There are plenty of things we procrastinate about, such as going to the dentist, cleaning out the clutter closet, and exercising. Oh, and planning for death. Putting off exercise for another day or so may not be a big deal. But life happens, and you may not have a chance to make up for a delay in making the financial preparations you need in advance of your death. And missing out can be costly to your heirs.
Dying Costs Money
Dying can be expensive. There are funeral and burial costs, legal expenses, and most significantly, healthcare in your final weeks and months.
These subjects are uncomfortable to even think about for many people, let alone discuss with loved ones. But if you don’t want to burden them with the costs and stress at an already difficult time, some planning is in order. Pre-planning your funeral allows you to make some necessary decisions and help family members make the most compassionate choices. You can even pre-pay some of the expenses.
You can choose what type of burial you want. Throughout your life, you’ve done lots of comparison shopping. You decide if you want a sporty Mercedes, a very safe Volvo, an environmentally friendly electric vehicle, or a budget-friendly Kia. You can make those decisions about the cost, appearance, and environmental impact of your funeral as well. Doing so also spares your grieving spouse or children from having to figure out what you would have wanted. Very often, they’ll end up spending more than you would have liked because they want to honor what they think are your wishes and don’t want to let you down.
No matter what you decide, the key is not to wait until you are on death’s door. We don’t get a warning a week ahead of time about a fatal heart attack, a car accident, or COVID-19.
According to the National Funeral Directors Association, the median out-of-pocket expense for a funeral topped $7,300 in 2020, but prices vary widely. As with most everything else, it’s even higher in New Jersey – more than $9,100. And, of course, that’s just the average. Many people spend much more. The funeral industry rakes in more than $20 billion a year in revenue.
And what do you get for your money? The price tag usually includes the viewing and burial, transporting the body to the funeral home, the casket, and preparing the body. However, the cemetery plot’s cost, a headstone marker, flowers, a repass, and other items are usually extra.
If you pre-plan your funeral, you can decide if you want the plain pine box (less than $1,000), the luxury mahogany version (as much as $10,000), or something in between. You can purchase a casket from Walmart, Costco, or even on Amazon, or you can buy one from the funeral home. It’s like buying a piece of furniture.
A burial plot can cost as little as $700 at a public cemetery to more than $10,000 at private cemeteries. Many people buy a burial plot in advance, but a word of caution: you may want your family buried in the same plot, but remember that kids often move away and have their own families and desires.
Comparison shopping ahead of time of funeral homes, cemeteries, and other expenses can save you hundreds, maybe thousands, of dollars. Unlike buying a piece of furniture, though, funeral homes are not required to post their prices online.
Also, a growing number of people choose cremation, which can cut the cost by $1,000 or more, depending upon whether you bury the ashes in a grave or scatter them in the ocean. You can even supply your own urn.
It’s worth noting that a funeral is not considered a medical expense, so it is not covered by Medicare or medical insurance, and it is not tax-deductible. They are considered legitimate deductions for estate taxes, but only if the estate pays the expenses directly.
Healthcare: Costs and Options
We all know that healthcare is outrageously expensive and gets even worse at the end of life. Ten percent of the average person’s lifetime medical expenses come from end-of-life care in the final years, months, and days. That’s especially true if you require expensive medications or care facilities.
Surveys show that seven out of 10 Americans say they would prefer to die at home, but it doesn’t always work out that way. In fact, about 75 percent die in the hospital or other care facility. The average cost for that last month of life in a hospital bed is more than $32,000. Hospice or palliative care can often reduce the pain, stress, and costs during the final stages of life. Once a terminal diagnosis is made, Medicare and Medicaid pick up 85 percent of the costs. Still, the costs can be high. An analysis done in 2018 for the Federal Reserve Bank of Richmond estimated out-of-pocket expenses in the final year of life to be around $9,500. For patients with long-term dementia, cancer, or heart disease, the cost of dying can be much higher. Those services often do not improve the quality or length of our last days in a meaningful way.
Of course, not everything is about money. Quality of life has to be at the top of your list. It’s important to have a difficult conversation with loved ones about what type of medical care you want in your final days, and to put your wishes in writing through a healthcare directive or proxy, often prepared along with your Will. You can also appoint someone to represent your end-of-life wishes.
New Jersey’s Aid in Dying for the Terminally Ill Act took effect in 2019. It allows qualified patients to request that their doctors prescribe medications to end their life with as little pain and suffering as possible. NJ Governor Phil Murphy said the law allows “terminally ill and dying patients the dignity to make end-of-life decisions according to their own consciences.” Seven other states have similar laws.
A recent article in National Geographic notes the pandemic has heightened the tendency to procrastinate, but this is one item that can’t wait. You never know when you’ll need it, and by then, it may be too late.