Dear Kirk: As morbid as it sounds, I’m considering pre-planning my own funeral—to save my family the cash down the line, sure, but also to guarantee they don’t spend money on any unnecessary “extras.” What kind of expenses am I looking at for the entire funeral? Is any of it tax deductible?

Kirk Says: If you are going to pre-plan and prepay your funeral expenses, take time to understand the risks you’re taking when you do this. When you prepay, where is the money being held, and who is holding the money? Most of the time, it’s put into a trust account or used to purchase life insurance on you by the funeral home. But what happens if the funeral home goes out of business or changes ownership?

There are plenty of horror stories of funeral homes misappropriating the money designated for prepaid funerals, in which case the very thing you were trying to accomplish—simplifying things for your family upon your death—becomes anything but simple for them. Funeral homes are required to disclose to you what is going to happen to the money, and different states have different rules governing the amount of cash that must be maintained in the prepaid funeral trust.