When grieving the loss of a loved one, the thought of planning a funeral and paying for the costs can be overwhelming. If the deceased did not have a pre-paid funeral plan, you may be wondering if the estate pays funeral costs. There are many laws that govern how money in an estate is distributed, but the good news is that funeral costs are usually one of the first things estate funds can be used for.
In a perfect world, it would be simple to have your funeral costs be paid from the estate. In reality, you’ll have to wait for the estate to officially open and for the probate court to grant access to estate assets, which can take several months. If you can fund the funeral costs up-front, there is a good chance you can manage either a partial or full funeral reimbursement from the estate.
Average Funeral Costs and Estate Costs
To have your funeral costs be paid from the estate, you’ll need to plan ahead. Before you can begin planning the funeral itself, it’s important to assess the associated costs and balance them with the other costs of the estate. Whether the estate has enough funds to cover the entire cost of the funeral will depend on the standing of the decedent’s finances and the size of the estate. If your goal is to have all funeral costs be paid from the estate, working closely with the executor can help you balance those costs along the way.
The executor, sometimes called a “personal representative,” is in charge of executing the will of the deceased and ensuring their financial affairs are closed out. In some cases, the executor is a family member or loved one identified in the will. Other times, the court may appoint an executor while funeral arrangements are handled by a close relative.
Be sure to talk with the executor before incurring any funeral expenses. The executor often needs several months to assess what will be left after debts and bequests are made, but they may be able to provide you with a basic idea of what the estate can cover. If your loved one prepaid for a funeral, kept a funeral bond, or paid for funeral insurance, the executor will be able to tell you that as well.
The executor is also the only person with the right to incur and approve expenses on behalf of the state, so keeping them in the loop can help you avoid un-reimbursable costs at the end of the process. It will be up to them, in the end, to deem whether funeral expenses were reasonable and customary—which will be explained later.
Average Funeral Costs
Every funeral is different, and so too are their costs. Depending on the location and the level of services provided, the cost of a funeral can range anywhere between $1,500 and $15,000. In the U.S., the average funeral costs about $7,000. This includes viewing and burial or cremation, service fees, transportation, a casket, headstones or urns, and other preparations.
Planning a funeral can be a stressful process. Discussing your funeral options with the director of the funeral home can help. Even the most basic funeral expenses can come at a significant cost, so it’s important to talk with a local, independent funeral director who can help you decide which items are must-haves, and what you can do without. They will work with you to find options for a deeply personal experience that works for your budget to ensure that most, if not all, all funeral costs be paid from within the budget of the estate.
This is an emotional time, but a good funeral director can explain the options available and provide you with an estimate. You can take that estimate to the executor to get their approval. When you’re ready to move into contracting with a funeral home, this is also a good time to have the executor and an attorney go over it before you sign.
In most cases, funeral homes must be paid by the day of the funeral. This means someone will have to foot the bill until the estate is settled. This isn’t always feasible, and some families opt to split the cost between different family members, work out a payment plan with the funeral home, or crowdfund via sites like GoFundMe. To help you manage those up-front costs, ask your funeral director for a schedule of dates when specific amounts are due. If you’re not able to pay those up-front expenses out-of-pocket, there are other ways to ease the financial burden.
Other Costs of the Estate
Of course, the funeral cost is not the only factor in settling the estate. Previous debts, taxes, and administrative fees must be considered. The executor will typically handle these considerations to ensure all debts and taxes are paid and what remains is delivered to the rightful persons designated in the will.
Each state has its own laws governing how money in an estate is distributed, but all states follow a general priority list. If the decedent has any outstanding debts, those are typically the first priority of payment. Because payment of debt is technically the responsibility of the deceased, the executor of the estate must use the decedent’s estate and assets to settle these debts.
For many loved ones without the means to pay for a funeral out-of-pocket, it is important that funeral costs be paid from the estate. So funeral expenses are often next in line of priority, followed by estate administrative expenses (such as court fees, legal expenses, executor fees, etc.), then taxes, creditors, and heirs.
If the decedent has their affairs in good order, this process will move quickly and you should be able to seek funeral reimbursement from the estate without much trouble. However, if this is not the case, it is still possible to have funeral costs be paid from the estate, it just might take a bit longer. Working closely with your executor to plan the funeral can help you budget for these other costs more effectively.
Reimbursing Funeral Costs from the Estate
Another reason it is important to work closely with the executor is to ensure your funeral plans are considered “reasonable and customary.” What is considered reasonable and customary will depend on the decedent’s situation in life and the size of the estate. Items not considered reasonable and customary are not usually eligible for reimbursement from the estate. Then, the person making funeral arrangements will be liable for the excessive costs that fall outside of that reasonable and customary scope.
The executor may also be able to advise you on what types of expenses are reimbursable. Funeral expenses such as embalming, cremation, caskets, limousines, and floral costs are usually deductible, as well as gravestones, burial plots, and even a funeral meal. However, travel expenses for attendees to the funeral service are not usually reimbursable, nor are other costs of this nature.
If you’re not sure whether a cost is reimbursable, you can always speak with the executor and save the receipt. Be sure to save ALL receipts and invoices associated with the funeral costs. These will be submitted to the executor for reimbursement from the estate. But don’t expect to see a check right away. It can take anywhere from a few months to a year to receive that reimbursement.
Planning and paying for a funeral isn’t easy, especially when you are grieving. If you have questions or are seeking further information about any of our services, our professional staff is here to help. Contact us today.