Post by ProfessorArtNerd on Mar 6, 2023 16:22:47 GMT -5
Please forgive the dumb question. But I thought life insurance was supposed to pay for final costs, debts and medical expenses, first and foremost. Is this incorrect?
Reason I’m asking- I mentioned this in the weekend Randoms, but my aunt, in a major plot twist, never updated her life insurance to have my sister and me named as beneficiaries. It’s her brother (my dad) and their sister. Her will names us as her sole beneficiaries, but I know we can’t do anything about all this.
Well, living aunt suggested that she and my parents split the cost of the funeral so my sister and I don’t have to pay. And my mom doesn’t want to. It’s a small fraction of the found money that they got, this isn’t going to clean them out of, again FOUND MONEY.
I am so hurt and angry that my parents are trying to stick us with this bill. Mom’s response was “well you’re getting all that money” from the sale of her house and her retirement account. All of which takes time. I don’t currently have funeral money laying around.
Sadly for you, life insurance is just a payout for the beneficiaries. When my H and I got it, we planned enough to cover the mortgage and college expenses for DD. It would certainly also be used for funeral expenses since that would be need to be paid.
Yes, many older folks keep up payments on a small insurance policy to cover funeral expenses so as not to be a burden for their living relatives. That is very common.
I do not think you have to use your insurance payment to cover the deceased’s outstanding debts/expenses (like medical bills) - the estate does that or it goes unpaid.
Debts and medical expenses of the deceased usually come out of the estate before the remainder is distributed to heirs. The estate bequeathed to heirs is made up whatever assets remain after her debts have been paid.
The insurance money, in contrast, doesn't belong to her estate unless the estate was named as a beneficiary.
She probably didn't enter a contract for the funeral, so it isn't her debt. That is paid for by whomever wants it and agrees to pay for it. That could be the insurance beneficiaries, or the heirs, or someone else. Or there doesn't have to be one.
Any debts come out of the estate, not life insurance. Life insurance is supposed to provide for anyone who might be affected financially by your death.
That said, it seems weird for her siblings not to pay and to shove it down for you. Funeral expenses are generally a family thing but it doesn’t have to come out of the estate at all. Normally IMO it doesn’t.*
As you said, timing wise, that doesn’t really line up. People often do use life insurance funds for that though because funerals are expensive and it’s money they are getting right away.
I’m sorry they are making this stressful for you! Where do they think you are getting the money?
*ETA if you do pay out of estate funds (if your area allows it, you might need to get permission) it’s a mess because there is often a cap and the funeral home has to bill the estate directly which can be an ordeal.
You’re not legal next of kin. Therefore you are not responsible for planning and paying for the funeral expenses. Easy way out, don’t sign the contract at the funeral home. POA is no longer valid after the death UNLESS there is a provision made that person is responsible for the final disposition decisions (most attorneys do not include although they should). The Will and executor/executrix also plays no part in funeral planning (at least in all the states I’m familiar with).
While life insurance can pay (or reimburse) for funeral costs, I don’t think it’s accurate to say it is “supposed” to be used that way.
Some people have modest funerals or no funerals at all - life insurance is for whatever the beneficiaries choose to spend the money on.
I know you’re hurt and upset that aunt didn’t change her beneficiaries, but you and your dad and other aunt don’t have to do anything you don’t want, regardless of the source of the inheritance.
If you don’t want to contribute to the cost of a funeral, then don’t. Or just contribute what you want, guilt free. If that means scaling down, so be it. Your aunt won’t mind and it might bring you some peace about the situation.
Post by ProfessorArtNerd on Mar 6, 2023 16:36:50 GMT -5
My sister is the executrix of her will and was her power of attorney. she was aunt's godchild. Its so upsetting bc she didn't talk to either of her siblings in YEARS. Like. They know this is a mistake/oversight.
Also most funeral homes will not bill the estate because of the unknown length of time it will take to be settled. Funeral homes will typically require payment by day of service (long gone are the days of the honor system). If a family does not have personal funds available then the funeral home can do an assignment on the life insurance proceeds once confirmed. Please note that a lot of funeral homes use a third-party for assignments which will result in an additional fee.
Post by ProfessorArtNerd on Mar 6, 2023 16:42:24 GMT -5
Sorry- for clarity's sake- the funeral already happened. She was supposed to have "funeral coverage", whatever that even is, but we can't seem to find it, through her former employer. that's how we found out about the life insurance.
I'm sorry people are acting out. As others have pointed out, death and money have a way of causing this.
I agree with the idea that the estate typically pays, prior to disbursements of funds to any heir(s), assuming there's any money there in the first place. Regarding life insurance specifically, I don't think that's a hard and fast rule. It will certainly be paid out before you can sell the house, but I don't think life insurance is typically processed and paid out immediately either. Are there no other liquid funds available?
Regardless of who ultimately takes responsibility for the funeral costs in the long run, can your aunt or your dad and your aunt pay them in the short term?
ETA: I should say, I have no expertise in this area, but it's how it went with my MIL and her estate. I think morticia is our resident expert!
Ok douche, go ahead and call it mud. My husband DID have halitosis. We addressed it after I talked to you girls on here and guess what? Years later, no problem. Mofongo, you're a cunt. Eat shit. ~anonnamus
My sister is the executrix of her will and was her power of attorney. she was aunt's godchild. Its so upsetting bc she didn't talk to either of her siblings in YEARS. Like. They know this is a mistake/oversight.
