How do I begin the process of working through my grandparents final arrangements?

1 answer | Last updated: Sep 14, 2017
Smj asked...

I am getting my grandparents final arrangements together. I am wanting to set up a trust that will appoint five people to handle all assets. Is a trust the best way to have everything set up?

Also, my grandparents have life insurance. I was thinking of setting up burial contracts but after reading about how funeral homes take the remaining money I'm just no so sure. They have burial plots already. I'm just not sure if I should have them sign the life insurance over to the funeral home and list the trust as beneficiary (is that possible?) or do I keep my grandmother as the owner? I just don't want to have to deal with the funeral. The insurance is in place, just not sure how to set it all up in the end. My grandparents do not want to get outsider much involved so I am left with taking with professional (funeral directors, insurance companies) and everyone has something different to say.

Also can I just type up a paper and get it notarized and use that as a way to handle my grandparents assets? There is one house (with mortgage), one car, 4 bank accounts, very little debt (credit cards), tons of home items, 2 whole life policies (would like to use towards final expenses). I heard a will is very complicated but the insurance is what gets me the most.

Did I mention... children (that will make the process awful--if i do not get everything locked in and in writing). My overall objective is to find the best way to pre-arrange funeral services (without being ripped off and using insurance to do that), getting the leftover money back to the trust (can a trust be named as beneficiary?), so then that the trust may handle all of expenses.

Thank you very much. I think I just aged a bit from this email. Thank you. Be blessed. ;o)

Expert Answers

Barbara Steinberg is the CEO and founder of BLS Eldercare Financial Solutions, which specializes in helping families pay for long-term care for their loved ones. A registered financial gerontologist, she speaks regularly on the topic of paying for long-term care and is a financial expert for

You are asking about two separate, but related, issues. 1. How to pre-pay for final arrangements? 2. What is the best way to transfer assets after death?

Pre-paying for final arrangements ensures that resources are available when needed. One option is to pre-pay the funeral at the funeral home of your choice. The funeral home will itemize the services and items that your family desires and give you a price. If you select this option, the price is locked in. The entire cost of the final arrangements will be covered; there will not be any money left over.

Another option is to deposit a sum of money into a pre-paid final expense trust. This money can be used at any facility for any final expenses, e.g. funeral, cremation, flowers, food, etc. If all of the funds are not used, the left over money usually goes to the estate of the deceased. However, if the deceased received assistance from Medicaid for long term care, Medicaid will need to be reimbursed before any left over money is given to the estate.

Instead of paying cash for either of these options, you may exchange one or more life insurance policies as payment. The advantage of this "roll over" is that you do not have to pay income tax on any increase in policy value. If you were to cash out the policy instead, any increase in policy value, above the premiums paid, is taxable at ordinary income tax rates. If the policy pays out after death, the proceeds are not taxable.

There are different ways to transfer assets after death. You reference wills and trusts. A will does not have to be complicated. Your grandparents can each create a will to provide instructions for distributing their estates after they pass away. An estate includes all of a person's personal items as well as financial and real property (e.g. the house). Each of them will appoint a representative to distribute his or her estate to the beneficiaries named in the will. Since you have assumed responsibility for making their final arrangements, it is reasonable for them to appoint you as their representative, also called the executrix (for a woman). This means you have a fiduciary duty to distribute the estate to the beneficiaries (i.e. the 5 people you mentioned) as specified in the will.

As you indicated, a trust is another vehicle for distributing assets upon death. A trust can be created either during the grantors' (your grandparents) lifetimes or upon death. In this case, the representative for the trust is the trustee, appointed by the grantors. Again, you are the logical person to be the trustee. As trustee, you will have a fiduciary responsibility to distribute the property in the trust to the beneficiaries named in the trust (the 5 people). A trust may be established in addition to a will. Whether or not it makes sense to set up a trust depends on the assets, the family's wishes and other circumstances unique to you situation.

Legally, you can type up your grandparents' wills and have them sign in the presence of a notary. However, I suggest you seek out the help of a professional to advise and guide you.