Death and Taxes - The Blog

What to Do with the Body?

The November/December issue of Probate & Property has an interesting article written by Russell E. Haddleton and entitled "What to Do with the Body? The Trouble with Postmortem Disposition."  The article -- which I can't seem to find online -- gives a nice rundown of different types of burial, including (but not limited to):

-burial at sea (with citations!  see 40 C.F.R. §229.1); and

-freeze-drying ("the decedent's body is flash-frozen to minus 18 C..., then dipped in liquid nitrogen at a temperature of minus 196 C.... The body, which is then brittle, is subjected to sound waves that reduce it to powder.  The body can then be cremated or buried in a coffin made of cornstarch, which, when placed in the ground, will degrade in about a year").

Art Show for Urns

Since I talked about ashes and disposing of remains last week, I'd be remiss if I didn't mention "From Here To Eternity," a gallery show that (according to a press release I just received) features "artful objects which can be enjoyed now but also serve a dual purpose as vessels to preserve those we cherish. When Fido, Aunt Tillie or Grandpa Ned pass on and all that remains are their ashes, this is the artful alternative to a funeral home offering. Included works are by clay artists Natalie Blake (Vermont), and Michael and Christine Adcock (California) along with a sampling of work by Dana Major (Chicago) and Mark Orr (Michigan)."

The show (at an unfortunately-named place called At the Gallery, 135 North Oak Park Avenue in Oak Park) runs through June 17.
 

Home Funerals/Caskets for Sale

A few days ago I joked about buying a casket and storing it in your home.  It looks like this actually happens, since caskets are available on eBay -- Jeff Jarvis provides the link. 

Mr. Jarvis also links to an interesting Washington Post article about home funerals. Some quotes from the article:

One benefit of a home funeral, advocates say, is price: A home funeral can cost only a fraction of a mortuary funeral, which typically runs about $5,000, according to the Funeral Consumers Alliance. The prices can go much higher.

But the most important benefits, advocates agree, are psychological. "There's a tremendous increase in healing and acceptance of death for the family to touch and see and be with the departed," Knox said. "It's very empowering at a time when you feel like everything's out of control."

Despite the violent deaths that crowd movie and TV screens and newspapers, in our culture "we never see actual death," said Joshua Slocum, the director of the Funeral Consumers Alliance, a national group that advocates for consumer protection in funeral affairs. "The institutionalization of illness and death has made us inordinately terrified."

Funeral Trusts, Part 2: A Checklist

In my last post on funeral trusts, I focused on some of the negatives associated with these types of arrangements.  However, I want to make it clear that I'm not objecting to funeral trusts for everyone; rather, I think that individuals interested in preplanning their funeral arrangements should perform some due diligence.  Perhaps this checklist would be a good start.

1. Do you want a "full" funeral, with a casket, viewing, etc. etc.? 

2. Do you have specific opinions about the type of funeral services you want?

3. Do you understand that your family members may still have to pay some expenses associated with your funeral and burial?

4. Do you anticipate that, at the time of your death, you will be living in the state and city where you current live?

5. Have you or will you take steps to let your family members and friends know that you have preplanned your funeral arrangements?

6. Have you decided whether the funeral trust will be revocable or irrevocable? Revocability is good if you might need the money in the future, but the trust will need to be irrevocable if it is being created as part of a "spend down" plan to qualify for Medicaid.  (Discussing Medicaid eligibility is beyond the scope of this article, but you may wish to start here for more information.)

7. Do you understand all aspects of the prepaid funeral contract, including the difference between the "guaranteed" and "non-guaranteed" portions of the contract?

Answering "yes" to these seven questions may indicate that prepaid funeral planning is right for you.  I think points 6 and 7 are particularly important, and may necessitate a call to an estate planning or elder law attorney.

Prepaid Funeral Trusts, Part 1

A few weeks ago I met with a representative from a local funeral home, to discuss what's called "pre-need funeral planning," also known as prepaid funeral planning or funeral trusts.  (The representative initiated the meeting, although I was more interested than I usually would be because I read this recently.)

How do funeral trusts work?

1. You sit down with a funeral home representative and review a list of funeral home goods and services (casket or urn, vault, memorial packages, etc.).

