service, transportation and other aspects of the funeral.
Estate planning can be a difficult topic for some people to broach, but it can also be important in protecting assets and family members. The uses of trusts go far beyond paying for funerals. A person might create a special needs trust that protects assets for a relative who also receives benefits from the government or a spendthrift trust to manage money for an irresponsible loved one. An attorney can often describe other areas in which a trust could be useful.