It has been said that nothing is certain but death and taxes. And both can leave you and your loved ones out of pocket if you don’t plan ahead.
Funerals can cost between $4000 for a no-frills version to $15,000 or more if a ceremony and casket are elaborate.
While you may have enough tucked away to cover your send-off, chances are your funeral expenses will have to be paid long before your estate passes on to the person footing the bill for your journey to the other side.
Thankfully, there are a few ways you can make things easier for those you leave behind. But not all of them will suit your circumstances.
Funeral costs will generally need to cover funeral director fees, transport, the coffin, a death certificate, burial and cemetery plot, or cremation, and the expenses for a celebrant or clergy, flowers, newspaper notices and potentially the wake.
According to government website MoneySmart, your options for planning ahead to pay for a funeral include:
- tapping into your super
- pre-paid funerals
- funeral bonds
- funeral insurance
According to MoneySmart, if you have super, when you die your super fund will pay out your super balance and any life insurance to your dependants or your estate. This money can be used to pay for a funeral, but it can take some time for it to be paid out. Your family may need to pay for your funeral and then be reimbursed once probate is granted.
If you have a terminal illness, you may be able to get hold of your super early to cover funeral expenses. You may also be able to get your super early to pay the funeral expenses of a dependant. For more information about these circumstances, go to the Department of Human Services webpage and search ‘early release of superannuation’.
Alternatively, you can opt for a pre-paid funeral. MoneySmart advises that you should ask for a full description of the costs from an organisation offering pre-paid funerals.
Funeral service operators who don’t reveal the costs of a funeral are in breach of the Competition and Consumer Act 2010.
“You can either pay for the funeral in full or pay it off in regular instalments over a period of time. A deposit is usually required but you can negotiate the amount you pay upfront. It’s important to shop around when you are looking for a pre-paid funeral as different funeral directors offer different packages,” MoneySmart says.
Some states require prepaid funerals to be registered. The following fair trading offices can help you with more information about prepaid funerals:
- NSW: Fair Trading: Contributory and pre-paid funerals
- Queensland: Fair Trading: Funerals
- South Australia: South Australian Government: Planning ahead for a funeral
- Tasmania: Consumer Affairs and Fair Trading
- Victoria: Consumer Affairs: Pre-paid funerals
- Western Australia: Pre-paid Funerals Code of Practice.
Funeral bonds are another way to ensure there are funds to pay for your send-off. Funds in these bonds can only be withdrawn after your death to pay for your funeral.
The good news for Age Pensioners is that money invested in burial plots, pre-paid funeral plans or funeral bonds is not subject to the asset or income test.
MoneySmart says that funeral insurance is a policy that will give your family a lump sum payment to help pay for expenses when you die.
See the site’s funeral insurance webpage for more details on what to consider before you choose this type of cover.
If you have had to pay for a loved one’s funeral, please share your experience.
Related articles:
Can you cash in funeral bonds?
Personalising your funeral
What to ask a funeral director
Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.
