Tragically, this is a question I have been asked more than once in recent days. During this horrible COVID-19 pandemic, young adults, without any savings, are being left with the tremendous and heartrending responsibility of arranging a funeral for the untimely death of a parent, and do not have the means to pay for it.
A funeral can cost approximately $8,000 in New York, which does not include burial expenses such as the plot and headstone.
If advance financial arrangements for a funeral were not in place, this expense would fall on the surviving family and would need to be paid immediately.
Where Can You Get the Money for a Funeral Immediately?
If your loved one had an account naming you as a joint owner, then you would have immediate access to the bank account and can use that money for the funeral. But if that is not the case, then unless your loved one gave you money in advance of their death or made financial arrangements during their lifetime (see below), getting access to your loved one’s money for a funeral will be much more challenging, if possible at all.
Being named the beneficiary in a will does not give you immediate access to the decedent’s funds. A will needs to be probated, the court needs to give the executor permission to access and collect the decedent’s funds, and only then can someone get paid back for the funeral expenses they laid out. During the best of times, this can take a minimum of several weeks. Currently during this COVID-19 pandemic, courts are working on a skeleton basis and only processing emergency applications. Unfortunately, access to money is not considered an emergency to the courts.
You may then think that it is enough to be named as a beneficiary on your loved one’s bank account to get immediate access to their funds to pay for the funeral. Yes, this would be quicker than going through the probate process, but the bank will require a death certificate to evidence the death of your loved one before releasing the money in the account to you. Generally, a death certificate is ordered by the funeral home, and will not arrive before a funeral will need to take place and be paid for.
If you are named beneficiary of a life insurance policy, or other assets, there are times when a funeral home will accept an assignment of the funds as payment for the funeral. This means that although the life insurance company (or other financial institution) has not yet released the money, you, as beneficiary, are assigning to the funeral home an amount to cover the funeral expresses from the amount that you are entitled to. The balance of the funds would then go to you.
How Can I Prevent My Loved Ones from the Stress of Paying for My Funeral?
There are several ways that a person can make advance financial arrangements for their own funeral during their lifetime.
As mentioned above, a person can give their loved one a sum of money estimated to cover the cost of a funeral, or can add them as a joint owner on their account, leaving in the account an amount that would adequately cover funeral expenses. These methods obviously come with risk.
There is no guarantee that the funds won’t be spent for a purpose other than their designated use. And the account would be subject to their loved one’s creditor’s claims, divorce, bankruptcy. Therefore, even with the best of intentions, there is no guarantee that the money will be available when actually needed.
Prepaid Funeral Plan
A prepaid funeral plan is an excellent way to give your family peace of mind and protect them from the unnecessary stress of arranging and paying for a funeral in a time of grieving. This is very advantageous for several reasons, some of which are as follows.
- A prepaid funeral plan relieves the surviving family of the stress of making funeral arrangements a time of mourning so the family can concentrate on what’s important.
- A prepaid plan relieves a family of the financial responsibility of paying for the funeral.
- A prepaid plan allows one to choose what they want and how they want final arrangements to be taken care of.
- A prepaid plan can lock in the cost at current prices.
- And last, a properly set up prepaid plan can be a planning tool for Medicaid qualification and eligibility.
Our Experienced Team is Here to Help
Whether you are sadly arranging the funeral of a loved one or if you wish to make advance preparations to give you and your family peace of mind, my office can help you navigate the process with skill and compassion. Contact us today for a free consultation.