2. You pay for these goods and services now, as part of a prepaid funeral contract. 

3. The funeral home takes your payment and sends it to a third party to hold in trust (this particular funeral home uses Forethought Life Insurance Company).  Your funds will appreciate over time, and have a cash value similar to a whole life insurance product.

4. When you die, the third party releases your funds to the funeral home, to be put toward your bill.  Making the above payment now ensures that the funeral home goods and services you selected are paid for in their entirety.  That's why this portion of the deal is referred to as "guaranteed."  An example:

Sam Smith pays $8,000 for the guaranteed portion of a prepaid funeral planning arrangement.  The money has increased in value to $9,500 by the time of Sam's death.  If the cost of the funeral home goods and services at Sam's death is greater than this $9,500 amount, that's OK -- Sam's family members pay nothing more.  If the cost of such goods and services is less than $9,500, then Sam's family members should receive a check from the funeral home for the overage.

My concerns about prepaid funeral planning are as follows:

To begin with, I worry about being able to obtain comparable goods, especially with respect to caskets and urns.  If I sign a prepaid funeral contract (and choose a casket) today, but don't die for another 40 years, will the casket I chose still be available?  Probably not (unless I buy the casket now and bring it home for storage -- that certainly would make an interesting conversation piece!).  I am concerned that a comparable casket won't be available at my death, and that my family will have to pay additional money at that time (which would obviously defeat the whole purpose of this exercise).

Similarly, it's important to realize that a person who engages in prepaid funeral planning can't really do "one-stop shopping."  A number of funeral-related items (such as the fees for obituaries and death certificates, and for grave opening and closing) will not be guaranteed.  You can certainly put away money for these items, but if their cost at your death exceeds the value of the non-guaranteed portion of your contract, then your family members will have to pay additional money.

I'm also concerned about whether funeral trust moneys can be transferred from one funeral home to another.  The representative to whom I spoke said that this shouldn't be a problem intrastate, but she was less sure about how transfers would work between funeral homes in different states.  I can think of two scenarios that could cause some problems here:

• Mom sets up a funeral trust with a funeral home in Illinois, where she lives for most of the year, but dies in Florida, where she lives during the winter.  Mom's children would like to bury her using a Florida funeral home.
• Mom sets up a funeral trust with a funeral home in Illinois, but subsequently moves to Michigan to be near her children (or to enter a nursing home).  Mom then dies, and her children would like to bury her using a Michigan funeral home.

Some of the above concerns make me question the whole point of prepaid funeral planning.  In much of the sales literature for funeral trusts, references are made to "peace of mind."  I'm in full support of "peace of mind" to the extent that we are talking about letting your family members know, in advance, what type of funeral arrangements you want.  However, this type of peace of mind doesn't require the payment of any money right now -- it just requires you to communicate your wishes orally or in writing. I'm less certain about the idea of "peace of mind" that springs from paying your funeral bill in advance.  If one of my parents dies without a funeral trust, I will either pay for the funeral from estate assets, or pay for the funeral with my own assets and then seek reimbursement from the estate.  I don't consider either of these alternatives particularly disturbing to my peace of mind.

Later this week, I'll talk about situations where a funeral trust might be a good idea.

Funeral Arrangements for Soldiers

Army Staff Sgt. Jason Hendrix was killed in Iraq, and then buried next to his paternal grandfather (as per his father's wishes).  However, Mr. Hendrix's parents are divorced, and his mother is now suing to gain custody of his remains -- the story is here.   If Hendrix's mother, Renee Amick, is successful, Mr. Hendrix's body may be exhumed.  The probate court judge in the case has decided that this isn't a probate issue, and that Mr. Hendrix's father must pursue a civil case.

This case may lead to a law requiring soldiers to designate an agent to handle their funeral arrangements.  I'm normally in favor of this type of preplanning, but wouldn't a better option be to require a deceased soldier's family members to act with a modicum of common decency?

Ads for Cremation Society of Illinois, J.G. Banks

1. Cremation Society of Illinois.  Last Sunday (May 15, 2005), The Chicago Tribune had an advertisement for Cremation Society of Illinois.  The ad featured a young doctor (wearing scrubs, with a stethoscope around his neck), and featured the following copy:

"I see it all the time - no living will."

If recent events have made you rethink the importance of a living will, we can help.  Dealing with difficult issues is something we do every day, so we can give you expert guidance and keep you from making uninformed decisions.  We'll be happy to answer any questions regarding living wills and preplanning cremation services.  Call us today to request your free living will.

