How to deal with the financial cost of a death in the family
A death in the family is an extremely hard time for anyone, and if you’re dealing with this now, our sincere condolences. We know that your emotions are all over the place, and the acceptance that someone you love is gone forever can get the better of you. On top of that, the expenses that come along with this sad time make things even more of a struggle.
So, how do you deal with the financial cost of a death in the family? Here are some tips to help you with financial planning during this difficult time.
Funeral costs
The costs associated with a funeral differ significantly depending on what option you choose, but you should expect this to set you back anywhere upwards of $5,000. We’re pretty sure your loved one wouldn’t want you to get into debt seeing them off, so we recommend sticking to what you can afford. Many funeral service brands operate under the same parent company, so make sure you check out a few different providers when comparing the deals.
Obviously when someone passes away, their bank needs to be notified, and they will freeze the accounts if they are in the sole name of the deceased. If you have a joint account, the bank should automatically transfer the funds to you. Many banks will also release funds to cover the costs of the funeral if you supply them with an invoice from the funeral service provider. You should also check if your loved one had funeral insurance or a prepaid funeral. Hopefully you’ll already know if this is the case for your loved one, but if you’re in doubt, contact the solicitor acting for your deceased family member to find out more.
If your loved one was a veteran and was receiving a pension from the Department of Veterans Affairs, you may qualify for a one-time non-taxable payment. Visit DVA’s website for more details.
Lastly, you can ask the funeral company if they accept deferred or instalment payments. Either of these options usually means you’ll end up paying more, but it can certainly help to alleviate the immediate financial stress associated with that last goodbye.
Any of these options should help you deal with the cost of your loved one’s funeral, and with the escalating cost of living, this could be a big financial help during your bereavement.
Check the will
If it's your partner who passed away, hopefully they have left a will stating what they want to happen with their assets. The solicitor who arranged the will with your partner will be able to guide and assist you through the process. Remember, there will be solicitor fees to pay, so ask for an estimate upfront so you know what the likely cost will be.
But if there’s no will left behind, each State law sets the process for determining the inheritance of the assets. Usually, this means applying to the Court, who will generally grant administration to the person or people with the greatest entitlement in the estate (such as a spouse or children).
Do a stock-take of the assets
In some instances, you may not be aware of the full extent of the assets within your loved one’s estate. Your solicitor will do a check for you by reaching out to Australian financial institutions and share registries to check if there are any assets you don’t know about.
If you have shares that are held in joint names, you can ask the share registry to transfer them under your name only, without the cost of the capital gains tax. If your deceased spouse had superannuation, contact the super fund company to identify the process to transfer any super funds into your own fund, or to receive a payment for the full amount of your spouse’s super. It’s worth noting that this payment – if made to a spouse or children of the deceased, is a tax-free payment. Additionally, if there are any debts left by the departed family member, the estate will pay for it (unless of course the debt is held in joint names).
Life Insurance
If your loved one had a life insurance policy, check who the beneficiary is. This type of insurance releases a lump sum payment when the policyholder dies. In most cases, the beneficiary is any of the close family members, such as a spouse or children. You can use the insurance payment to cover the funeral costs, any debts the policyholder may have had, mortgage, food, and anything else you want to use the money for. Try to contact the insurance company as soon as you can so you can include the pay out in your financial planning.
Check Centrelink assistance
Centrelink has payments and services that may be able to help you at this difficult time. The type and amount of bereavement assistance you may be eligible for depends on all of the following:
- your individual circumstances
- your relationship to the person who died
- when you tell Centrelink about the person’s death
If your partner died, you may get a lump sum bereavement payment. To be eligible, you both needed to be getting an income support payment for at least the previous 12 months, or a pension. You can find out more about Centrelink bereavement services here.
We’re here to help
There’s nothing predictable about life – or death - and it’s a long and winding process when someone in the family passes away. It’s not just the grief you need to deal with but also the financial expenses. We hope this blog has given you some options to help deal with the financial burden of losing a family member. And remember, if you need a financial helping hand at this difficult time, we’re here to help. Just take a look at our cash loans up to $5,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours – so we’ve got your back on this.