New Zealand’s cost of dying crisis means dying is becoming unaffordable for many, so planning ahead is important.

While other options exist, funerals remain the number one choice for Kiwis, but like weddings, they come at a cost.

The average cost of a funeral in New Zealand is around $10,000 but according to NZ Seniors, only 5 percent of Kiwis pre-plan their funeral. So, who gets left with the bill?

Setting up a funeral trust can be a good option. Your lawyer can help you do this, and it’s a legally allowable way to release funds for residential care assessments so has some real benefits. Having the funds there also means you can get a discount for paying the funeral costs up front. Most funeral homes offer a pre-paid funeral option too but check first to see if its inflation adjusted so there are no surprises.

Don’t get caught out.

While it is common practice for family members to pay for funeral costs on the understanding they will be reimbursed from the Estate. Beware. Once an invoice is paid it ceases to be a debt, and there is no guarantee of reimbursement unless the executors or beneficiaries agree.

The humble Will

The humble Will, often undervalued and underthought of, is in fact a robust tool for setting out your express wishes and ensuring the payment of any debts are made from your Estate. If there is a Will, banks will usually allow for the payment of funeral costs from a deceased’s account. This can be done relatively easily by providing the bank with a copy of the funeral invoice and completing a form signed by the Executor of the Will.

Things can get sticky though if there is no Will.

Funds of the deceased will be  frozen on notification that an account holder has died.

Without a Will a deceased’s estate goes into intestacy. That means the distribution of your assets will be determined by law. How they are distributed may not be at all how you or the deceased would wish.

Trusts and Life planning