How to Pay for Your Loved One’s Funeral

Your loved one has passed away. If your loved one is like most Americans, you may be left in the dark about his or her final wishes. In addition to the many emotions you are feeling, you have yet another burden–paying for the funeral, a cost that continues to rise in America. Once all funeral-related costs are factored in, the typical traditional funeral service will cost the average family $8,000 – $10,000.

So, what do you do? It may be a good idea to start by speaking with your loved one’s close friends, family members and professional acquaintances. These conversations could uncover whether a life insurance policy is in place, a will exists or if funeral arrangements were funded prior to their departure.

Who Can Help

There are many benefits available that can assist with the cost of funeral arrangements. If your loved one received Social Security benefits, Social Security Administration will pay a one time benefit of $255 (2011) to the surviving spouse, dependents and even a divorced spouse in certain situations. Also, veterans may be eligible for funeral benefits to cover certain burial and funeral costs. If the death is service related, Veterans Administration will pay up to $2,000 (2011) toward burial expenses and up to $300 for deaths that are non-service related.

In addition, there are some nonprofits, churches, and state programs that can provide funds needed to bury your loved one. Check with your state’s department of social services to determine whether you qualify for certain benefits. For instance, when a loved one dies as a result of some type of crime, an application can be made to the state’s Crime Victims’ Reparations program. There are strict rules governing when a victim of crime and/or his family can apply to this program. But, it does exist and it does help families. One family thankfully had the resources on hand needed to bury a daughter who was killed as a result of a drunk driver. After applying to the program, however, a considerable portion of the funds expended were returned to the family through the program.

The Deceased Can Contribute Too

If at all possible, locate your loved one’s will. A will is helpful in that it provides instructions regarding the distribution of assets and it can uncover unknown assets. If the deceased did not have a will, consider speaking with bankers about the possibility of a safe deposit box. Also, retrieve past income tax returns to identify whether dividends and interest payments were paid. These payments can provide a pathway to stocks, bonds, certificates of deposit and other assets.

Does a Life Insurance Policy Exist

If you are not sure whether your loved one had a policy in place, there are a couple of things you can do. Review past debit transactions or cancelled checks to identify payments made to a life insurance company.

Contacting the deceased’s place of employment may also uncover life insurance policies, since most companies offer policies as an employee benefit.

When Jaden Davis lost his mother, he did not know where to turn. Uncertain of how he would pay for the funeral, he contacted his mother’s place of employment. To his amazement, his mother did in fact have a policy in place and it left him with one less thing to worry about.

Talk to Loved Ones Now

Finally, if you haven’t already done so, it is a good idea to talk to those closest to you now about your final wishes and financial matters. Take stock of your current situation. Do you have a will, life insurance, investment and bank accounts and are beneficiaries clearly named on those items? Are your loved ones aware of these policies and accounts? Do they know where to find the important documents related to them?

Commit to inform your loved ones about your final wishes. Proper planning, such as preparing wills, obtaining life insurance policies and meeting with a financial advisor or attorney could ease the financial burden when you are long gone.

Remember, Your Choice, Your Future!

Kemberley Washington is a certified public accountant and a business professor at Dillard University.  Follow her on Twitter or subscribe to her blog at kemberley.com.  

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