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 touch base with your professional team – your solicitor and financial adviser, who can help you manage some key issues like locating and honouring your loved one’s will.
The will may discuss funeral preferences, so it is worth taking the steps in the days following the passing of your family member to locate the will and 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.
Funerals can be costly and in general you should allow upwards of around $4,000, though this varies widely depending on the provider and the type of funeral you choose. 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, though you may be reimbursed at a later stage.
To help cover funeral costs, the deceased’s bank may release funds from his or her account. You will need an original funeral tax invoice or tax receipt. If there isn’t enough money available in the account(s) to pay the full funeral bill, you may be able to make a partial payment with the money that’s available.
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.
As mentioned, 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 provides some level of financial support for those experiencing bereavement.
The Bereavement Allowance is a short term income support payment, usually paid for up to 14 weeks to someone whose partner has recently passed away. The maximum payment rate is $794.80 per fortnight, though income and assets tests apply.
If you are already an age pensioner you may be eligible to receive a Bereavement Payment.
Generally speaking, you will need to wait for probate to access and close the deceased’s bank accounts. Probate is a document issued by the courts confirming that 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 a Coroner’s Letter, Grant of Probate, Letters of Administration or a Probate Bond.
If you have a joint bank account, the account can still be operated by you as long as you are a signatory to the account.
Handling the remainder of your loved one’s estate is the task of the executor. He or she is responsible for maintaining and/or disposing the deceased’s assets in order to distribute the estate 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.
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 (personal assets) and removes the need for guesswork or conflict when you pass away.
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 key decisions and be sure to discuss your plans with family, friends and your financial adviser.
In the short term you may be able to access the Widow Allowance. This is a government payment worth up to $527.60 per fortnight, for women born on or before 1 July 1955, with no recent workforce experience who have become widowed since turning 40. Income and assets tests apply.
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 key decisions during this uncertain period.