Having difficult conversations about funeral costs

Talking about personal finances with anyone but the closest family members and friends is often complicated. When combined with perhaps the most taboo subject of all - the end of a loved one's life - this becomes a substantially more sensitive subject. No one likes to think about anything related to death, but some advanced planning for the aftermath of this tragic event is essential. That's especially true now considering how much things have changed recently related to end-of-life care and funeral costs. Families have a variety of new options at hand to help them plan for and finance memorial services, but there are new complications to this already delicate process, too.

Planning for funeral costs

According to statistics from the Funeral Consumers Alliance, the average cost of a traditional funeral and cremation today stands at around $6,260. However, the total bill for these services can range widely - the FCA reported that a traditional burial service as part of a funeral increases the average total cost to around $10,000. As with any other large purchase one would make, shopping around and comparing options can lead to savings. Of course, in the case of funeral services, this is much easier said than done.

In a study conducted by the FCA, the trade group argued that budgeting for an affordable funeral could be difficult for practical reasons, not just emotional ones. A review by the FCA of more than 200 different funeral homes in 25 U.S. cities revealed that nearly three out of four businesses did not list any prices for their services on their website (if they even had one). The U.S. Federal Trade Commission requires funeral services businesses to provide price quotes to consumers over the phone or in-person if asked, but does not currently mandate price transparency online. Therefore, our first instinct to compare funeral prices using Google may not prove successful in many cases. This only bolsters the case for doing as much as possible to research in advance or potentially making a deposit with a trusted provider well before the service is even scheduled.

What to know about crowdfunding and memorial services

The loss of any life is tragic and untimely, but losing a friend or family member without warning only amplifies these concerns around funeral planning. Fortunately, the internet has proven a helpful asset in this regard with the advent of crowdfunding services.

Anyone who spends time using social media has probably seen their friends or family share links to crowdfunding platforms like GoFundMe and Kickstarter to finance any number of objectives, from designing a new product to pitching in for the local high school football team. Increasingly, some of these services have become a common avenue for friends and family of someone who has recently passed away to fund a memorial service, especially if it happened suddenly or when the family is of limited means to pay for a funeral. Crowdfunding platforms offer a quick and easy way for users to raise money from their social network in these cases. GoFundMe estimated that out of the millions of campaigns funded through their service in 2017, 13 percent were listed as "memorials" and intended to help cover costs related to funerals, burials, end-of-life medical expenses and related services.

CrowdfundingCrowdfunding has emerged as an attractive, although unfamiliar option for those struggling with funeral expenses.

Crowdfunding a memorial fund has provided a small bit of relief to many families in a particularly painful time. Still, this relatively new method of paying for funeral services comes with its own risks that few may be aware of. The possibility that users could be defrauded through the use of an illegitimate crowdfunding website is one of the more obvious concerns. But Joshua Slocum, executive director of the FCA, said in an interview with The New York Times that crowdfunding memorial campaigns may be targeted by dishonest funeral home directors. Since the web pages for these funds are often publicly available and can show the exact amount raised, it's not hard to imagine a funeral business quoting memorial beneficiaries a higher price to capitalize. The bereaved themselves may also be tempted to ask for more money than necessary, or more than can actually be raised. That could pose problems if the crowdfunding effort comes up short and payments for funeral services are due. In addition to all of these concerns, there may be fees charged by the crowdfunding service itself that need to be taken into account.

Another major differentiator for crowdfunding platforms can work as a benefit and a risk for families who use them to fund memorial services for a loved one. Unless they specify otherwise, crowdfunding campaigns are designed to spread quickly and widely over the internet as people share the link on their social media pages. That allows news of the fundraising effort to reach many more people than the person's circle of friends and family. In some cases, the story behind the memorial fund could get picked up by TV and print news outlets and multiply its reach even further.

This has become a common phenomenon in news stories that have garnered a national following, but has had a particularly significant impact in many small communities. The New York Times reported one recent case out of the small town of Comanche, Texas, where the principal of the town's high school of only 300 students died suddenly of a heart attack. A GoFundMe campaign established in his name received more than $25,000 from 276 people in a matter of days. The public reach of crowdfunding campaigns certainly helps families that face financial difficulties, but it may intrude on their privacy more than they initially expected.

All of this speaks to the multifaceted issues concerning funeral finances, even in our modern age of quick and easy communication thanks to technology. When possible, budgeting for funeral expenses well in advance may be the best way to mitigate most of the risks associated with financing and planning a memorial. When other solutions like crowdfunding are used, financial experts advise caution and as much knowledge of the risks and costs as far in advance as possible.

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