A friend in the funeral industry shared some interesting information with me recently – the difference in costs between a funeral for a child in 1920 versus 2014. While there is no exact comparison of all services and items, I have illustrated the similar items today.
|Burial Case or Vault
|Grave Plot *
|Opening and Closing of Grave
|Funeral Home Attendants & Professional Services
* If available – costs vary widely!
Using the Bank of Canada’s Inflation Calculator, $33.50 in 1920 should cost $357.43 today – here is a screen clip – a 996.95% increase with an average annual inflation rate over 94 years of 2.55%! However, funeral costs have risen at a much greater rate. I will leave you to figure out the rate at which those costs have increased over 94 years.
Have you considered your wishes for the future – and do you have resources (read cash) set aside to handle your passing? And don’t forget to add something for catering, flowers and the no-host bar along with meeting your cultural, faith, community and family expectations. It is not unusual today to see funerals and memorials cost more than $100,000!
Is it time to review your plans?
I know this sounds a bit irreverent or flippant however it is meant to stimulate some hard thinking about the real costs of dying. Sure, there are lots of lists around, but I haven’t found one yet that covers everything I have seen in years in this industry. Is this list perfect? Absolutely not, but it will get you thinking about your own and your family’s situation. Remember, not all of these will apply to you – but some will – and the costs range widely.
||Copying and certifying fees
|Paid searches for titles, etc.
||Legal notification to potential heirs
||Legal notification to creditors
|Asset Transfer fees
||Estate Accounting fees
||Terminal Tax Return fees
|Estate Tax Return fees
||Rights & Things Tax Return fees
||Ongoing tax Return fees if estate not settled within 12 months
|Testamentary Trust Tax Return fees
||Preparing and filing tax election fees (estate and personal)
||Executor and Trustee fees (annually until Estate and all Trusts closed)
|Executor and Trustee disbursements – Required Bonding costs, copying, telephone, faxing, certifications, mileage, parking, travel expenses
||Valuation fees – real estate, listed personal property, personal property, real estate and other capital and/or depreciable property
||Transfer costs for title transfer to Executor and/or Trustee and eventually to residual beneficiaries.
|Commissions paid for asset sales: real estate, estate sale, sale of listed personal assets as necessary
||Commissions paid to investment advisors for selling stocks and bonds not held in managed-money accounts
||Income taxes payable – terminal tax return, estate tax return(s), Rights and Things tax return, Trust tax return(s)
|Tax due on transfers of pensions and registered assets to other than spouse
||Shrinkage of realisable asset value due to urgency of sale – tax paid on FMV not $ received – must replace lost $
||Account closing fees on nominee and self-directed investment accounts
|Court Fees for Probate
||Court costs if you die intestate
||Property Transfer Taxes
|Rental fees – safety deposit box or other secure location and Bank fees – estate and trust bank accounts
||Funeral, memorial and related costs – cultural, faith-based, community or family expectations. Wake or similar
||Costs to collect promissory notes owed to deceased – loans to family members and businesses
|Terminal health care costs not covered by Government, group or personal plans
||Legal and Court costs to defend will is challenged or contested
||Payment of all legally enforceable depts. – including ones you guaranteed or co-signed
|On-going pet care
||Costs of care for children and other dependents (maybe your parents!)
||Costs to close your social media accounts and profiles
|Payment for ongoing business management until it is sold
||Short-term emergency funds and ongoing income for survivors
||General insurance costs for vehicles, property, valuables, etc.
||Contract cancellation fees – vehicle lease, cell phones, internet, television, etc.
||Murphy is alive and well – expect a visit along with family discord!
I can promise a few things about this list:
- your estate will have at least one cost not included here;
- you will be very unpleasantly surprised at the total amount of money (and time) involved;
- your estate will be cash-poor – not enough cash in the bank to pay these costs when means that;
- the net value of your estate, without proper planning and a source of replacement tax-free cash, could even be bankrupt which means your family and heirs would get zero.
Would you benefit from assistance in planning your estate?