Planning for the inevitable

Nobody wants to talk about death, but many businesses profit from the end-of-life journey.

From the pages of In Business magazine.

Janet Bollig, a medical social worker, notes a common irony. During the various phases of our lives, we eagerly plan for milestones such as higher education, career advancement, and marriage. But for understandable reasons, there is one phase of life — the end game — where planning can take a back seat to living.

“Yet that’s the time in our lives when we have to have a very clear direction, and that allows us to provide guidance to family and friends who might be caring for us,” says Bollig, outreach manager for Home Health United in Madison.

Fortunately, a variety of businesses are available to help plan and, if you’ll pardon the expression, execute the final phase of our existence — largely for the benefit of our families. In this market report on the business of death, we examine various end-of-life business realms, including wealth management, wills and trusts, hospice care, and even goodbye celebrations for aging baby boomers. Five years ago, this 76-million-strong generation began to retire in earnest and those who had reached 65 years of age comprised 12.3% of Dane County’s 2015 population, up from 10.3% in 2010, according to the U.S. Census Bureau.

Area communities are getting into the senior-service act, as well, especially when they take steps to become “dementia friendly.”

Diane Mikelbank, director of the Monona Senior Center, is leading the way to gain dementia friendly status for the Monona community. “One of our goals is to encourage the practices of hospitality and inclusion to those affected by dementia by promoting acceptance and engagement in our community,” she explains. “We feel that — not only in our city government offices but also in local businesses — it’s important to give those reminders that it’s basic customer service.”

3 still-emerging businesses for late-life patrons

While there are many well-established businesses serving late and end-of-life needs, here are still-emerging pieces of business that cater to late-life affairs.

1. Concierge service: Susan Roseliep, owner of Concierge Consulting LLC, has a very telling website URL (seniorpositioning.com). Like competitors such as A Place for Mom and Segues, the core of her business is planning and executing the transition of the 65 and older age demographic into a viable housing environment that is more suitable to their needs as they age. The business also assists with understanding medical bills and reviewing insurance claims, and it serves as a medical visit advocate for doctor appointments.

Roseliep has been thinking about this since 2004 when her family moved to Madison from Iowa, where she was a financial advisor and an insurance agent. A lot of her clients were senior citizens who had many questions about health insurance when they were considering Medicare supplements. With 15% of people between the ages of 40 and 60 providing financial support to both an aging parent and a child, according to the Pew Research Center, the market will be much broader than the seniors themselves.

2. Brain health: As researchers discover more about dementia — including possible ways to reverse it — we’ve also learned that nutrition and exercise can help keep our brains healthy. Enter Cathy River, who started working with neuro kinesiology, brains, and seniors 20 years ago and finally took the entrepreneurial plunge with the Madison Brain Center in late 2012.

In her work with seniors, especially stroke victims, her aim is to get them “off their plateau” so their bodies function better. “Your brain stops working as efficiently as you age because that’s what brains do — they slow down,” she notes. “It’s where your platform is, from where you start, that could affect the level of dementia or Alzheimer’s you reach.”

Exercise and nutrition can help that “reset” and prevent dementia from starting or aggressively growing. River believes there are brain games that can help, as well. “Technically, we’re outliving our bodies,” she notes. “If you want to live a long life, you might need new bones, a hip replacement, cataract surgery, knee surgery — many things.”

3. Adult day care: This might seem odd, given that area organizations have offered adult day care for years, but one Dane County employer has found a gap outside of metro areas. This year, Faith Communities Assisted Living opened adult day care in Prairie du Sac, and while the need is evident, smaller communities do face a familiar challenge. “You’re probably not going to find this service as much in smaller communities,” notes Faith Communities’ Rachel Baehr, “because it’s harder to staff.”

Life insurance vs. annuities: What’s the difference?

According to the Insurance Information Institute, both annuities and life insurance are important aspects of a long-term financial plan. While both include death benefits, you buy life insurance in the event you die too soon and an annuity in case you live too long.

In other words, the institute says, life insurance provides economic protection to your loved ones if you die before your financial obligations to them are met, while annuities guard against outliving your assets.

Annuities and life insurance can be broken down into two main categories each — deferred and immediate annuities and whole-life and term-life insurance.

