I found a very interesting statement on a website that is targeting sales agents. The website http://insurancenewsnet.com is promoting a webinar, teaching sales agents how to double their income by selling funeral trusts. The stunning fact in the article is that sales agents get as much as up to 16% commission for the "sale" of "Irrevocable Funeral Trusts". In my opinion, that is a lot of money for an agent who has nothing else to do but to sell a ready-made-legal-document combined with a life insurance.
Funeral Trusts are an legal instrument designed to shield your final expenses from nursing home-claims. In 2007 Chuck Jaffe of Marketwatch has criticized the sale of those funeral trusts in an detailed article that also explains what funeral trusts are and why they can be useful in some cases. He also stresses that from the viewpoint of a financial planner those trusts are commonly underperforming. I don't want to repeat Chuck here. So if you need further information on the issue of funeral trusts read the article.
Irrevocable Funeral Trusts can also be set up by your trusted estate planning attorney. That way you could choose the trustee yourself and you wouldn't have to trust an insurance company (that actually pays up to 16% commission out of your last expenses!) to administer your trust. A lawyer would also perform a legal check and explain other options to you. Therefore sales-persons, who are truly experts in making their product seem perfect for you should be treated with care. Think twice and if in doubt, consult a lawyer, who is the professional with regard to legal instruments like Funeral Trusts.
