It’s the money conversations nobody really wants to have.
Planning for your funeral, preparing an estate and figuring out your will all take time and research, and some experts say it should be part of your financial planning in 2020.
For many, death is taboo, says Melissa Leong, author of finance guide Happy Go Money.
“Even the mention of it brings bad mojo, as my family members would say,” she said.
“But dealing with death, including the financial part of it, is so important.”
Leong says one survey showed that fewer than 30 per cent of Canadians thought about saving up for “final arrangements.”
“People guess they’ll spend between $3,000 and $5,000 on a funeral but the average cost is closer to $8,000 to $10,000,” she said.
“Estate and funeral planning is a way to relieve your loved ones of making important financial decisions and a way to ensure that things are done the way you want.
“Without a will, the law decides who gets everything you own.”
Wills, estates and funerals
Personal finance expert Preet Banerjee tells Global News when your loved ones are grieving, the last thing you want is to add the stress of a financial burden.
“If you die intestate (without a will), then your estate may be distributed differently than you would have wanted,” he said.
“Given that many couples live together before getting married, or choose to live common-law without getting married, it’s possible that your partner gets nothing.”
He says if you have kids, you’ll likely have strong preferences as to who would take care of them in case you die and there is no other parent.
However, if the estate become more complicated because of children or ex-spouses, your estate may be distributed differently that what you imagined.
“Essentially, by setting up your estate planning,” Banerjee said, “you make sure your wishes would be carried out as you would have wanted, instead of being determined by standard rules that may not be aligned with what you would have wanted”
Who is responsible for all this?
Banerjee says if you’re thinking about wills, estates and funerals, you need to think about yourself first.
“It would be wise to think about what you would want to happen to your body, and to get input from your loved ones ahead of time,” he said.
“If you wanted to donate your body to a medical school, get cremated, or be buried, these have different costs.”
Next is getting an idea for these costs and doing some research on various ways to be buried.
“The executor can use this as a guide,” Banerjee said.
“Thinking about this ahead of time can be very helpful: it can reduce the stress of all the decision making and arrangements required when someone dies, and can help anchor the expense.”
Leong says if you’ve made your own will to save money, make sure someone oversees it.
For example, if you’ve downloaded the will from the internet, ask yourself: is it from your province? Have you signed and had it witnessed on the same day?
“Consider seeing an estate lawyer to draft a will,” she said. “There are also online companies such as Willful which will walk you through the process for a more affordable fee.”
Having tough conversations about death
Bringing up these conversations with immediate family members can get tricky.
“It might sound gross to ask your parents about their funeral, but it’s important to be able to honour their wishes and understand how to help them carry it out,” Leong said.
“You don’t have to say, ‘Hey Dad, are you leaving me all of your money?’ Try instead, ‘I’m thinking of doing a will for my family and I wanted to know how you went about doing yours.’ Approach it from a place of caring and respect.”
Banerjee, meanwhile, says different people have different dynamics.
“Some researchers have noted that some people will initiate conversations after reading a book or watching a movie together that includes a family death as a springboard to a conversation,” he said.
“Another opportunity seems to arise after the death of someone close to the family occurs.”
He also recommends starting the conversation if a family member is sick.
“The conversation may naturally extend to what happens if/when you die.”
This year, we’re hoping to take the focus away from making resolutions and put it towards resetting some of the most important parts of our lifestyle: everything from our finances to parenting and more. Each day this week, we will tackle a new topic with the help of the Global News’ ‘The Morning Show.’ Read them all here.
- Global News