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If you think living in New York is expensive, did you ever consider the cost of a longer stay?

"The cost of funerals has been rising faster than inflation and of course depending on what you select you can easily spend more than $10,000 on a funeral," says Kiplinger's Retirement Report Associate Editor Eleanor Laise.

And that's not even including the cost of the cemetery plot. So it's a good idea to preplan. First, shop around. The Federal Trade Commission requires funeral homes to give you itemized prices. If you decide to prepay your funeral service, experts say proceed with extreme caution.

"So many people really expect that they're sparing their loved ones the anxiety of covering funeral expenses when they enter one of these contract," Laise says. "Unfortunately, in a lot of cases it turns out to be just the opposite."

New York State has one of the toughest laws regulating prepaid funerals. Depending on the agreement you enter, you are entitled to a full refund plus any interest earned should you change your mind or if the funeral home goes out of business. Still, consumer advocates say, laws aside, depending on the funeral home, you run the risk of never seeing your money again.

"If they lose your money you are not guaranteed that you would get all your money back which is why we are cautious about prepaying," says Gary Paul Gilbert of the Funeral Consumers Alliance.

If you do prepay, don't let it be a surprise. Alert someone about the arrangement, review every detail and get an itemized receipt. Also, understand your loved ones may still have to cover additional expenses. And keep an eye on your investment.

"Is it going into a bank account, is it going into an insurance company and then request regular statements from that financial institution," Laise says.

And be aware, any interest earned is taxable.

Another option that keeps the money under your control is to set up a "payable on death" account with your bank and name one of your survivors as beneficiaries.

And of course any interest is taxable.

For more information, visit http://www.health.ny.gov/professionals/patients/patient_rights/payfuner.htm.