Don’t Leave the Bill Behind: 5 Smart Ways to Pay for Your Funeral in Hawaiʻi

In Hawaiʻi, where the average cost of a funeral ranges from $7,000 to $12,000 (and rising), it's important to make sure your estate plan accounts for this major end-of-life expense. While it may seem simple to just set aside money in your will, that route can actually delay access to funds and create unnecessary stress for your loved ones.

Below are five effective, probate-free options you can include in your estate plan to ensure your funeral costs are covered, without placing a burden on your family.

1. Life Insurance Policies

A traditional life insurance policy is one of the most common tools used to fund funeral expenses. When set up properly, it pays out to your designated beneficiary shortly after your death certificate is submitted, without going through probate. This immediate access to funds allows your loved ones in Honolulu or elsewhere in Hawaiʻi to make arrangements without financial stress.

Pro Tip: Make sure your ʻohana knows about your policy and where to find the documents. Many benefits go unclaimed simply because family members weren’t informed.

2. Burial Insurance (Use With Caution)

Burial insurance, also called final expense or preneed insurance, is specifically designed to pay for funeral costs. While these policies don’t require medical exams, they typically come with high premiums and limited payouts.

Organizations like the Consumer Federation of America caution against these policies, especially since they’re often marketed to vulnerable communities. Unless you're facing specific Medicaid planning needs, this might not be the best route for your estate planning in Hawaiʻi.

3. Prepaid Funeral Plans (Read the Fine Print)

Many funeral homes in Honolulu and throughout the islands offer prepaid funeral plans. These may seem convenient, but they come with risks.

If the provider buys burial insurance on your behalf, the premiums can be high. If they place your money into a trust, it may not cover inflation or unexpected costs. And if the business closes or gets acquired, your funds could be at risk, especially since many prepaid plan protections are weak or non-existent under Hawaiʻi law.

Only consider this option if you’re working with an elder law attorney on Medicaid planning and need to reduce your countable assets.

4. Payable-On-Death (POD) Accounts

A POD account, also known as a Totten Trust, allows you to name a beneficiary who can access funds immediately upon your death, without court involvement.

You remain in control of the account while alive, and once your death certificate is issued, the funds transfer to your chosen beneficiary. These accounts are simple to set up at most banks in Hawaiʻi.

Just be aware that POD accounts are countable for Medicaid and may be taxed on interest earned.

5. Living Trusts

A customized revocable living trust is one of the most flexible and reliable ways to set aside funds for your funeral expenses.

At my Honolulu-based law office, I create living trusts that allow you to maintain control of your assets during your lifetime and clearly direct how they should be used after your death. You can name a successor trustee to use trust funds for your funeral, and the funds will be immediately accessible without going through probate.

You can amend or revoke the trust at any time, providing both control and peace of mind.

Planning Ahead Brings Peace to Your ʻOhana

Grief is hard enough — don’t make your family worry about how they’re going to pay for your funeral too. Whether you’re on Oʻahu or living elsewhere in Hawaiʻi, a thoughtful estate plan can ease the burden and help your loved ones focus on honoring your life, not scrambling to cover the costs.

If you’re ready to make sure your estate plan includes funds for your final arrangements, I’m here to help.

Frequently Asked Questions (FAQs)

Q: Can I just set aside money in my will to cover funeral costs?

A: You can, but it’s not ideal. Your will must go through probate, which delays access to those funds, sometimes by months or years.

Q: What if I already have life insurance?

A: That’s great — just be sure your family knows about the policy and how to access it. Also, confirm the payout will be sufficient to cover funeral and related expenses.

Q: Are prepaid funeral plans safe in Hawaiʻi?

A: Some plans may be risky, especially if the funeral provider goes out of business or if protections are lacking. Review carefully or work with a trusted estate planning attorney.

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This article is brought to you by the Law Office of Keoni Souza, a boutique estate planning firm located in Honolulu, Hawaiʻi, proudly serving families on Oʻahu and across the Hawaiian Islands. At our firm, estate planning is about more than documents — it’s about creating lasting peace of mind for you and the people you love. Through our unique Life & Legacy Planning Process, we guide you to make informed, empowered decisions that protect your wealth, your wishes, and your family’s future. To get started, contact our Honolulu office today to schedule your Family Wealth Planning Session. Mention this article to learn how you can receive this $750 session at no charge.

Disclaimer: The information on this website is for informational purposes only and should not be considered legal advice. For guidance tailored to your specific situation, please consult an estate planning attorney licensed in the State of Hawaiʻi. Use of this website or communication through this site does not create an attorney-client relationship with the Law Office of Keoni Souza, LLC.