FINAL THINGS: Pre-Planning

In this episode, host Ric Shields and guest Mike Shipman discuss the importance of pre-planning for end-of-life matters. Shields emphasizes the need for individuals to prepare themselves and their families for their eventual passing, and the importance of discussing final arrangements. Shipman, a certified senior advisor, aftercare administrator, and benefits professional, shares his expertise on the topic, discussing the importance of advance planning, the differences between wills and trusts, and the potential financial savings for heirs and beneficiaries. They also discuss the importance of designating beneficiaries for life insurance policies and the potential complications that can arise if this is not done. The podcast ends with a reminder of the importance of spiritual preparation for the end of life.

Transcript

FINAL THINGS: Pre-planning
GUEST: Mike Shipman
S3, E24 

Ric Shields (00:00):

Welcome to the DoorWays® Ministry Network podcast.

(00:11):

Thanks for joining us. I'm Ric Shields, your host and the director of the DoorWays® Ministry Network.

(00:16):

When I served as a hospice chaplain several years ago, it became obvious to me that there is a tremendous lack of willingness or understanding of how people can prepare themselves or their families for the day when we leave this world and enter eternity. So, for the next few weeks, I'll be discussing the topic of final things with a number of professionals.

(00:37):

In the weeks ahead, I will interview a physician, a pastor, a funeral director, a hospice chaplain, and a grief counselor. I hope we'll all feel better prepared as we plan to help our families at a time that will be one of the most challenging times they will ever face.

(00:53):

I still remember the time when I asked a couple if they'd made any final arrangements. They'd been married over 50 years, and one would think they understood the importance of the idea, and they told me, "We plan to die at the same time. We've heard stories about that happening, and that's what we're praying for."

(01:09):

Listen to me, friends, if that's what you've been thinking or hoping could happen, that is not a plan. And even if it were, there are several complications that make that a good idea for you, but a terrible, expensive and complicated event for your surviving family members.

(01:28):

I hope you listened to our previous episode when I spoke with Mike Shipman. Mike is a certified senior advisor, aftercare administrator, and benefits professional. We spoke about final things and the importance of advance planning. Mike has spent the past 40 years helping families avoid the unnecessary expense and hassle of probate last week. In addition to discussing the need to share things like passwords for telephones and for social media accounts and for financial and investment accounts, we spoke about the differences also between wills and trusts. If you listened to that podcast and acted upon some of the information we shared, you could potentially save your heirs and beneficiaries hundreds, if not thousands of dollars when the time comes for them to settle your estate.

(02:21):

Today, I'm continuing my conversation with Mike Shipman as we talk about pre-planning. Not only about final expenses, but what your wishes may be concerning a memorial service or the final disposition of your remains. We'll also chat about that and the importance of the assignment of beneficiaries. So, let's get into our discussion.

(02:41):

Mike, we spoke briefly last week about the term right of survivorship. You mentioned it is especially important for that to be included in a warranty deed, for example, but it seems to me it should also be true for our financial accounts. Is that correct?

Mike Shipman (02:55):

Oh, that is correct. You, you don't. Like your bank accounts. My bank accounts. I have four different bank accounts, and I have a one particular child on all four of those accounts as payable on death. She is not on the accounts as a co-signer, so nobody has to worry about her stealing money. She is on the signature card of the safety deposit box, but does not have a key to it, so she can access that safety deposit box upon the death of both of us. And with her being payable on death on the bank accounts, all she has to do is show the bank certified death certificates, proof of identification and, and draw all the money out of the accounts.

Ric Shields (03:50):

You know, you also mentioned passwords and, and locked phones. How important those are because some phones, you almost, you've got to get the FBI involved to unlock some of those.

Mike Shipman (04:03):

Phones. Oh, that is true. That is true.

Ric Shields (04:05):

Yeah. And there's also some social media accounts, for example, that you can, you can actually name a legacy contact for you and, and those are important things for people to remember as well. Make certain that there's a way that people can access even your social media.

