Tag Archives: estate

Estate Planning – How to Get Organized

At Cremation Society of America, we see all-too-often clients who had failed to properly plan for the day that is inevitable for all of us: the day that we pass away. It’s never a pleasant subject and one that most of us would prefer to address at a later date. What happens if that “later date” never arrives?

Sound Estate Planning and gathering of your important documents might very well be the most appreciated final act that you could do for your family. Let’s explore some Estate Planning steps that you can take.

The Need for Estate Planning

Much like a Will, Estate Planning organizes the financial, legal and medical aspects of your life for those who will survive and succeed you. As a matter of fact, a Will is a component of a well-rounded Estate Plan.

As with anything pertaining to legal documents, we at Cremation Society of America strongly suggest that you consult with an attorney who specializes in estate planning and probate issues. This attorney has a fiduciary duty to give you the guidance and representation that you will need to put your estate in order.

Where to Begin?

The best place to start your estate-planning project is to take an inventory of everything of value that you may own,  possess or of which you have a stake or interest. Here are some items that you should include in your list:

  • Your Home/Deed
  • The Deeds to any properties/real estate that you Own
  • Retirement Plans, including 401(K), Pensions, Individual Retirement Accounts (“IRAs”), Social Security benefits, Stock Holdings, etc. – be sure to include any online login credentials needed to access these accounts online
  • Life Insurance Policies or any other vehicles that may pay out benefits upon your death – be sure to include any online login credentials needed to access these accounts online
  • Health Benefits including private insurance, pension benefits, Medicare, Medicaid, Veterans Administration Benefits – your spouse or family may be entitled to these benefits in the event of your death
  • Bank Accounts, Investment Accounts, Stocks, Bonds, etc. – be sure to include any online login credentials needed to access these accounts online
  • List all valuables – jewelry, art, etc.  Be sure to take pictures and keep the pictures in a safe deposit box or in a cloud storage solution that a family member can access.
  • All liabilities such as mortgages, loans, credit cards, anything for which you owe money and may lead to a creditor seeking repayment from your estate

Create or Update Legal Documents

Meet with your attorney to create or update legal documents that will further protect your estate upon your passing. Your attorney’s recommendations may include the following:

  • A Will – include an updated list of beneficiaries
  • Healthcare directives/documents such as Power-Of-Attorney and/or a Living Will
  • Creation of a Trust(s)

Arrange for Long-Term Care

Most people forget that you can also plan for your long-term medical care as part of your estate planning. YOU can set aside assets to pay for your medical, housing, nurse care and related costs up to point of your passing. Be sure to contact a health care planning professional to review your options.

Arrange for End Of Life

Pre-plan your end-of-life arrangements, whether burial or cremation, services, location, cemetery plot – everything that you want in place upon your death because these are questions that only YOU can answer.

Click the link below to download the Cremation Society of America Cremation Planning Guide

Make Sure Your Family can Access Everything that you Collected

All of the work you’ve done above will be for naught if you did not make arrangements for your loved ones to access all of the information that you’ve gathered in your inventory. Here are a few steps to keep in mind:

  • Maintain a list of all current usernames and passwords. Then, make sure that you place that list somewhere where your family or attorney can access it
  • Keep important and legal documents in a secure location such as a safe, vault or safe deposit box. You may also keep these documents with an attorney. Regardless of where you store the documents, be sure to give your family a way to access them
  • Periodically review your documents to keep them up-to-date

As you can see, Estate Planning is another way for you to enjoy peace of mind that your wishes will be honored after you’ve passed away. This is much the same way as how Pre-planning your Direct Cremation delivers peace of mind during a troubling time for your family and friends.

Please contact CSA for more information regarding our Cremations services as well as family resources. We look forward to being of service to you and your family.

Are Direct Cremations Tax Deductible?

We at Cremation Society of America are often asked by our clients whether Direct Cremations are tax deductible. The short answer for Individual Taxpayers is No. But this merits further explanation. We also strongly recommend that you consult with your tax specialist.

These days, the median cost of a funeral can be $8,000 with many exceeding $10,000. Of course, a Direct Cremation is far more affordable option for a loved one. Even so, some families, upon advice from a trusted resource or due to reading an article, etc. are tempted to deduct funeral expenses on their personal income tax return. We suggest that you resist this temptation as you run the risk of an IRS audit and the heavy fines and penalties that come with it. The last thing you need after the loss of a loved one is to endure an IRS audit!

Estates: Claiming a Deduction

Funeral expenses are only deductible if they paid by a previously-established Estate. An Estate can be defined as everything comprising the net worth of an individual, including all land, possessions and other assets r that the individual owns or has a controlling interest in. As such, individuals cannot claim funeral expenses on their income tax returns (IRS Form 1040) and funeral expenses cannot be itemized or deducted on the decedent’s final tax return.

Per the IRS ‘Miscellaneous Deductions” guide (Publication 529), “Burial or funeral expenses, including the cost of a cemetery lot” are nondeductible. Please also keep in mind that if you pay funeral expenses for a loved one or other individual, you cannot treat those expenses as a medical deduction on your tax return.

Estate: Claiming a Deduction

The appropriate way to deduct funeral expenses is for the Estate to pay the burial costs and then claim the deduction for estate tax purposes on IRS Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return). The funeral expense deduction is one of several deductions that are used to determine the taxable estate, resulting in the taxable amount of the Estate. The executor or administrator of the estate is responsible for filing IRS Form 706, and such executor/administrator must attach a death certificate per the Form 706. The executor/administrator should notify the family involved in the Estate as well as those making funeral arrangements that reimbursement for funeral expenses may be affected by IRS regulation and other laws. Again, we cannot stress enough that you consult with your Tax Specialist and possibly an Estate Attorney for guidance and advice.

Can any costs be Deducted?

Itemized funeral expenses that may be eligible for deduction may include but not be limited to:

  • Cost to purchase a burial plot or mausoleum space and any reservations
  • Headstone or grave marker and related expenses
  • Funeral director fees, embalming and body preparation charges
  • Ceremony or viewing/visitation expenses, including – flower arrangements, food, audio visual presentations, clergy honorarium
  • Casket costs and interment fees
  • Transportation expenses such as transporting your loved one to and from the funeral home, hearse/limousine and driver costs

If the decedent’s Estate is reimbursed for any funeral costs, the reimbursement must be deducted from total expenses before claiming the deduction on Form 706 – this includes any federal payments such as Social Security or Veterans death benefits.

The person or family representative responsible for making the funeral arrangements and paying the resulting expenses should retain and preserve all invoices, receipts, contracts, agreements, etc. Note that the Estate may not receive full reimbursement if the funeral costs are deemed unreasonable, or the Estate becomes insolvent. This is why Pre-Planning for funeral or Cremation services can be so very helpful to your family during such a challenging time.

Do you have questions about arranging a Direct Cremation and whether any aspect can be tax deductible? Please feel free to give us a call. One of our Direct Cremation Specialists is here for you.