Many people worry about talking with their family regarding their final arrangements. But final arrangements can also be made before someone passes, to ease the burden on family and friends. With a qualified funeral trust, an individual is able to pay for and plan their final arrangements in advance. The funds are kept in a QFT account with a separate tax ID and EIN. The individual cannot take this money back (it is an irrevocable trust), but likewise, the funeral home cannot use it for anything except their final expenses.
This is a good way to ensure that the funds are taken care of. Otherwise, it’s possible that a funeral home could use the funds in a fungible manner and end up dissolved, bankrupt, or otherwise unable to take care of the final arrangements and funereal needs. With a QFT, if the funeral home fails to do its duty, the funds themselves can be returned to the family for alternative final arrangements. This also helps an individual pay for final arrangements now, rather than in the future, when inflation may make it more expensive.