This ad troubles me for a couple of reasons.  To begin with, I'm a little bothered that the Society seems to be attempting to engage in the practice of law -- note the references to "expert guidance," and to the fact that they will "be happy to answer any questions regarding living wills."  My bigger problem is that they are dispensing bad advice.  As I've discussed previously,...

-Living wills apply to only one very specific situation (see this post);
-A health care power of attorney is a much better solution for end-of-life decisions (see this post); and
-According to two experts in the area of bioethics, "[t]he living will has failed, and it is time to say so" (see the end of this post).    

The Society is obviously seeking to appeal to people who followed the Terri Schiavo case, and to use the offer of a free living will to open discussions about cremation.  I have no problem with that in theory.  But the fact that the ad's legal advice is faulty makes me suspicious -- if the Society's "expertise" about cremation is similar to its expertise about living wills and other advance directives, its customers are in big trouble.

2. J.G. Banks' Secrets of Probate Profits.  The front section of this morning's Tribune features a full-page ad from J.G. Banks, who is referred to as a "legendary probate investor."  Mr. Banks is giving seminars in the Chicagoland area next week, to discuss his "Secrets of Probate Profits."  The idea appears to be that savvy investors can purchase real property owned by probate estates at deep discounts, and then flip this property for a hefty profit. 

The concept of buying properties in probate seems to be rising in popularity.  I am the administrator of a probate estate in Will County, and within five days of opening the estate, I was contacted by three separate investors seeking to purchase the decedent's house.  The appeal of this arrangement is that the sale can be completed quickly, without the need to pay a realtor's commission. 

But is this type of arrangement a good deal for an investor, or for an estate's beneficiaries? 

-For an investor, I suppose that you could make a fair amount of money by targeting certain probate estates, and offering up-front cash and a quick sale in return for a discount on the fair market value.  Of course, while Mr. Banks says that such a sale involves "helping beneficiaries settle the estate by purchasing its assets," some might view the practice as ethically suspect, since the type of people willing to accept less than fair market value for an estate's property are either ignorant of the law (see below), or desperate, or both. 

I guess my main question is, What does Mr. Banks bring to the table?  His ad states that "few people know how to find and purchase property from an estate."  Does the seminar focus solely on how to find probate estates that may own real estate?  If so, I can save you the time and trouble of attendance -- you can find these estates by:

(1) reading the obituary section of your local newspaper,

(2) reading the claims notices placed in your local legal periodical by attorneys for recently opened probate estates (in Chicago, this periodical is the Chicago Daily Law Bulletin); or

(3) visiting the local courthouse, and checking to see whose Wills have been filed recently (after a person dies, his or her Will must be filed with the local clerk).

You can then check at the courthouse to see if a probate estate has been opened for a decedent, and obtain names and contact information for the probate estate's executor/administrator and beneficiaries.  This will also usually tell you if the decedent owned real estate.

-For an estate's beneficiaries, the benefit strikes me as almost non-existent.  Mr. Banks states that "most beneficiaries want their money quickly," which is certainly true.  But he goes on to say that "[f]ifty dollars today is a lot better than the promise of $100 sometime off in the future," which strikes me as a fairly ridiculous statement on any number of levels. 

To begin with, probate estates are not typically administered over a 10-year or 20-year period; instead, we're usually talking about 1 year or possibly 2 years of administration.  If you'd prefer to have $50 now rather than $100 in a year, then you might want to spend some time learning about the concept of "the time value of money."

More importantly, probate doesn't really allow for an immediate distribution of property to a beneficiary.  In most cases, distributions aren't made from an estate until all debts and expenses are determined and paid, and this part of the process takes about six months from the date the probate estate is opened.  Given the fact that you aren't going to receive your money for six months anyway, why not place the property on the market with a realtor, and try to sell it for its fair market value?

I would also add that executors and administrators owe certain fiduciary duties to the beneficiaries of an estate, and that selling estate property at a discount would seem to me (absent other compelling facts) to be a violation of these duties.  That's why I didn't sell the house in the probate estate I'm administering to any of the investors who contacted me -- their offers (none exceeding $100,000 for a house valued at about $160,000) were simply unacceptable.

