Preparing Financially for a Child’s End-of-Life
While contemplating your child’s end-of-life is obviously emotionally difficult, it can also be financially overwhelming. Funeral, burial, and cremation costs can range from as little as $500 to as much as $10,000 or more. Many families, especially if they have dealt with a sick or hospitalized child for some time before death, simply do not have this kind of money available to them.
I understand very well how difficult it is to think about this topic, even when you know or suspect your child is dying. Personally, I couldn’t do more than formulate a general idea of what I wanted prior to my daughter’s death. My husband refused to even entertain the notion at all. But the more you can prepare in advance, the easier it will be when it actually happens, because you will suddenly have a thousand emotions on top of an extraordinary list of planning demands.
This article will provide information on preparing for these end-of-life expenses, finding assistance in paying them, and potentially reducing them.
Preparing in Advance
If your child has a life-limiting condition, it is wise to plan as far ahead as possible for funeral expenses. Most palliative care and hospice programs will be able to assist you in making these preparations.
There are several options for advance financial planning for end-of-life expenses. These include life insurance, irrevocable trusts and other methods of saving, ABLE accounts and special needs trusts, and funeral insurance or prepayment.
Life insurance is rarely available to children with life-limiting conditions, but it can help to pay end-of-life expenses. In general, most of the commercially advertised plans for children’s life insurance tend to be restrictive in nature, and may not even end up paying out. It may be possible, however, to obtain a small life insurance plan on your child through your employer, or to piggyback your child onto your own policy. If either is available to you without a health assessment of your child, it may be worthwhile to purchase life insurance for your child.
Another option is to create an irrevocable funeral trust. While you could just set aside money for your child’s end-of-life financial needs, these savings may make your child ineligible for Medicaid and other necessary benefits. Medicaid rules allow an individual to hold a small amount of money, typically about $1500, in an irrevocable trust that can only be used to pay for funeral expenses. This may be a good option for preserving benefits while still setting aside money along the way. Your palliative care or hospice program should be able to guide you to financial professionals able to establish these types of accounts.
With the passage of the ABLE Act in 2014, a new option is available to families. Parents can set up an ABLE account for their child, which can be used to pay expenses related to their disability, including funeral and other end-of-life expenses. These accounts do not affect Medicaid or other benefit eligibility, and will likely become an excellent option for savings for all individuals with disabilities. ABLE accounts should become available in 2015 in most states. Special needs trusts also offer the same eligibility-preserving benefits with many fewer restrictions than ABLE accounts. These accounts, however, are typically very costly to set up and may be out-of-reach for many families.
Finally, it is possible to buy funeral insurance or pre-pay for funeral expenses, often in installments. Contact your local funeral home or insurance agent for more information.
Assistance in Paying for End-of-Life Expenses
If your family does not have enough money to pay for end-of-life expenses, there are many possible avenues for assistance. These include state or county programs, funeral industry charities, indigency programs, other charities, and fundraising.
Most states or counties, and in some cases cities, have special programs to assist low-income families with funeral expenses. Many state Medicaid or other financial assistance programs will pay for part or all of these expenses. For example, in Illinois, Medicaid will pay up to $1,103 for a funeral and $552 for a cremation/burial to those receiving financially-based Medicaid for low-income families. Pennsylvania, Colorado, and several other states have similar programs. In other states, funds are distributed at the county level and the amounts vary by state and county. SSI does not assist with end-of-life expenses; however, those who receive Social Security Survivor’s Benefits may receive a small death benefit.
In some locations, funeral homes and associated funeral industry groups may provide charitable assistance for a child’s end-of-life expenses. These vary widely depending on the organization or funeral home, but may include payment plans, discounts, or cost reductions.
Most counties or cities also have programs in place for when a person who is indigent passes away and the family cannot or will not pay for their expenses. While some counties may pay for expenses as described above, others may arrange for direct burial without the input of family.
Numerous charities assist with funeral expenses. The most helpful tend to be religious charities, such as Catholic Charities or Jewish groups like the Hebrew Free Burial Association. These organizations may pay for all or part of your child’s expenses if you are unable to afford them. Contact your religious home, if applicable, for assistance. Your local hospice or palliative care program may also have information on additional local charities that pay for end-of-life expenses.
Finally, if you are unable to access any other end-of-life assistance, you may need to fundraise. Numerous families have used online fundraising sites to raise money for funeral expenses, and are often quite successful in doing so. Some families also sell their child’s medical equipment and supplies to cover funeral costs, though make sure you comply with all local and federal laws if the items were paid for by Medicaid or insurance.
Reducing End-of-Life Expenses
While the traditional American funeral and burial will cost at least $8000, it is possible to dramatically reduce costs without minimizing the celebration of your child’s life. In fact, many families are choosing to forego traditional funerals for environmental and other reasons. It is becoming much more common to use lower-cost methods to celebrate a child’s life, which may include cremation or a green burial.
Cremation: The easiest way to minimize costs, while also choosing an environmentally friendly method, is to opt for cremation. Cremation now accounts for more than 40% of end-of-life choices, and is expected to pass 50% in the near future. Direct cremation, without the use of a funeral home, costs from $500-$1000. Families can still hold a memorial service or celebration of life. If you elect to have a cremation viewing or use a funeral home for a service, the cost typically increases to about $3500.
Green Burial: Many funeral and burial costs are related to embalming the body, purchasing a casket, and purchasing a burial liner or vault. These costs can be eliminated by choosing a green burial, in which an individual is not embalmed or preserved, and is buried in a simple cardboard or wood casket, or even without a casket. In addition, green burials are much better for the environment, because there are no chemicals used and the casket is biodegradable. Green burials are gaining in popularity, and are becoming more widely available in some parts of the country.
Closed-Casket: The preparation of the body through embalming is one of the greatest costs involved, and can be completely eliminated by choosing a closed-casket funeral. Pictures of the child may be displayed on or around the casket.
Direct Burial: A direct burial, meaning burial with no embalming, visitation, or viewing, and in some cases no use of a funeral home at all, is available at a much lower cost. A separate memorial service or celebration of life (without a casket) of your choice can be held instead.
Mortuary School: If there is a local mortuary school, you may be able to obtain traditional funeral services, such as embalming, for a significant discount. Students are well-supervised, and the quality is usually equal to that of a regular funeral home.
Providing Your Own Casket: It is possible to buy your own casket, either online or through local companies. This practice may allow you to purchase something more child-friendly, and may reduce your costs.
Body Donation: Most medical schools and some private medical research companies accept body donations under certain circumstances. In most cases, it is best to explore this option in advance, as certain details may need to be worked out. Some states or programs do not accept children, and some will not accept the body of a child who has died at home. Most medical schools and companies will pay for eventual cremation or burial, and most hold a memorial service.
Memorial Service or Celebration of Life: Families have many choices when planning a memorial service or celebration of life. These can be very low cost, including holding a service at your home or a park, or very high cost, such as holding dual services at a funeral home and at a cemetery. Families can reduce costs by holding a celebration of life (typically without a casket) at any number of free or low-cost venues, including churches, parks, homes, restaurants, community centers or libraries.
While it is very difficult to contemplate financial matters related to a child’s end-of-life, thinking about them and your options in advance will likely make what is undoubtedly a challenging emotional experience a little easier.