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4 reasons why hospice agreement won’t stifle competition

Federal health policy has inspired a variety of mergers, acquisitions, and collaborations. In one of the more recent, Agrace Hospice and Palliative Care, UnityPoint at Home, which operates locally with UnityPoint Health–Meriter, and UW Health announced a new affiliation agreement to partner in the service of end-of-life care.

Michael Amberg (right), a spiritual and grief counselor with Home Health United, chats with hospice patient Carl Welke.

The competitive impacts on other hospice care providers remain to be seen, but Lynne Myers, president and CEO of Agrace, says the affiliation agreement boils down to working collaboratively with two of the area’s largest health systems. The goal is to ensure better orchestration of transitions from the acute care setting into the home care setting, where more than 90% of hospice care is provided, or even into an Agrace facility. “There is a point at which we’ve worked collaboratively with these folks,” Myers notes, “and this agreement calls upon all three parties to plan care coordination in a more meaningful way.”

If Agrace gets hospice referrals from UnityPoint Health–Meriter and UW Health, will this agreement begin to “crowd out” other hospice providers? For the following four reasons, the agreement is more a prescription for collaboration.

1. Reliable relationships: Agrace isn’t the only hospice provider that contracts with local hospitals. Even though the vast majority of its hospice care is provided in the home, organizations such as Home Health United and Heartland Hospice contract with area hospitals, skilled-nursing facilities, and other Medicare-certified facilities. Such stays are necessary on those rare occasions when pain becomes more acute and cannot be managed in the home.

2. Home help: One reason Home Health United offers hospice is because it offers home health services. The organization is certified under Medicare for home health services, as well as palliative care, and so it felt there was a need to also offer that last level of care, which includes hospice. “It shows the whole transitional care model,” says Janet Bollig, outreach manager for Home Health United. “First is home health care. The next step is palliative. The next step is hospice. We’re the only provider in this area that offers all three of those types of in-home care.”

3. Reimbursement redux: Hospice providers, as well as hospitals and physician clinics, are facing reimbursement pressure from the federal government. The kinds of pressure are different — for hospitals reimbursement is mainly about preventing the preventable — but the affiliation agreement is more about how health care reimbursement is evolving than it is about stifling competition. “We believe that by working together more closely, we’re positioning our organizations to handle those changes more effectively,” Myers says.

4. Choosing choice: Ryan Klaustermeier, administrator at Heartand Hospice, notes that local hospitals are committed to choice. “The hospitals have shared with me they are committed to continuing to offer choice of hospice to their patients upon discharge,” he states. “As long as they offer choice, I don’t foresee a dramatic impact.”

Women in the dying biz

The numbers of women working in the funeral service industry is increasing, according to Adam Raschka, executive director of the Wisconsin Funeral Directors Association.

Forty years ago, 5% of funeral directors were women. “In 2010 that number was 43% nationally and it’s probably closer to 50% now,” Raschka states.

In 1995, 35% of mortuary science school students were women, but by 2013 that number had increased to 62.7%. Milwaukee Area Technical College is the only Wisconsin school offering a mortuary science program.

Don Madelung, vice president at Pierce Mortuary Colleges Inc., agrees that the nurturing nature of women may be behind their interest in the career. “There’s a lot of social science, psychology, and sociology involved,” he says.

Meanwhile, Peter Gunderson, president of Gunderson Funeral Homes, predicts a future shortage of funeral directors. “My feeling is that by 2020 we’ll be 20% short on good funeral directors in the country due to the graying of America,” he says. “Many will retire, and kids aren’t necessarily looking at this as a career. More and more we depend on those who have had exposure to the industry, like my family.”

Men and women often choose to be funeral directors as a second career, having spent time in event planning, social work, public health, the clergy, or the medical fields, to name a few.

At Gunderson, more than half of the licensed staff and apprentices are women, and the same is true at Cress Funeral Service and Cremation Service. “You have to be a caregiver at heart or you’ll burn out,” notes Carey Cress Fose, vice president, “but women are natural caregivers.”

Passing the baton before it’s too late

Business planning in the event of the death of a business owner is a subject many avoid. Many companies stop at the succession plan, which identifies who the next owner will be, or who will inherit a percentage of the stock or other assets, but it is just a portion of a larger wealth-planning tool called a business continuation plan.

