Pre-planning funerals can help those left behind

When Sarah Holland’s mother died this year, she knew precisely what to do. That’s because her mom left behind an eight-page “in case of death” document that contained specific instructions on funeral arrangements.

“She starts out with, ‘I thought Daddy’s funeral was very nice and something like that would be just fine with me,’” said Holland, a wealth planning consultant with Manulife Wealth in Prince George, B.C.

The document noted there was an urn — on the top shelf in the hall closet — that could be reused for her ashes. There was a playlist, including three versions of Amazing Grace, Bridge Over Troubled Water by Simon & Garfunkel, and Come Fly With Me by Frank Sinatra.

“[Instructions for] the reception has things like, ‘Have lots of hot and cold nibbles if possible and not too many sweets. Seems to be a trend these days to leave the sweet stuff uneaten,’” Holland said.

And for the cremation coffin? “Don’t spend any more money than is necessary … the cheap coffin is fine, as no one will be seeing it and I won’t care!”

“It’s lovely to have that sort of information provided to you,” Holland said. Other instructions included the location of her mother’s will and safety deposit box, address lists, and credit card information.

Talking about death

Things don’t always run that smoothly when someone dies, Holland said. And it’s a reminder of the role financial advisors can play in making a difficult time easier with some advance planning.

“It can be awkward. Some clients are under the impression that everything’s going to go smoothly after they die, and they can count on their children to get along. Nobody’s going to fight about their possessions,” she said. “That’s lovely if that does happen, but you might want to plan for trying to avoid some of those potential issues.”

Holland often kickstarts the discussion by telling stories about things she’s seen happen to other families.

“I’ve seen sisters who didn’t talk for years because of an argument about the teacups, which sounds trivial and ridiculous, but these sort of things happen,” she said. “If I had a crystal ball to tell you exactly when you’re going to die, things would be so much easier when it comes to planning — both for retirement and estate planning.”

Even if a client thinks they’re prepared, they might not be.

“I’ve asked clients I they have a will, and they say yes. Then, when I probe a little bit more, it’s 12 years old and the kids have grown up since then,” Holland said. “And do people know where it is? Can they find it after you die?”

Her experience with her mother’s death will inform how she educates people in future.

“I knew a lot of what my mom wanted, but it was still really nice to have that sort of very specific information,” she said. “I will probably be using that as an example when I’m talking with clients or advisors.”

Funeral costs

Mark Duffey, co-founder, president and CEO of Mississauga, Ont.-based Everest Funeral Concierge, said most people choose not to prepare for their funeral.

“Nobody wants to talk about it, and the de facto option for most people on funeral planning is to do nothing,” he said.

That can lead to headaches if the family isn’t sure of the person’s wishes, he said. “The daughter says ‘Dad wanted to be buried at sunset.’ The other says, ‘No, Dad told me he wanted to be cremated.’ It’s hard to reconcile those two.”

If the advisor goes over the basics, including whether they want to be buried or cremated and the desire for a service, that can smooth things over during a time when everyone is “emotionally drained,” he said.

“I am going to be able to remind you that this is what your dad said, this is what your mom said. And keep in mind it doesn’t have to be in writing,” Duffey said. “It’s the next of kin that makes the decision, not the deceased. But that guidance can be really helpful.”

Prepaying a funeral may take the financial burden off the family, but it can be fraught with issues, he said. It’s not the 1960s anymore, where people stayed in their communities.

“Now, they end up moving to be near the oldest child who’s going to be the caregiver. If you’re living in Toronto, and now they live in Vancouver, your prepaid funeral in Toronto is not going to be much good,” Duffey said.

There’s also a risk that nobody in the family is aware a funeral has been prepaid and will pay a second time at a different place.

“If the advisor has that conversation about death, they’ll know that — and can ask for a copy of it and put it in their file,” he said.

Duffey isn’t a fan of buying funeral-specific insurance.

“It’s just money. It’s not advice or anything, and then it generally doesn’t get paid until way after a funeral,” he said. “There’s a lot of steps you have to go through, like getting the death certificate and filing it.” 

Holland said the use of insurance to cover funeral costs should be looked at in the context of the overall financial plan, as people often focus on just one element.

“People should be focusing on the overall needs after their death for their survivors — which yes, may well include insurance — rather than just how to pay for a funeral,” she said.

Duffey has seen a shift in funerals, with fewer people opting for traditional ceremonies with burials. That experience matches figures from the Cremation Association of North America: 75% of people who died in Canada last year were cremated, up from 59% in 2008.

“To handle a traditional funeral, we advise people you need $10,000 to $20,000 available,” he said, adding that a direct cremation with no service at all can be as little as $1,000.

Costs can be significantly higher if you need to purchase a cemetery plot, which run around $10,000 — though it can be higher or lower depending on location. And if the person dies overseas, or wants their body repatriated to their home country, that can add a significant expense.

“It’s going to cost about $10,000, just shipping and the container, and that’s not the funeral,” he said. “That’s just moving the body.”

While talk of death can be macabre, Duffey sees it as a way to build a stronger relationship. “Don’t use a bunch of flowery language. It’s facts, figures, things you need to know,” he said, adding that documenting wishes will be helpful.

“When the time comes, you’re not going to have a vote. You’re the one who’s gone, and I think your family would appreciate it.”