I don't know. People get weird around money and death. They will disinherit people closest to them and give large sums to people they've never met or had troubled relationships. If that is what her documents say, then she may have meant for them to get some and you to get some.
(DH and his brother were named as the only beneficiaries of a great aunt whose niece had provided years of in home care. Shitty move but definitely deliberate. Neither of them had ever met her. In the end, her lawyer fees, debts and funeral costs meant they actually inherited around $50 each. In this case, your aunt may have meant the money as a last way to make amends with your father and aunt.)
Too often death and money strains family relationships.
This. Ugh. I’m scared for dealing with this shit someday given how dysfunctional my family already is.
And while everyone else is right, I can’t imagine a parent saying their kid should pay for the funeral of their sister. That seems so wrong. What does you dad say?
My grandpa hasn't talked to his son (my uncle) in 20 years and he is getting half his estate. It doesn't matter if it was an oversight or planned. He is dead so we will never know.
Yes, it sucks but being upset won't change anything.
How much is a funeral these days? I used to hear $5K, but I imagine that's an outdated number.
It really depends, but $10k is probably a better number. You probably COULD do it for $5k, especially if the decedent chooses to be cremated, and if the plot is already paid for.
My grandpa hasn't talked to his son (my uncle) in 20 years and he is getting half his estate. It doesn't matter if it was an oversight or planned. He is dead so we will never know.
Yes, it sucks but being upset won't change anything.
If the funeral happened, who paid for it??
We are being billed for it. Like I said, there's supposed to be funeral coverage but since neither my sister nor I are the beneficiaries for her work benefits, we can't find anything out. Since we were named as beneficiaries of her estate, we signed for the will. Stupid, now I know that, but I can't change it.
I mean, to be fair, this is found money to you, too. I'd see if your aunt or dad has the funds to pay the funeral home now and you could pay them back out of the other estate money. Or see if they'll split it?
I agree that there are no rules on how life insurance money is spent.
Google tells me that funeral costs usually come out of the estate and legally the executor would be in charge of it.
I've seen life insurance advertised as "use this for burial expense". And usually those are low level whole life type policies. That doesn't mean legally the person has to use it for that purpose.
I typically see higher face value policies on term life insurance which is usually used for loss of income of the deceased, i.e. any living expense such as mortgage, rent, groceries, car payments, school costs, child costs etc.
ProfessorArtNerd - That's terrible that your parents are putting you and your sister in that position. I thought it was usually next of kin that would decide if/how to address a funeral/celebration of life/etc. and they would typically pay for it - a lot of times it would come out of life insurance if the next of kin was the beneficiary, but there's nothing requiring the beneficiary to use it for that.
When my dad passed, he had a small life ins policy through his employer in which I was the beneficiary and it mostly covered the dual service I had for both him and my mom (they passed 2 weeks apart so we combined the memorial) - so for me as the sole beneficiary, next of kin and executrix, it made the most sense to use that cash since it was paid out relatively quickly.
Like others have said, it takes a while for the estate to be settled (my dad's took a year, but things were slower due to COVID in 2021).
All this to say, just because you and your sister are going to receive a large windfall of $$$, that doesn't mean you are responsible for the funeral expenses. THat's shitty that you're even being put in that position. I would not agree to that at all.
How much is a funeral these days? I used to hear $5K, but I imagine that's an outdated number.
There is going to be a wide range on what a funeral costs. If you’re speaking of a “traditional” funeral (service, with casket, and burial to follow). Just service fees and casket $6-8000 is going to be more like it. HOWEVER there are many costs not included but are expected such as, flowers, stationary, honorariums for clergy and music, obituary, catering, and yes even the death certificates have to be paid for.
Also this does not include any costs related to the cemetery (plot, opening and closing, vault, monument, etc).
If you are starting from scratch and want a traditional service and want/need everything you’re going to be closer to $15-20,000. Now this will range based off region and funeral homes (there are discount providers that offer services at a lower price point).
Yes cremation can be a more cost effective option but I’ve also had my fair share of $20,000 Celebrations of Life. A lot of options with cremation ;from your most basic, direct cremation to full traditional services with cremation afterwards. And even with cremation a lot of families still like to place the cremated remains at a cemetery.
So unfortunately there is not a simple way to answer “how much is a funeral”.
Sorry- for clarity's sake- the funeral already happened. She was supposed to have "funeral coverage", whatever that even is, but we can't seem to find it, through her former employer. that's how we found out about the life insurance.
Check her insurance agent that she used for home/ auto if you haven't already.
My grandpa hasn't talked to his son (my uncle) in 20 years and he is getting half his estate. It doesn't matter if it was an oversight or planned. He is dead so we will never know.
Yes, it sucks but being upset won't change anything.
If the funeral happened, who paid for it??
We are being billed for it. Like I said, there's supposed to be funeral coverage but since neither my sister nor I are the beneficiaries for her work benefits, we can't find anything out. Since we were named as beneficiaries of her estate, we signed for the will. Stupid, now I know that, but I can't change it.
If you are being billed, it also sounds like you signed a contract with the funeral home?