According to a 2015 survey, just 56% of American parents have a will or living trust document. Of those that do, just 40% have updated it in the last 1-5 years.
But even when due diligence has been done, in the emotional aftermath of an unexpected death, even the best laid plans can go still go awry – giving rise to burdensome costs.
Over the past decade, the median cost of an adult funeral in the United States has increased 28.6 percent.
Cost of a Funeral
The national median cost of a funeral was $7,181 in 2014 – and that cost does not take into account cemetery or vault costs, travel and shipping charges, or miscellaneous expenses like flowers and an obituary.
Even when the deceased pre-pay funeral costs, additional expenses can easily add up to an extra few hundred or even thousands of dollars. And without advanced planning on the part of the deceased, you may find yourself on the hook for more than you can afford.
Even if you’ll eventually be reimbursed by the deceased’s estate, you may be tasked with footing the bill for burial and funeral costs well before you receive any remuneration.
Ongoing expenses like rent, insurance and utilities may also need to be paid until arrangements for next steps have been made.
What If You Can’t Cover the Costs?
If you can’t afford to cover all of the funeral costs, get in touch with the appropriate parties and explain your situation to see if you can negotiate a deferral, or consider a personal loan to cover funeral costs.
Once you’ve made a plan for covering the immediate expenses following the unexpected death of a loved one, you may be tasked with the settling their estate, at which point you might find yourself contending with more costs.
Those costs include:
- Administering the estate and clearing outstanding debts
- Appraisal and valuation of deceased’s assets
- Storing deceased’s property
- Mailing documents to beneficiaries
Before any beneficiary or heir of the deceased can receive property that belonged to the deceased, the estate must be properly administered, and all debts of the estate must be cleared.
This process may require the help of a legal professional, which can be a hefty expense, too.
You may also have to cover appraisal and business valuation fees to determine the date of death values of real estate and personal property. These fees can range anywhere from a few hundred to a few thousand dollars.
Other miscellaneous fees include everything from the costs of storing or shipping the deceased’s personal property to postage costs for documents that need to be mailed to beneficiaries.
What If There Is No Will?
If no will or trust document was made, you could anticipate even more costs, as the estate will have to be settled through the probate court and legal fees can skyrocket as the probate process plays out.
In addition to all of these expenses, estate tax and/or inheritance tax returns (state and/or federal) will need to be filed, as well as the deceased final income tax return. Though the help of a financial professional may be invaluable, it will also add to total costs.
The distribution of inheritance funds is the last element of settling the estate – after taking inventory or the deceased’s documents and assets, after the payment of the decedent’s final bills and ongoing administrative expenses, and after applicable tax returns have been filed and applicable taxes have been paid – the entire process of which can take anywhere from a few months to a couple of years.
In the meantime, the cost of executing each of these steps will need to be covered, and the financial burden of these expenses on top of funeral, burial and other miscellaneous costs, can be overwhelming.
Paying for Death Related Expenses
Nobody likes to think about money matters during time the grieving process, but failing to take proactive financial steps may only serve to compound the struggle, so it may help to stay mindful of your options.
One of the advantages of using a personal loan when you need help paying bills in a fairly short amount of time is that you’re taking out unsecured debt. This means you’re not putting your house or car up as collateral for the funds you borrow.
If you apply for a personal loan, you could get a decision the same day (assuming your application is complete), and if eligible, funds are sent as early as the next business day after acceptance.
Combining the Emotional and the Practical
Studies have shown that the sudden death of a loved can result in depression, anxiety and panic.
Because of the very nature of the event (it’s unexpected) you can’t always be financially prepared. Combine that with the emotional toll many people take on, and it can be a very difficult time.
Unfortunately, you have to balance the practical costs and responsibilities that come with the aftermath of such an event with the emotional and psychological effects.
That’s why if you need additional funds, it’s good to not only have options, but to consider a lender that will guide you through the process and make it as painless as possible for you.