What Banks Offer Burial Accounts for Final Expenses?

Planning for end-of-life expenses is a significant concern for many individuals and families. Funeral arrangements can be substantial, with average expenses ranging from $7,000 to $12,000 for a traditional burial and $6,000 to $8,000 for cremation. These figures often exclude additional costs like burial plots, headstones, or flowers. Proactively setting aside funds for funeral expenses helps alleviate the financial burden on loved ones and ensures final wishes are honored without imposing unexpected costs on their families.

Understanding Dedicated Funeral Accounts

While many individuals search for “burial accounts” with banks, it is important to understand that this term does not refer to a standard, explicitly named product offered by most traditional financial institutions. Instead, people often seek a dedicated financial arrangement that ensures funds are readily available for funeral expenses upon their passing. The goal is to create a protected fund that can be accessed quickly by beneficiaries to cover immediate costs.

Individuals often desire features such as protection from creditors, avoidance of the lengthy probate process, and straightforward access for a designated individual to pay for funeral services. Funds held in an estate, for instance, cannot be accessed until the probate court authorizes distribution, which can take several months or even over a year. Some smaller financial institutions or credit unions might offer a product explicitly named a “Burial Reserve Account” or similar. These function like specialized savings accounts or certificates of deposit where a funeral home is often named as beneficiary, and funds are disbursed upon presentation of a death certificate. However, these are not uniform offerings across the banking industry.

Bank-Provided Options for Funeral Planning

Traditional banks offer several practical ways to earmark funds for funeral expenses, even if they don’t explicitly brand accounts as “burial accounts.” These options leverage existing banking products to provide varying degrees of control, accessibility, and probate avoidance. Understanding how each works can help individuals select the most suitable arrangement for their needs.

Payable-on-Death (POD) Accounts

A Payable-on-Death (POD) account is a popular and straightforward method to designate funds for a beneficiary outside of the probate process. To set up a POD account, an individual instructs their bank, through a beneficiary designation form, that funds in a checking, savings, or certificate of deposit (CD) account should be paid to a named beneficiary upon their death.

While the account holder is alive, they retain full control over the funds, including the ability to withdraw money, change beneficiaries, or close the account. The named beneficiary has no access to the funds during the account holder’s lifetime.

Upon the account holder’s death, the beneficiary can access the funds by presenting a certified copy of the death certificate and proof of identity to the bank, bypassing the probate process. This direct transfer ensures money is quickly available for funeral costs. POD accounts are covered by Federal Deposit Insurance Corporation (FDIC) insurance up to $250,000 per depositor, per institution, per ownership category.

Joint Bank Accounts

Another option involves establishing a joint bank account with a trusted individual, such as a family member, who would be responsible for handling funeral arrangements. With a joint account, both parties have equal ownership and immediate access to the funds. Upon the death of one account holder, the surviving joint owner assumes full ownership of the account, provided it includes “rights of survivorship.” This arrangement allows the surviving individual to access funds without probate, which can be beneficial for funeral expenses. However, this option carries risks, as either account holder can withdraw all funds at any time, and the account may be subject to the creditors of either joint owner.

Dedicated Savings Accounts or Certificates of Deposit (CDs)

Individuals can set aside money in a standard savings account or invest in a Certificate of Deposit (CD) for funeral expenses. While these accounts do not offer the same direct beneficiary designation as a POD account, they provide a secure place to save funds.

Savings accounts offer liquidity, allowing access to funds at any time, though they may offer lower interest rates. CDs typically offer higher interest rates in exchange for keeping funds deposited for a fixed term.

For both savings accounts and CDs, funds held solely in the deceased’s name would be subject to probate, meaning access could be delayed. However, if a CD or savings account is set up with a POD designation, the funds would bypass probate.