When families are confronted with the shock of a death to a family member they have to make decisions that they never really thought they would have to contemplate.
Furthermore a death in the family can be very emotional which can freeze decision making and lead to indecision, impulsive costly decisions or decisions that could cause regret or family disagreements.
These decisions are in part based on cost and also the deceased’s philosophical approach to death.
What follows is an overview of how to prevent second guessing of testator’s wishes in respect to funeral arrangements and expenses that could amount to disagreements and potentially extra costs.
Funeral Expenses and the Costs of Dying
In estate administration, the expression “funeral and testamentary expenses” is commonly used. Funeral and testamentary expenses are those expenses incurred from the first moment after death. They are distinguished from debts incurred during a deceased person’s lifetime and include general expenses which are a necessary incident to the proper performance of the duties of an executor or administrator.
The relevant principle in relation to funeral expenses is that reasonable funeral expenses are payable out of the deceased’s estate. The question of what is reasonable has to be considered in the context of the testator’s express directions, cultural background and burial practices.
Not surprisingly as the cost of land prices rise, cremation is slowly moving ahead of burial as the preferred form of funeral arrangements in Australia1
In Sydney, a basic cremation is currently estimated to cost between $600 and $700, but can extend to $3,500 to $5,000 if some form of “memorialisation” is chosen. A burial cost is currently estimated to cost between $8,000 and $10,000 including the land and the rights to the grave in perpetuity. Furthermore a burial cost can rise to as much as $250,000 for a full high-end service utilising a family crypt 2.
However, courts have ruled invalid express directions by testators in their Will to create a trust to maintain an extravagant tomb, where the cost of this was seen as unreasonable.
The courts however recognise the moral and physical necessity of a funeral in the context of reasonable testamentary expense and have likewise recognised the appropriateness of erecting tombstones or other monuments to mark a testator’s grave to the extent that the sum paid is a reasonable amount.
Funeral Arrangement Responsibilities
It is the Executor that has the right to the possession and custody of the deceased body until its proper burial or cremation.
If an Executor is not available or there is no Will the court may appoint someone competent, but complete stranger to act as the administrator of the Estate.
The duty of burial or cremation, does not exist in the case of an Administrator whose appointment can only be made by the Court sometime after death. In such instances the duty of disposing of the body falls upon certain family members or in the absence of family members upon the person under whose roof the deceased dies.
Therefore to avoid indecision or decisions that could cause family disagreements Will makers should firstly choose a competent Executor or Executors to act jointly.
The Executor is the person named in the Will who will assume the responsibility of acting on the instructions outlined in the Will.
Depending on the complexity of the estate and family relations the responsibility of the Executor requires time, diligence, and sensitivity to the needs of grieving family members and beneficiaries as well as a degree of expertise.
In respect to family dynamics there may be a need to appoint more than one executor to administer the estate. In such instances the Will should be carefully drafted to ensure that that there are suitable mechanisms to deal with disagreements amongst executors.
Furthermore alternative Executors should be considered in the event that the first choice of executor is not available.
Specific Funeral Instructions
Further adding to the decisions an Executor has to make is the myriad of choices available when it comes to arranging funeral service and “memorialisation” of the deceased. From the traditional funeral service which includes a visitation and a funeral service where the deceased is present in an open or closed casket to graveside service which includes one service held at the graveside prior to interment, there is a wide variety of funeral service available from which an executor may choose from.
In addition, there is also the method of final disposition of the deceased’s body which will need to be considered. Generally, the body may be buried or entombed, cremated, or donated to medical science research.
To avoid leaving your Executor or your family with difficult funeral decisions in the event of your death which may lead to costs and disagreements, a Will should address the type of funeral service you would like in the event of death. For example, whether you wish to be buried or cremated, choice of venue, whether a religious service should be held and if need be specific details as to your preference for “memorialisation” that you would like.
In the context of the size of the estate such decisions should be reasonable in respect to costs and preference.
Liability for Costs of Funeral Arrangements
In New South Wales the Executor incurs costs personally and not in a representative capacity after the death of the deceased. Hence the cost of the funeral expenses must be correctly incurred. The Executor or for that matter the relative (if there is no Will) will therefore only be entitled to be reimbursed from the Estate Assets for funeral expenses including the erection of monuments as are reasonable having regard to the estate and the condition of life of the deceased3.
Our Will & Estate Planning Lawyers at Pavuk Legal can assist you with a full range of legal services in respect to your Estate Planning needs including preparation of Wills, Testamentary Trusts, Advanced Health Care Directive, Power of Attorney, Binding Death Benefit Nominations, Letter of Wishes, Probate and Management Services post death. With the right tools and processes your Estate Planning desires can be implemented appropriately for both you and your intended beneficiaries.
For further advice in respect to the choice of executors, or specific instructions in respect to funeral arrangements and the memorialisation and the administration of an estate contact please contact us.
1 page 15 – Australian Financial Review – Cremation an, increasingly popular choice in a tough economy.
2 page 18 – Australian Financial Review – op cit.
3 Chesterman v Mitchell (1923) 24 S R (NSW).