A business continuation plan takes into account things like corporate governance, how the board will be structured moving forward, incentivizing key managers to remain, and identifying contractual arrangements. Then there is the issue of cash on hand. When planning, Dan Savage, senior vice president/senior trust officer at State Bank of Cross Plains, suggests business owners consider the following:

Cash needs for business and owner’s estate and family

  • What cash needs might a business have resulting from an owner’s death?
    • Debt acceleration
    • Greater need for professional services
    • Higher salaries for CEO replacement; “stay incentives” or bonuses for key managers
    • Will revenues drop in response to the owner’s death?
  • How can a business obtain needed cash?
    • Examine potential sources such as life insurance, availability of credit lines in the event of the owner’s death, or any assets that could be sold
    • If those sources are not sufficient, what alternate strategies can be implemented?
  • What cash needs might the owner’s family or estate have in the event of the owner’s death?
    • Could the business increase dividends to meet the family’s cash needs?
    • Would it be necessary to replace the owner’s income, or are there sufficient alternate sources?
    • Is life insurance adequate?
    • Is there enough money for estate taxes?

The “Death Tax,” another name for federal estate taxes, applies to high-wealth individuals whose estate value exceeds $5.43 million per individual, or $10.86 million per couple. Estate taxes can be significant, perhaps as much as 45% of an estate’s value, notes Roy Fine, business and estate planning attorney at Murphy Desmond. “There are ways to minimize it, but it can be a crippling thing for a business to have to come up with that kind of tax money.”

Other important basics of continuity planning, according to Fine:

Wills: A way to designate how your property will transfer to your beneficiaries the way you’d like it to happen rather than how the state would like it to happen. “If you don’t at least have a will, your property will be designated by the state.”

Revocable trusts: “People can transfer ownership of their assets into trusts to avoid the probate process. The probate process can be cumbersome, so many people use a revocable trust so when they die the successor-trustee takes control and probate is never involved.”

Beneficiaries: Choose wisely, Fine advises. “Sometimes, without great planning, businesses just get sold or move. That may be fine for the beneficiaries but not so much for the community.”

Living wills: Direct physicians when, under specified circumstances, to discontinue life support.

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Giving them something to celebrate

The end of someone’s life is rarely cause for celebration. However, celebrating is what more and more family and friends are choosing to do when a loved one dies. They are not celebrating the loved one’s passing, but instead his or her life.

Fewer funerals are somber occasions as loved ones prefer to celebrate a person’s life rather than mourn in death. The celebratory approach takes some funeral attendees by surprise, but it can inspire others to make the most of the rest of their lives.

In fact, the days of somber, dreary funerals are practically gone, says Peter Gunderson, president of Gunderson Funeral Home. In its place is a truer remembrance of who that individual was when alive. “One of our goals in any funeral celebration planning is agreeing to keep the deceased’s legend alive — keep their stories alive,” says Gunderson. “Remembering accurately helps us to smile and reminds us of the life lessons that the deceased has given to us as a gift.”

As such, most funeral homes are now providing end-of-life celebrations as opposed to more traditional funerals. It’s a funeral home’s main business model these days.

Gunderson Funeral Home has arranged and coordinated a number of unique end-of-life celebrations, such as ice cream socials, including having an ice cream truck show up; Badgers and Packers tailgates, complete with UW Marching Band members playing “Varsity”; and wine and cheese socials with ceremonial toasts and an open microphone story time.

“If something should be included as an activity, it’s our job to help figure out how to make that happen — staying within bounds but tiptoeing up to the line when appropriate,” notes Gunderson.

Successful, long-serving funeral homes have relationships throughout the area to make those things happen, Gunderson says, from coordinating with musicians to food vendors and many others.

In one Gunderson ceremony, an environmental enthusiast received a renewable resource wicker and sea grass woven basket casket. Grave digging was done by hand to lessen the impact on the environment. “Again, remembering accurately about the deceased helps to steer the development of the critical pieces of the event,” Gunderson explains.

One service that required significant coordination was a funeral celebration on the Monona Terrace rooftop for three UW Med Flight first responders who died on duty when their medical helicopter crashed. Honoring and remembering their participation and contribution to the community by colleagues in the medical and safety professions was foremost, Gunderson says. “Coordination of honor guards, vehicles, and helicopter flyovers by first responders from all over Wisconsin and beyond takes experience and cooperation.