(04:25):

Hey, hey, listen, I don't have anything to hide, Mike, and I think you're probably the same as me. So, my wife already knows all of -- well, I've told her my passwords, whether or not she remembered them. I'm not certain. I've got them written down as well, but I've got nothing to hide. But still, it's important for us to make sure that even if we're not trying to hide things, we're still trying to secure things as well.

(05:03):

I'd like to discuss some things like the importance of pre-planning, and also look at some of the financial issues people should consider. Let's begin with pre-planning. What should people pre-plan and what do we need to know

Mike Shipman (05:16):

Well on pre-planning for final expenses, those that talk about it ahead of time and make all those decisions written down, so on so forth, tend to spend less money when a death occurs than those that are just suddenly faced with it. It just, at the funeral home, I see it over and over, you know, Johnny passes away and Mary the wife comes in with three kids and say, one of the kids lives several states away. That child gets involved in the decision making, picking out merchandise. For instance, we had one where the one daughter wanted mama to buy this casket that was $8,500, and mama had already picked one out. That was $2,400. The daughter pitched a fit and she got her way, and mama bought the $8,500 casket. The funeral was over with, and the daughter moved back several states away, and mama was left with a horrendous bill.

(06:29):

I try to talk people out of those kind of situations because when a death occurs, the income level is going to drop, you know, especially if the husband and wife are retired. Like for instance, if I died today of basically the social security amount coming in monthly is going to be cut in half. You know, if I draw $2,000 a month social security and my wife draws a thousand, she'll basically get $2,000 a month. So, it's a financial shock, and most people don't know that. So, by planning ahead, you know, you can go to a funeral home, pick the stuff out, write down where you want the funeral, your cemetery property and those kind of things.

(07:19):

So, you can prepay it so that if you prepaid, it guarantees the price will never go up. You don't have to prepay it, but at least having the information on file at the funeral home. Like today, we, I took a death call of a gentleman that I visited with about eight years ago.

(07:41):

Had all of his information written down, his cemetery, his contact family contact information. He did not pre-pay it. Price wasn't guaranteed, but we knew exactly what casket he wanted and what cemetery they were going to use, and those kind of things.

(08:00):

It's equally as important as, you know, doing trusts and wills. It's just another form of planning life's planning sessions. You know, just like when you plan to get married and those kind of things. And most funeral homes will tell you that out of 10 deaths, four of them are under the age of 60. So, you know it especially happened during Covid. So, it's important to have all those items in place, financial and final expense.

Ric Shields (08:35):

Mike, if someone pre-plans and then they want to change their mind on anything. Maybe they say, "You know, I was planning a complete burial, but I think I'm going to go instead with a cremation." Are those funds able to be refunded to them or they've pre-planned and they just changed their mind and they're locked into that price?

Mike Shipman (08:56):

Good question. Okay. Happens quite often. Somebody comes in to prearrange and pays for a $10,000 funeral. Whether you pay for it up front or set it on payments, it's immaterial. The funeral price is guaranteed, and then down the road, the family decides to do cremation. Well, upon the death of that person, those excess funds are refunded back to the family. That is state law and it's state law in all the states. What happens on a pre, on a pre-arrangement is when a death occurs, we send the itemized bill signed by a family member to the company holding the money. The company compares the bill to the pre-arrangement. If there's more money in the account than the funeral costs, that is refunded back to the family. And those items are highly controlled by the state. So, the funeral home is not going to keep the excess funds, and you're not going to lose the excess funds,

Ric Shields (10:06):

But you can also make changes. For example, if you've moved and you've decided that you don't want to be buried anymore in Broken Arrow, but you want to be buried in Salt Lake City or something, you can make those changes as well. You may be subject to a different price. As you just mentioned, those funds are pretty well controlled, regulated in each of the states. But changes can be made in all of these plans. Is that correct?

