Financial Help with Funeral Costs

Payment plans and other ways to cover funeral costs

Last updated: 1 February 2017

If you have been asked to take care of the funeral arrangements for a loved one, you may be worried about how you are going to pay. Although the person arranging the funeral is responsible for covering the costs, there could be financial resources available that can help you pay for these expenses.

Your loved one’s estate

Funeral expenses can be paid for out of your loved one’s estate, so it is important that you research its value as soon as possible. When someone dies, however, their assets and belongings go through a legal process called probate.

This may take longer than the time you have in hand to organize the funeral arrangements. Keep a record and receipts of the costs involved in arranging the funeral, for later reimbursement from the estate. It’s important to know before you begin that the estate will be able to cover the funeral costs, on top of other sums owed to other parties and creditors, which may take precedence.

Some funeral homes allow payment to be delayed until your loved one’s assets have been unfrozen, making a claim against the estate which will take priority when it comes to creditors being honored. If this is not possible, or your loved one’s estate cannot cover the cost of the funeral, other payment options need to be explored.

Inquire at the bank

You cannot use your loved one’s credit card, check book or savings to cover the costs, although a joint bank account, or one held in a living trust, may be accessible with the correct paperwork. In some cases, a judge may issue a letter to that will allow for funeral expenses to be paid from your loved one’s bank account by their estate’s executor or administrator.

They may also have arranged for a Payable On Death account with their bank, naming a beneficiary to assume control of the assets within it, when they die. You will need to show the bank manager your loved one’s death certificate, before the funds are transferred. A POD account is not included within the probate process.

Insurance plans

If you are the beneficiary of your loved one’s life insurance policy, you can use the proceeds to cover the cost of the funeral and any other costs, such as medical bills. But it can take between one and two months for claims to be processed, or longer, if the policy includes several named beneficiaries. So you may need to look at other options, if you will need to settle the account with your funeral home within a shorter time frame.

If your loved one didn’t leave details of an insurance plan, evidence of any payment schemes could appear in your loved one’s bank statements, as they often require monthly installments. Details of these accounts are often shared with those closest to the account holder, or referred to in the will.

Funeral or burial insurance

Funeral insurance policies are designed specifically to cover funeral expenses and quickly pass on the benefits when a loved one dies.

They can be taken out later in life and you do not always have to undergo a medical exam before taking out a policy, which makes them an attractive option for people in later life who want to take care of their own funeral costs. It’s important to ensure that the insurance broker who arranged the plan is licensed in your state.

If your loved one had funeral insurance, it could be that they assigned a funeral home to receive the funds. In these cases, the person who took out the insurance may have already chosen the funeral goods and services (such as burial, casket and final place of rest) to be covered by the policy. The insurer settles with the funeral home after the goods and services have been supplied.

If your loved one has named you as the beneficiary of their burial insurance, you will need to file a claim, providing the insurer with the insurance papers, copy of the death certificate and, in some cases, medical papers.

Some people choose to arrange their own funeral ahead of time, with a trusted funeral home that’s licensed to sell pre-need contracts. Every state has its own laws about how these arrangements, based around a monthly payment plan, are made.

Military Funeral

If your loved one was in the military, or was a veteran who served and did not depart the service under dishonourable conditions, they are entitled to a free burial in a national cemetery and a government headstone or marker.

However, their next-of-kin is responsible for the cost of the funeral itself. If your loved one served in the military and you choose not to have them interred in a national cemetery, you may be able to claim an allowance from the Department of Veterans Affairs (VA), which covers some of the funeral expenses and burial costs.

The allowances vary according to certain conditions outlined by the VA.

The VA can also tell you more about certain tax-free monthly benefits available to surviving spouses, children, or parents of a service member who died on active service or as a result of a service-related injury or disease.

Social Security

Social Security should always be informed, citing your loved one’s Social Security number, when a loved one dies. You may be able to claim a one-off survivor’s benefit or a monthly benefit. The lump sum payment of $255 is usually made to a spouse, but the Social Security Administration has a full check-list of dependents who may otherwise qualify to claim.

Welfare

If you are supported by welfare or do not have the ability to pay for a funeral, your local municipality, depending upon the state and county where you live, may offer some public assistance to cover the most basic burial or cremation costs.

This is generally administered by county social services or health and human services departments. Depending on the state you live, counties, cities and towns have their own assessment guidelines to determine who qualifies for relief funding and how much assistance towards the cost of the cremation or burial will be paid.