The individual (grantor) selects the desired funeral services and specifies the funds allocated for those services in the trust agreement. Setting up an IFT involves working with a funeral home or a financial institution that specializes in such trusts. How to Set Up an Irrevocable Funeral Trust? The financial institution or trustee responsible for managing the IFT ensures that the funds are appropriately disbursed to cover the specified funeral expenses when the time arises. The grantor collaborates with the chosen funeral home to plan and arrange their desired funeral services, knowing that the funds within the IFT are secured for these purposes. This ensures that the allocated funds remain dedicated solely to funeral expenses. Once the IFT is established and funded, it typically becomes irrevocable, meaning the grantor generally cannot alter or cancel it. This includes specifying funeral service preferences, costs, and how the funds will be managed and disbursed. Trust AgreementĪ formal trust agreement is drafted, outlining the terms and conditions of the trust. This predetermined sum is set aside exclusively for funeral and burial costs.
The grantor determines the amount of funds to allocate to the trust. This is usually done in collaboration with a funeral home, financial institution, or an attorney specializing in trusts. The process begins with the individual (the grantor) deciding to set up an IFT.
Here’s a breakdown of how an IFT typically works: Establishment The functionality of an Irrevocable Funeral Trust (IFT) revolves around its purpose: to systematically allocate and safeguard funds designated for an individual’s funeral expenses. How Irrevocable Funeral Trust Works How Irrevocable Funeral Trust Works? This immutability ensures the safeguarding of funds solely for funeral arrangements, providing a layer of financial security for both the individual and their loved ones. The core characteristic defining an IFT is its irrevocability, meaning once established, it’s typically immutable and cannot be altered or canceled by the grantor.