Legal Documents and Burial Instructions

Question: When I die, I would like to be cremated.  Should this request be inserted into my Will, or into another legal document?

Answer: I wouldn't recommend putting burial instructions in a Will.  Many people keep their Will in a safety deposit box or safe, thereby making it difficult to obtain at a moment's notice.  I know from experience that there's nothing worse than looking for a decedent's (temporarily missing) Will, trying to find burial instructions because funeral arrangement must be made a.s.a.p.

I would recommend putting your burial instructions in your health care power of attorney.  While a power of attorney is mostly concerned with issues arising during your life -- you use it primarily to appoint an agent to make health care decisions for you if you are unable to do so -- the health care power of attorney statute specifically grants an agent certain powers after the principal's death:

The agent is authorized: to direct that an autopsy be made... ; to make a disposition of any part or all of the principal's body pursuant to the Illinois Anatomical Gift Act, as now or hereafter amended; and to direct the disposition of the principal's remains.

(That comes from 755 ILCS 45/4-10(b)(5)). The burial instructions are most appropriately inserted in paragraph 2 of the Illinois Statutory Short Form Power of Attorney.  So that your agent can carry out your wishes, you'll also want to make sure that you do not indicate a termination date (such as death) for the power of attorney.

Three Things You Can Do For A Better Funeral

I've been talking a lot about funerals lately, and I wanted to share three practical things you can do for a "better" funeral ("better" here meaning consistent with your wishes):

1. Do some research.  You may want to start with advice from the Federal Trade Commission, which offers a consumers guide here.  Maybe the best step to take in researching funerals is to obtain a General Price List (GPL) from your local funeral home(s) -- this list will give you a sense of what services can be provided, and what they cost.  Here's what the FTC says in its brochure for funeral homes (cite):

You must give the General Price List to anyone who asks, in person, about funeral goods, funeral services, or the prices of such goods or services. You must give the GPL to such individuals to keep. The request for information does not have to come from a consumer or someone who wants to make funeral arrangements now or in the future. You must give a GPL to all persons who inquire about funeral arrangements. This may include competitors, journalists, and representatives of businesses, religious societies, government agencies, or consumer groups.

2. Write down your wishes.  This doesn't have to be a legal document, but it should be signed by you and dated.  Tell your family members and friends exactly what you want and don't want.  If you want the cheapest casket, say so.  If you want the most expensive casket, say so.  Do you want to be embalmed?  What music do you want played at the memorial service?  Do you even want a memorial service?  Needless to say, this type of document can be very helpful for your loved ones.

3. If you are concerned about the cost of funerals, consider joining a local chapter of the Funeral Consumers Alliance.  For instance, Chicago-area consumers can join the Chicago Memorial Association.  In return, you can obtain a cremation service or a simple funeral service for far less than it would cost through a regular funeral home. 

Jessica Mitford's "The American Way of Death Revisited" (the conclusion of my 2-part review)

(Continued)

My only real problem with the book relates to something Ms. Mitford doesn't discuss: the fine line between selling a needed service, and taking advantage.  It seems obvious to me that there are good funeral directors and bad funeral directors, but Ms. Mitford essentially places all funeral directors in the same (unethical) boat.  She mainly does this by quoting liberally from funeral director trade groups.  However, a trade group for funeral directors doesn't reflect the views of all funeral directors or even all of the group's members.  (For instance, I would hate to have the views of the American Bar Association, a group to which I don't even belong, attributed to me.)

Yet it appears to me that Ms. Mitford really does believe all funeral directors are improperly profiting from death.  If that's the case, then I wonder: where do we draw the line?  Are doctors unethical for profiting from illness?  And if Ms. Mitford truly believes there is something special about death -- something that makes it inappropriate for anyone to earn a living from it -- then isn't she guilty of sentimentalizing death in the same way that some funeral directors do?

Note that the above is a fairly minor quibble.  In my estimation, The American Way of Death Revisited is a must-read for anyone who has gone through (or will go through) the process of arranging a funeral for a friend or family member.  It manages to be horrifying and eye-opening and very funny (courtesy of Ms. Mitford's witty writing style), which is all you can ask for in an exposé.

In the coming weeks, I'll put up a couple more posts on funerals --  I'll investigate whether pre-paid funeral trusts are a good idea, and I'll talk about three tips for handling the funeral process.