What is an Irrevocable Funeral Trust?

Funeral trust
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An irrevocable funeral trust can help in paying for memorials and burials.

People set aside money for a lot of things.

Many save for tangible items like a car or a home.

Others set aside funds for events or experiences like weddings, vacations, or education.

According to a recent Yahoo Finance article titled “Pros and Cons of an Irrevocable Funeral Trust,” fewer people prepare for the expenses of their own funeral and burial arrangements.

A funeral trust sets aside money for burial costs.
A funeral trust can cover expenses for burial plots and headstones.

Although thinking about death is unpleasant, all of us are mortal.

Consequently, death is unavoidable, whether prince or pauper.

Even for celebrities.

It can also be quite costly with funeral and burial expenses.

An irrevocable funeral trust is a helpful tool for preparing for these events and their associated costs.

What is this exactly?

This trust is a legal entity to facilitate funding of end-of-life expenses.

A funeral trust fund is established using the money you contribute.

Once the money is placed in the trust, the entity owns it and holds it until you die.

After your death, the funds will be released to pay for any burial, funeral, and end-of-life expenses.

Because it is an irrevocable trust, it will require another individual to serve as the trustee.

In this instance, the trustee would be selected by the funeral service company or insurance company used to set up the trust.

Typically, the only funds this irrevocable funeral trust will hold is a single life insurance policy.

The trust both owns the policy and is named as the sole beneficiary.

After you die, the policy payout will be distributed to the trust for funeral or burial expenses.

In some instances, the irrevocable funeral trust will designate a funeral home as the beneficiary of the trust when the business has agreed to a specific sum.

Does a funeral trust have to be irrevocable?


It is possible to have a revocable funeral trust.

With a revocable trust, you retain control of the funds while alive.

The trust can be amended or terminated at any time.

The irrevocable trust surrenders control of the assets to the trust.

You no longer own the funds.

Why would an irrevocable trust be beneficial?

It earmarks the funds permanently to ensure funeral costs will not burden your loved ones and is an authorized use of funds should you ever apply for Medicaid to pay for your nursing home expenses.

Talk with your estate planning attorney or an elder law attorney (i.e., if Medicaid is on your radar screen) about whether a funeral trust or other tool will best meet your needs and goals.

Reference: Yahoo Finance (April 29, 2023) “Pros and Cons of an Irrevocable Funeral Trust”

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