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Paying for a Funeral with Savings Accounts

Anything that is put aside for funeral expenses is good, says Darryl Dick of Gilligan's Funeral Home in Cincinnati, Ohio. .The drawback with savings is that people aren't disciplined enough and often forgets to regularly set aside money.

And since earnings accrue (which you can draw as you please), you need to report it on a 1099 and pay taxes on it. Another thing is, because these savings are not specifically for funeral expenses, there's that big temptation to draw from them for emergencies.

By the time the need comes, there's hardly anything in the account.