When a loved one dies, family members are not only in mourning — they may be in a state of uncertainty about what to do next. While everyone is respectful to the loss of the loved one, tension can arise over who must take responsibility for arrangements and costs. Confusion often arises.
In the weeks and months after the death, a person will be appointed by the court and assets will be inventoried and distributed. But what are the steps that must be taken in the first days after the death? This article answers some of the questions you and your family may have in this situation.
Who Pays the Funeral Director?
In some cases, the funeral director wants payment the day of the burial or even prior to the funeral. Yet, the money from the estate and the deceased person’s accounts is not yet available. Who pays? The person who usually covers funeral costs is the family member who is the named executor in the will. Later, the executor will be reimbursed from the assets of the estate when the will is probated.
If the executor does not have the funds to pay the director, then most likely other family members will pitch in to pay the funeral director and be reimbursed by the estate.
What if the estate has no assets to reimburse the executor or family members? Then, all family members should pitch in for the expenses.
If the executor is a non-family member, then the family usually pays for the funeral and is reimbursed from the estate.
If there is no will, the family members will have to choose someone who would be the administrator of the estate and the proposed administrator would pay or family members would pitch in to pay the funeral director. Reimbursement will be from the estate.
If your loved one has bank accounts that are “payable on death” (and don’t go through probate), the beneficiaries might be able to access the accounts in time to pay for the funeral. However, the bank will need to see a death certificate and it may take too long to get one issued (see below for more information about bank accounts).
Note: The decedent may have taken steps to pre-pay for a funeral plan or a burial plot. Check the individual’s personal papers to check for this.
What are Typical Funeral Expenses?
Generally, all expenses that reasonably relate to the burial of a loved one can be considered an expense of the estate. The expense must be relevant to the ceremony or burial or service.
- Funeral director’s basic service fee;
- Embalming and body preparation;
- Funeral ceremony and viewing;
- Cost to dig the grave;
- Headstone and grave marker;
- Family reception, catered food;
- Clergy fees; and
- Florist fees.
Again, all costs must be reasonable. Otherwise, the court may reject the costs (or reimbursements) as an expense of the estate.
When Are Papers Filed in Court?
In some states, there is a waiting period before papers can be filed in court. This is done out of respect for family members to allow them time to grieve. However, if there is an immediate need to file papers to handle a financial matter, the court may entertain an expedited motion or grant temporary letters to resolve the need (for example, to pay health care costs for a surviving spouse; to pay rent; or to run a company). In any event, it would most likely still take a few days before the court would issue an order.
What Happens to Bank Accounts, Credit Cards and Other Assets?
Generally, the proposed executor or estate administrator notifies financial institutions and credit card companies of the death of the decedent — even before the estate administration. This should put a hold on the account. Sometimes, these institutions require a death certificate, which can take a few days to obtain. But it puts banks and credit card agencies on notice in case someone tries to take money from the account or use a credit card.
Once the person has died, no one should write a check from the bank account or attempt to use the decedent’s credit card. Basically, everything is frozen at the date of death until there is a personal representative appointed by the court and an estate account is opened. Further, all other personal assets should remain as is. There is some leeway as to necessities such as moving a car for street cleaning, etc. But generally, nothing should be touched unless necessary to move. All assets should be inventoried as soon as possible.
Important: If a bank account is held jointly by spouses or by two people jointly with rights of survivorship, the account holder who survives can likely write checks. Ask your estate attorney or your bank for more information.
Reasonableness and Respect Are Key
This article only covers some of the immediate issues faced by family members and friends when a loved one dies. Because of the emotional state that most people experience upon the death of a loved one, family members should proceed cautiously when handling the immediate financial needs of the decedent’s estate prior to the opening of an estate by a court. Family members who pay for funeral expenses should keep track of their expenses. They should refrain from attempts to transfer the decedent’s money until authorized by the court. Speak with your attorney about these issues.