Mike Shipman (10:33):

Yes, that's correct. However, there are some states that the laws are a little bit different. Like if you're, if you're living in Florida and you prearrange in Florida and you become 98 years old, and your daughter that lives in Tulsa moves you to Tulsa so she can take care of you and you die here. That funeral home in Florida is only mandated to refund the money you paid. They will keep the excess interest that is earned on the pre-arrangement. We had a case where one of my neighbors, they moved her mother from Florida to Tulsa, and she had paid for a cremation 30 some years ago. And in her account in Florida, she had about $3,200. She actually paid $800 for that cremation. The funeral home in Florida sent $800 to the, to our funeral home, and kept all the interest. So, it can get a little bit tricky there. Florida is one of the worst. I believe Tennessee is another one.

(11:51):

So, you know, you, you always want, when you prearrange a funeral, you always want to use a funeral home that places your money with a funeral home insurance company and does not put it in a bank trust account. All the horror stories that you hear about missing funds happen with funeral homes that place the money in a bank account and not with an insurance company, a funeral home insurance company. If your money's with a funeral home insurance company, you can move anywhere in the continental US and it's easily transferred with a phone call. Happens all the time. We receive a lot of -- my mother-in-Law, for instance, prearranged her funeral in Chicago. She had a heart attack when she was 60, thought she was going to die, paid for her funeral, and we moved her to Broken Arrow at the age of 70, and she died at 97. And we did the service here, and the funeral home transferred the money that was with an insurance company from Chicago to us, all the funds. So, you, that's something you need to discuss with your local funeral home. How do you handle the money? We pay you if they say we put it in a trust account, you need to get up and walk out.

Ric Shields (13:25):

You are listening to the DoorWays® Ministry Network podcast. I'm Ric Shields and I'm speaking with Mike Shipman. Mike is a certified senior advisor, aftercare administrator, and benefits professional. We're discussing the topic of final things and the importance of pre-planning.

(13:43):

Mike, the prices of everything have gone up. I mean, just go to the grocery store. Try to buy a vehicle today. It's crazy. And I'm assuming the cost of funerals has also increased with everything else. And so, if a person were to consider the average cost of a funeral today, which, you know, include a typical burial and visitation What would you consider to be the average cost of a funeral today?

Mike Shipman (14:16):

The average cost in this section of the US is basically between $9,500 to R$11,000. If you already own cemetery property, when a sudden death occurs and there's no planning whatsoever, it's going to be a minimum of $15,000 because the surviving spouse, if there is one, is going to buy two grave spaces side by side. And they're not counting the marker, but the grave space is the opening closing of the grave flowers and those kind of things in the funeral. They're going to spend $15,000. If a person is a veteran, they need to consider using a national cemetery because the government will pay for the grave space and the transportation to the cemetery. The government will pay for the outer burial container to put the casket in. The government will do the opening and closing and provide a marker for both the veteran and his wife, if any. So typically, a death using a national cemetery, that person's going to spend about $6,500 instead of $10,000.

Ric Shields (15:45):

That's a big difference, isn't it?

Mike Shipman (15:47):

Yes.

Ric Shields (15:47):

And we're grateful for those who have served, and, and I think that's one of the least things we can do to help them in their, in their final resting place. That's for certain.

(15:57):

So, our financial affairs really require some pretty serious consideration. What can we do to help prepare our loved ones for the impact of our death as it relates to our finances?

Mike Shipman (16:08):

Well, life insurance, for instance. You want to make sure the beneficiaries are what you want them to be. And upon the death of the beneficiary, you need to always remember to change the beneficiary. A lot of people fail to do that. Death occurs and five years later, the second person passes away. They haven't changed the beneficiary, and it creates a big problem as far as accessing the life insurance proceeds. Some, and occasionally life insurance proceeds will have to go through probate because there is no beneficiary.

(16:50):

You know we had a doctor a few years ago that owned property in several states. He had a half a million, he was retired, he had a half a million dollar life insurance policy. His wife passed, they had no children. And when he passed away, because he hadn't changed the beneficiary and no children, I don't know what happened to the half a million dollars. It probably went to unclaimed property or, you know, went through probate.

Ric Shields (17:26):

Can you designate a trust as a survivor?

Mike Shipman (17:30):

Yes.

Ric Shields (17:30):

Or as a beneficiary?

