What Are Final Expenses?
Author: weissheiss
Final expenses are the costs attributed to a person’s estate, upon the death of that person. The most basic final expenses are those of funeral expense, probate, legal costs and any outstanding debts. These expenses are borne by the estate or any survivors of the estate and paid by funds available in the estate or funds supplied by the survivors of the estate.
Funeral expenses can run from as little as $2500 for a simple cremation, to as much as a person wants to spend. The average traditional funeral runs between $10,000 and $15,000. Many costs that people don’t associate with a funeral, are costs, such as a gravesite, the opening and closing, (digging), of the gravesite, headstones, newspaper announcements, wake luncheons, etc. It can result into a large amount of money.
Many people rely on the proceeds of life insurance to pay for those costs.
Another aspect of final expenses is the cost of probate. Probate is the term to describe the public settling of an estate. Bills and debts need to be paid, insurances need to be collected or other assets often require disposition. The executor is the person or corporation assigned the responsibility of doing what is required on behalf of the deceased person to settle the estate according to the terms of the will and the laws of the province of domicile. There is also a “probate” cost that is payable to the province in which the person was domiciled. It is usually a cost of thousands of dollars per $1,000 of value in the estate. Named beneficiaries proceeds of insurance and jointly owned properties of all type do not pass thru the estate for probate purposes, but in fact pass directly to the survivor or named beneficiaries.
A final income tax return must be completed and any taxes due payable. Capital gains taxes on investments other than a principal residence can be substantial.
A lawyer is usually retained and charges are made for the completion of all required paperwork. These costs can run into the thousands of dollars.
Depending on the size and complexity of a person’s estate, final expenses can run from a minimum of a few thousand dollars to millions of dollars.
The Benefit Guys work, with clients who have family businesses and large estate details, in conjunction with the client’s accounting and legal professionals. It is often a complex procedure to structure affairs and assure liquidity to cover final expenses in a large estate. On our ebsite, you will find more information dealing with some of the challenges.
Most people like to have permanent life insurance in place to assist with the costs of final expenses. Consult with your local Affiliate Advisor or contact our head office for further information on this topic.
Author: John Kovats, CLU
The Benefit Guys
April 2010
Posted in Final Expenses Insurance | 
Tags: Amount Of Money, Cremation, Domicile, Executor, Funeral Expense, Headstones, Paperwork, Proceeds