How Estate Planning Can Reduce The High Cost Of Dying — Part 1
THE FINANCIAL BURDEN
After a loved one passes away, families often face substantial expenses, encompassing funeral costs and fees for various professional services, averaging a total of $12,702. The average funeral expense alone stands at $7,267, marking a 7.6% increase over the last five years, as reported by the National Funeral Directors Association.
In addition to funeral costs, families typically incur an average of $5,846 in fees for hiring professionals like lawyers, financial advisors, realtors, and accountants. Here’s a breakdown of these expenses:
Professional Services:
Lawyer fees: $3,910
Realtors: $4,461
Accountants: $2,456
Therapists or social workers: $1,637
Notably, estates undergoing probate—required for about one-third of families surveyed—often face higher legal costs. For these cases, including court fees and lawyer expenses, the average probate process totals approximately $16,800.
Fortunately, proactive estate planning can mitigate these financial burdens. By establishing a well-crafted revocable living trust, managed with the assistance of professionals like us, your family can bypass probate and its associated costs, ensuring a smoother transition of assets following your death or incapacity.
Beyond cost savings, our Life & Legacy Planning Process offers numerous benefits, including asset protection, conflict avoidance among family members, funding for long-term care, estate tax management, and the preservation of your family's legacy. We invite you to discuss your unique needs and goals with us, so we can tailor effective and affordable planning solutions for you and your loved ones.
PAYING THE FINAL EXPENSES
How do families manage these financial obligations? Shockingly, only 1 in 7 families had any expenses pre-paid or covered by payable-on-death funds. Additionally, over half of the families dealt with estates containing debts. To cover these costs:
36.1% used personal savings or investments
42.4% utilized checking accounts or credit cards
Dr. Shoshana Ungerleider, in her analysis of death’s financial impact, notes that many families are ill-prepared and uninformed about these costs, which can lead to significant stress and fear of financial missteps.
“A majority of families are unaware of the true financial implications of death and lack resources to fully understand them,” writes Dr. Ungerleider. “This uncertainty can lead to prolonged anxiety over potential financial mistakes that could jeopardize inheritances and personal savings.”
For instance, improper estate planning might result in Medicaid claims against a deceased person’s home, even if a family member, such as a primary caregiver, resides there.
Effective estate planning addresses these concerns. As your trusted advisor, we provide strategies to safeguard your assets, including your home, while ensuring eligibility for essential benefits like Medicaid. With our guidance, you and your family can navigate the complexities of estate management with confidence and clarity.
Stay tuned for part two of this series, where we’ll delve deeper into the Cost Of Dying’s findings and explore additional ways to alleviate the financial, logistical, and emotional burdens for your loved ones. If you’re ready to begin or update your estate plan, reach out to us today.
This article is a service of Zarda Law, S.C. We do not just draft documents; we ensure you make informed decisions about life and death, for yourself and the people you love. That's why we offer a Legacy Planning Session, during which you will get financially organized and make all the best choices for the people you love. You can begin by scheduling a Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.
