Losing a loved one

One of life’s greatest challenges is the loss of a loved family member – particularly a long-term spouse or partner. Knowing where to start can be a big help at this difficult time.

When a loved one passes away

The loss of a loved one can see you juggling multiple balls at once. There is a lot to deal with and, at a time of immense grief, it can help to talk to your solicitor and financial adviser, who can help you manage important tasks like locating and honouring your loved one’s will.

The will may discuss funeral preferences, so it is worth locating it as soon as possible after your family member’s death so you can take appropriate steps. If you find it too hard to make funeral arrangements yourself, a close relative or friend or the executor of your loved one’s estate can make the necessary arrangements on your behalf.

Organising a funeral

Funerals can be expensive, in general costing upwards of $4,000, although this varies depending on the type of funeral. Your loved one may have had a prepaid funeral arrangement in place. If so, this will certainly help to manage the cost.

Bear in mind, the funds held in your loved one’s estate, such as super savings or a life insurance policy, may not be released in time to meet the immediate funeral expenses, although you may be reimbursed at a later stage.

The deceased’s bank may release funds from his or her account to help cover funeral costs. You will need to provide the bank with an original funeral tax invoice or tax receipt to access these funds. If there isn’t enough money available in the accounts to pay the full funeral bill, you may be able to make a partial payment with the money that’s available.

Time to think about organising your own funeral?

The loss of a loved one can sometimes prompt people to consider what steps they can take to organise their own funeral and relieve their adult children of the burden. Your financial adviser can help here.

Pre-paid funeral plans are available that let you pay for your funeral in advance via instalments. Do check what happens if you change your mind about the plan, as you may not be able to get your money back.

The Commonwealth government may provide1 some level of financial support for those experiencing bereavement.

Administrative tasks following the loss of a loved one

You are likely to need to wait for probate to access and close the deceased’s bank accounts. Probate is a document issued by the courts confirming a will has been validated and the executor of the will has the authority to administer the estate.

Financial institutions usually need to see at least one of the following documents as proof of death: a death certificate, medical certificate, funeral bill, solicitor’s or coroner’s letter, grant of probate, letters of administration or a probate bond.

If you have a joint bank account with the deceased, the account can still be operated by you, as long as you are a signatory to it.

Handling the remainder of your loved one’s estate is the task of the executor. He or she is responsible for maintaining, disposing of or distributing the deceased’s assets in line with the will.

If there is no will - in other words your loved one has died intestate - the estate will be distributed in line with the state government formula that applies in your state or territory.

Updating your own will

Sadly, the death of a loved can be a powerful reminder of our own mortality and once you feel up to it, it is important to update your own will. This allows you to state quite clearly who you would like to inherit your estate and removes the need for guesswork or conflict when you pass away.

Planning your own future

As hard as it may be to think about the rest of your life without a loved one, it is important to consider the best options for your future. Allow plenty of time to grieve before making decisions and be sure to discuss your plans with family, friends and your financial adviser.

Looking further ahead, you may feel that now is the right time to downsize your home or move into aged care.

Talking to your financial adviser is an important step in helping you make decisions during this period.

Next: Financial benefits for seniors

References

1 https://www.servicesaustralia.gov.au/individuals/subjects/death-and-bereavement

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