When a person passes on, their bank accounts are typically frozen by their bank. The same applies to money held with finance companies, credit unions, and the like. These assets remain tied up until a family representative or executor of the deceased’s will applies for and receives a grant of probate, allowing them to administer the will.
In some situations, there may be a need to bury the deceased before the grant of probate, either by their personal wishes before they died or the family’s wishes. What then happens if the funds to pay the funeral expenses are tied up and cannot be accessed? Below, we consider some alternate ways of paying funeral expenses before probate.
How to pay funeral costs before probate
Here are some ways to raise funds to cover the funeral before the release of the deceased’s assets:
1. Joint bank accounts
If the deceased person owned a joint bank account with their partner or spouse before their passing (in their joint names), the account automatically becomes the property of the surviving person. This way, the much-needed funds for funeral costs can be withdrawn and used to offset pressing bills.
The procedure is straightforward– the surviving spouse or partner informs the financial institution holding their joint funds that their loved one has passed. Then, the financial institution– let’s say, a bank– asks for proof, like a death certificate or certified copy.
After receiving the required proof, the bank will ask the surviving partner to complete and sign a form. At this point, it is advisable to get legal counsel before signing any document. Once the document is signed, the bank transfers the account to the surviving partner’s name. From there, the surviving partner can withdraw funds to pay the funeral costs.
2. A third-party paying the costs pending probate
Sometimes, a friend or family member may choose or be asked to pay the funeral costs with their money. Situations like these can be tricky, and misunderstandings can occur, so it is best to confirm whether the money is a loan to be repaid from the deceased’s assets or an outright gift.
Suppose the intent is to release the money as a loan, hoping to get a reimbursement from the deceased’s estate. Getting a lawyer to draw up a written agreement and have the deceased’s surviving relatives sign it is important. Then, if the third party made payments directly to the funeral home, it is vital to ask for a receipt as proof to prevent clashes in the future.
3. Financial Organizations Paying to the Funeral Home
If the deceased held a bank account in their sole name, their bank would freeze the account upon notification of their death, as it automatically becomes part of the deceased’s estate. While it is advised to contact the deceased’s bank or other financial institutions, they may refuse to release these frozen funds to the family.
Instead, they may prefer to pay the funeral costs directly to the funeral home until an executor is appointed over the deceased’s estate. Banks have procedures for these situations; there are forms to complete before funds are disbursed to the funeral home.
However, even if the financial institution releases money, they may not agree to cover all the funeral costs from the deceased’s holding. They typically pay for the main costs like the funeral director’s services, purchase of coffin, cremation charges, etc. The deceased’s family and loved ones may have to sort out other expenses like the headstone, flowers, and the wake keep ceremony from alternative funding sources.
4. Paying funeral expenses from the deceased’s estate
It is possible to pay for funeral costs from the deceased’s estate, but with certain conditions. The release of funds typically has to wait for a grant of probate, but instead of issuing a check to cover the costs, the deceased’s family can ask the funeral home to bill the estate directly.
Funeral homes anticipate situations like these and often have a contract ready. The family member signing the contract stands as a guarantor, agreeing to cover the funeral bill if, after the grant of probate, it is discovered that the deceased does not have enough funds to pay for the funeral.
Getting the funeral director to charge the funeral costs to the deceased’s estate is easier than sourcing funds elsewhere and then seeking reimbursement. The reason is that debts are given priority when distributing a deceased person’s assets, and with a detailed bill from a funeral home, it is easier to prove that sums are owed.
5. Pre-paid funeral plans or insurance
A funeral plan allows a person to pay upfront for their burial while alive so that their family does not have to bear the burden when they pass. It acts as a form of trust, with some insurance elements added. In situations like these, the family can use this insurance plan as intended without waiting for the disbursement of the deceased’s assets. However, most funeral plans do not cover everything needed for a funeral.
Some cover the basics like a limousine procession, church service, cremation, and viewing of the corpse, leaving out costs of burial plots and other additional costs. But with the funeral plan covering the bigger expenses, the deceased’s relatives can easily pool resources for the rest.
However, there is no central directory to check whether the deceased testator had a funeral plan or insurance package. So, it is important to check their papers and private documents in their will or ask their personal solicitor if they left behind instructions.
Funeral expenses can be paid before probate through any of the five means above. Depending on which is available, you can pay from a joint account, through a third party, through a financial organisation, from the deceased estate, or via a pre-paid funeral plan. For more specialised advice, you can book a consultation session!