Planning a funeral can be a daunting experience because there's usually some sort of a deadline, or multiple deadlines, and emotions are often running high. In addition, you'll often have family members working together who don't normally. It can be a tough time and families are sometimes permanently damaged. It's also a time in which you find out that some things you would have never thought of are very important to others and some things are very important to everyone.
I'm a huge advocate of pre-planning but not necessarily pre-paying. Many don't realize that you can do all of the pre-planning, at a time when you aren't dealing with deadlines and high emotions, but it doesn't mean you have to pay in advance.
Some of the problems with paying in advance are:
1) you won't earn any interest on money that's paid for a pre-paid funeral and if you lose out on interest for a long time, such as ten or twenty years, that's a significant amount.
2) family relationships change. For example, you wouldn't want to plan a funeral with a current spouse and carry out the funeral with a different current spouse.
3) some of the pre-paid funeral plans offered at some funeral homes are unreasonably expensive.
4) some of the pre-paid funeral plans are actually funded with expensive life insurance policies. Be careful about this one and always be sure to run decisions such as these by your financial advisor.
5) records can be lost. If you do choose to pre-pay, you absolutely must be sure that the person you choose to wrap up your estate is aware of the arrangements and knows how to find paperwork and receipts.
6) funeral homes can change hands or go out of business.
7) needs, wants, hopes, desires, can change.
Be sure to read my second article regarding the passing of a loved one to learn about things you'll need to consider in the planning of a funeral. It can be used as a checklist when the need arises and should help you get through the process a little easier.