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Loans for Major Expenses

The Financial Burden of an Unexpected Death

o Woman deals with financial issues after a death- thumbnail

According to a 2019 survey, nearly 60 percent of middle-aged Americans don’t have a will or living trust. Even fewer millennials are likely to have an estate plan.

And in the emotional aftermath of an unexpected death the best laid plans can go awry. With the median cost of an adult funeral in the U.S. on the rise, burdensome costs can add to the shock.

Cost of a Funeral

The national median cost of a funeral was $7,640 in 2019, without taking 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. You may be tasked with footing the bill for funeral and burial costs well before you receive any remuneration from the deceased’s estate.

And without advanced planning on the part of the deceased, you may find yourself on the hook for more than you can afford.

Ongoing expenses like rent, insurance and utilities for the deceased’s home 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. You may be able to negotiate a payment plan or a deferral. You could also consider a personal loan.

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 of their estate, at which point you might find yourself contending with more costs.

Additional expenses may include:

  • Administering the estate
  • 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 if it is not accounted for in the deceased’s estate planning.

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 bills could 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 because the estate will have to be settled through the probate court. 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’s 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. It occurs after taking inventory of 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 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 while they are grieving, but failing to take proactive financial steps may only serve to compound the struggle, so it helps 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 one 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.