“A person once told me when attending a funeral celebration, ‘Now that was a transformation. I came in sad and angry my friend had died, but now, as I leave, I feel a bold fire inside of me, remembering the things he taught me and the idea that somewhere out there he and those lessons are still guiding and helping me smile.’”

Making up for lost caskets

According to the National Funeral Directors Association, the number of burials will decline from 1.2 million in 2015 to 902,000 by 2025 and to just 570,000 in 2035. NFDA has noticed an uptick in the cost of cremations, which typically cost less than one-fifth of the cost of burial. Because of that, the association forecasts moderate revenue gains in the foreseeable future. “Years ago I think a lot of [the cost] was put up front on the casket because it was easy,” notes Carey Cress Fose, vice president at Cress Funeral & Cremation Service. “We’ve become more sophisticated so now we only mark caskets appropriately.”

In general, funeral homes are compensating for casket revenue loss by offering more services or memorial items, and both Gunderson and Cress have their own crematoriums, so they will benefit from either choice. But with caskets now available for purchase through Costco or from China, the funeral industry has had to adjust. “If you don’t want the hearse, you don’t have to pay for it,” Cress Fose says. “If you want an out-of-town service, we have to charge mileage. Each service we charge for is cost-studied and broken down. You pay à la carte but what we offer has broadened, from writing the obituary on.”

Cremations vs. burials

By 2025, Wisconsin cremations are expected to account for between 70% and 77% of all dispositions, with burials accounting for 15% to 24%.

According to the National Funeral Directors Association, the U.S. cremation rate is expected to rise from 1.27 million in 2015 to 1.88 million by 2025 and to 2.73 million
by 2035. Source: 2015 NFDA Cremation and Burial Report

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Funerals go digital

Once upon a time a funeral home offering a multimedia experience might have provided a few photo collages and a CD player to play the dearly departed’s favorite song.

Digital remembrances: Multimedia funeral services allows loved ones to reflect on a person’s life in richer, more meaningful ways.

Today’s multimedia services available to funeral homes aren’t nearly that low tech, but they remain streamlined and easy to use, says Matt Frazer, president of Middleton-based Frazer Consultants, which provides funeral home website design, tribute video software, funeral stationery, and digital register books.

Frazer Consultants got its start in 2003 with a simple personalized keepsake candle for the funeral industry, but its array of services has only grown in the ensuing decade-plus as families demanded a more personalized funeral experience.

It has responded with Frazer’s Tribute Center software platform, which allows funeral homes to create highly personalized video tributes, memorial stationery, and more at a family’s request. “We have built in about 110 intros and endings that can be auto-applied,” notes Frazer, “along with about 800 video clips that we’ve purchased that are part of our library and can be used throughout the video, and about 300 or 400 different songs that we’ve licensed.”

Twenty years ago, funeral planning offered limited options for things like stationery — a cloud or generic garden theme, perhaps, or stars and stripes if the deceased was a veteran. Now they have access to a print-on-demand funeral stationery system with more than 500 different themes that the family can choose from. “When someone walks through the door, the funeral home is now able to produce highly personalized funeral stationery products for the family that are much more meaningful,” Frazer notes.

In addition, robust digital registries are replacing standard three- or six-ring paper binders on which guests traditionally wrote their names and addresses. Instead, guests sign in on an iPad-like device or with a proprietary product such as Frazer’s eGuest. At the end of funeral process, with the click of a button, the software can gather all of the guest information, the online memories that were left on the funeral home’s website, and photos from the tribute video to create a Shutterfly-quality keepsake book available to the family.

Some funeral homes are even venturing into webcasting, allowing family members and friends unable to travel to participate in the service in real time.

Pet considerations: Animal disposal takes a dignified turn

Only 17% of funeral homes in the U.S. offer pet cremation services, and another 13% plan to add these services, according to the National Funeral Directors Association. Peter Gunderson, president of Gunderson Funeral Homes, says his company has discussed it; Shedden Farley, coordinator for Natural Path Sanctuary, says the same of his business.

Pet owners now have choices when it comes to disposing of and memorializing their animals in a more dignified way.