Mike Shipman (17:32):

Yes, you can definitely do that. You can like my trust, for instance, I have a, you know, a sizable life insurance policy and my wife does, too. And our trust is the beneficiary of that life insurance.

Ric Shields (17:51):

Well, that, that makes good sense, doesn't it?

Mike Shipman (17:53):

Yes. Yes. And for instance, I had one where, here recently where the husband and wife both had insurance. He had a stroke, went to the hospital, he died in the hospital, and two hours later, his wife passed out and died in this hospital room with him. Each of them was their own beneficiaries, and there were three children. I was able to collect that life insurance for those three children by using a small estate affidavit. That is good for up to $20,000. So, if they would've had $25,000 insurance policies, that would've gone to probate, but since it was less than $20,000 a person, I was able to handle that with some paperwork.

Ric Shields (18:48):

By the way, if people want to contact you, I'm going to direct them to send me an email. You can send it to info@doorways.cc, ask for me to put you in contact with Mike Shipman, and I'll be happy to pass along your information to him or his information to you. So, if you require some assistance in some of these final things we've discussed today, I'm sure Mike will be able to help you or to point you to the right place where people can help.

(19:14):

As we draw our time to a close. Mike, I wonder if you have any special words of encouragement you'd like to share with our listeners as we consider final things.

Mike Shipman (19:22):

Yeah, just plan ahead. You know, don't let anything crop up and surprise you. You have, you know, talk, talk it over with your kids, talk it over with your spouse. Get all your, your beneficiaries straightened out. Check your warranty deed on your house. Make sure it has right of survivorship. I spend my days trying to help people prevent probate, and you know, it's just, anytime you have a question, feel free to reach out. If I don't know the answer, I will point you in the right direction to get the answer.

Ric Shields (20:04):

Thank you, Mike. This has been really valuable. I hope that people will take heed to some of the encouragement instruction that we've been able to provide them today. Wouldn't it be great if we really realized we helped somebody? And that's what you get to do every day. You get to help people every day, how great that is.

Mike Shipman (20:22):

Every day, day in and day out.

Ric Shields (20:28):

You may plan for the end of your earthly existence and have money and properties to pass along to others yet be spiritually bankrupt. Or you can be financially bankrupt and possess untold eternal wealth.

(20:40):

Would you like to pass along something of exceptional value to your family or to your community? Let them know of your faith in Christ Jesus, of his power to forgive sin, and of how he changed your life. I truly hope you'll make plans for where you'll be buried and who will officiate or speak at your funeral. But don't believe for a moment that making those plans is somehow equal to planning where you will spend eternity.

(21:06):

So how do you do that? How can you be assured that your heart is right with God? Well, the apostle Paul told us this in his letter to the Romans in chapter 10, verses 9-10. He wrote, "If you declare with your mouth Jesus is Lord and believe in your heart that God raised him from the dead, you will be saved." It doesn't say, "You could be saved or should be saved or even might be saved if you'll also had a whole bunch of other stuff. And do this and don't do that and live a perfect life." It says, "If you declare with your mouth Jesus is Lord and believe in your heart that God raised him from the dead, you will be saved." And once we commit our lives to Christ and start to follow after him, God's spirit works in our lives to teach and grow us into God-honoring people. He conforms us and transforms us into the person he intended all along for us to become. In all of your planning and preparation for the end of your life, do what you need to, to prepare for your eternal life, too.

(22:08):

Would you pray this simple salvation poem with me? You may have prayed something like this before, but it won't hurt you to say it again and reconfirm your commitment to following Jesus. By the way, you can look it up on the internet. The "Salvation Poem," written by my friend Matthew McPherson, goes like this: "Jesus, you died upon a cross and rose again to save the lost. Forgive me now of all my sin. Come be my savior, Lord and friend. Change my life and make it new. And help me Lord, to live for you."

(22:40):

It really is that simple. And if you'd like more information about what it means to follow after Jesus, go on the internet to salvationpoem.com for free resources.

(22:52):

You can also drop me an email if you have questions or suggestions about this topic of final things. My address is info@doorways.cc. Until next time, this is Ric Shields. Thanks for listening.