For now, both have a third-party agreement with Memorial Pet Services (MPS) in Middleton. Most pet funerals involve cremation, and MPS will cremate any pet, from mice to a lion, notes owner Mark Meinholz, who started the company to put dignity back into pet care. MPS employs nine, and while it contracts with the UW–Madison Veterinary Medical Teaching Hospital and the Dane County Humane Society, anyone can request pet services.

It’s not a necessarily lucrative business, Meinholz admits. “If a cat dies at a vet’s office, I pick up the cat, do the cremation, return the remains back to the clinic, and I make $62. You have to do a lot of that to make ends meet.” Cat cremations on average run between $160 and $220.

Costs for dogs are determined by weight. A golden retriever cremation, as an example, can run $195 to $280 on average. Urns and other memorial items are also available, as are packages, preplanning, and free monthly grief counseling.

Because chemicals used in euthanasia are usually toxic, Meinholz cautions owners choosing to bury their pets to follow proper protocol. “Before this, pet cremains went into the landfill. We take ours to private lands and spread them out in the country.”

Nature’s way of burying

Natural Path Sanctuary in Verona is a 25-acre, perpetual option for the environmentally minded. “We don’t advertise ourselves as an economical way to be buried,” notes coordinator Shedden Farley. “We’re an environmental way to be buried.” His late father established the Farley Center — a nonprofit with a community center, farm incubator, and outreach center for at-need, low-resource groups in the Madison area — and the sanctuary launched in 2011 as a means to help fund it.

Natural burials like the ones offered in Natural Path Sanctuary, Verona, were the norm prior to the Civil War.

Here, hidden among the trees, cliffs, hills, and nature, natural stones mark the gravesites. “We don’t allow embalming or exotic hardwood-type caskets, lockers, finishes, metal caskets, or metal ornamentation on a casket,” Farley explains. The plain, pine box is common, as is woven bamboo, wicker, or cardboard.

Polished granite markers are also taboo. “Most of our burials are in shrouds,” he says, “generally made of linen.” Cotton sheets or a paper blanket are other options. “We will allow quilts, but no polyester is allowed.” Clothing also must be made of natural fiber, and bodies are lowered into the graves with straps.

Backhoes are not allowed, and families can dig the 3-foot-deep graves themselves the old fashioned way, with a shovel. “In Wisconsin there is no minimum depth but there is a recommendation that there is always 18 inches of dirt from the container to the surface.” Burying deeper than three feet goes beyond the microbial layer of the earth, Farley explains, which helps facilitate decomposition and feeds the forest. “Bodies begin decomposing in a couple of weeks, so our way is natural, odorless, and nutrients are absorbed into the surrounding ground. Everyone did this until the Civil War, when chemicals were introduced.”

Gravesites are not maintained with mowers, pesticides, or herbicides. “We let nature take over,” Farley says. “If you walked through, you wouldn’t find the cemetery without asking where it is.”

Those choosing natural burials must provide a tax-deductible legacy donation of $2,500 to the Farley Center before they can purchase the right to be buried in the cemetery for $1,000, which Farley says is a lot cheaper than most funerals.

Natural Path Sanctuary has seen about 80 burials thus far. Three phases are planned, with phase I surveyed for 7,428 gravesites on 11 acres. In contrast, Farley says, a conventional cemetery can include as many as 2,000 bodies per acre.

Natural burial is a growing industry, Farley says. “There were 44 natural cemeteries in the country when we first started. Now there are about 300, including some conventional cemeteries that are offering this.”

Funeral homes as event venues?

Stadiums like Miller Park or Camp Randall are scheduling movies or music events to help generate revenue during the off-season. Why not funeral homes?

Gunderson Funeral Homes is exploring other uses for its facilities, according to President Peter Gunderson. In Dane County, where wedding sites are often locked up and rental costs are high, one of Gunderson’s facilities has already hosted two wedding receptions and one wedding. “The people found it more regionally accessible and more available with just a few months’ notice,” Gunderson states. Parking is available, groups bring their own caterer, and the venues can accommodate musicians or CDs.

“We have to be flexible,” Gunderson notes. “If you can use those facilities, fixed costs are spread out more. So I think there can be some growth, but there are obvious barriers.”

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