When someone passes away, bank accounts, as well as funds held with credit unions, finance companies, and other financial institutions, are typically frozen. Typically, the assets of a deceased person are frozen until such time as someone is granted probate or otherwise appointed to administer their estate.
Many funeral homes provide a discount for paying their bills on time. The question then becomes, how do you pay a funeral bill as soon as possible when the deceased person has more than the necessary funds to pay, but their bank and other deposits have been frozen or are otherwise unavailable to access?
It is possible to come up with a number of different solutions. In this article, we’ll go over four of the most common methods for paying a funeral bill quickly.
The following are examples of common solutions:
- If a financial institution agrees to release funds to the funeral home, the funeral home will be notified.
- If the deceased person had a joint deposit with another person, the deposit would be forfeited.
- If a family member or friend is able to pay the account in full at the outset,
- If the financial institution agrees to pay the funeral home directly, it is advisable to notify the person’s bank and any other financial institutions where they have funds as soon as possible after their death.
Many banks will agree to release funds directly to a funeral home prior to appointing a formal administrator to oversee the estate’s administration. For those who have already paid the funeral bill, funds can sometimes be released if you can provide proof of payment for the funeral expenses.
It is usually sufficient to complete a few forms and provide the bank with the original death certificate and the funeral invoice in order to receive payment (or a certified copy). A “certified copy” is a copy that has been certified as authentic by a third party, such as a solicitor or a Justice of the Peace.
If you intend to pay the funeral bill, it is best to request a receipt from the funeral director. This is because the receipt, funeral account, and death certificate will be required by a bank before they will consider reimbursing you from funds held for the deceased individual.
Be aware that banks will not always agree to the withdrawal of funds for all of the costs associated with a funeral before someone has been formally appointed to administer the estate.
This means that funds may be made available to cover the primary costs of a funeral, such as the services of a funeral director, the cost of a coffin, and the cost of burial or cremation.
Other expenses, such as those for the tangi, wake, or headstone, are not usually able to be paid in this manner, and you may have to wait until the estate administrator agrees to allow these types of expenses to be paid from the estate.
Banks have procedures that you must follow in order for funds to be released to pay for a funeral account, and you must follow those procedures. In order to make a payment from a deceased person’s bank account, there will be forms to fill out, and the bank forms will explain what documents the bank will require before it will consider making the payment.
If the deceased person had a bank account with someone else in joint names, or if the deceased person had a bank account with someone else in joint names, the account may pass to the surviving spouse or partner as a result of the death. Please keep in mind that the procedures to be followed for accounts held by partnerships, corporations, and trusts are distinct. The following explanation is intended to apply to personal bank accounts in general.
It is common for a couple to have joint bank accounts, which they use to store their money. As an illustration,
Alex and Chris shared a bank account at the time of Alex’s death. Alex has passed away, and Chris informs the bank of this.
Chris is asked to provide proof that Alex has passed away by the bank. Typically, the bank will require a certified copy of the death certificate or the original death certificate.
The bank requests that Chris complete and sign a form that has been prepared by the bank. Chris has the option of seeking independent legal advice before signing any paperwork.
The documents Chris has completed will be reviewed by the bank. In many cases, the bank account will be transferred to the name of the surviving person within a short period of time.
Chris will be able to use the funds to cover funeral expenses once the bank account is established in his sole name (as well as any other accounts).
Someone made the initial payment on the account.
Occasionally, a family member or friend will be asked to contribute to the funeral expenses out of their own pocket. For this purpose, there is occasionally a whip-round around the family. It is best to double-check whether you are making the payment as a gift or as a loan before proceeding, as there is the potential for misunderstandings.
Some examples of how people contribute to funeral expenses are as follows:
- This is a gift.
- The estate will receive a temporary loan until it has “cash in hand.”
- A loan that must be repaid within a specified time period.
- A loan that you do not have to repay within a specific time frame.A
- If the estate does not have enough money to pay back the loan, you will write it off partially or entirely.
For those who are willing to make a payment on the understanding that they will be reimbursed from the deceased person’s estate, it is advisable to have this in writing (preferably by a lawyer) and signed by close family members (for example, a spouse or children) of the person who has died.
It is possible that you will be reimbursed from a bank account that the deceased person has in the event that you pay the funeral account or contribute to it in the expectation of receiving funds from the deceased person.
Request a receipt if you make a payment to the funeral home, and there are two main avenues through which you may be able to be reimbursed:
Immediately following the appointment of the administrator (executor), the funeral account and receipt are forwarded to the administrator. You may be reimbursed by the administrator after any bank or other deposits have been made available.
I just read an ebook from WSOGeek.com, tell that you may be able to request a reimbursement from your bank prior to the appointment of the administrator. The bank will ask you to fill out their forms and will most likely require you to provide them with the receipt from the funeral home, the funeral account, and the death certificate.
What happens to funds that are not held by banks?
Similar procedures will be followed by other financial institutions, such as superannuation funds, credit unions, and finance companies, which are not specifically mentioned in this article.
What if I am asked to arrange a funeral for someone—will I be required to foot the bill?
Depending on the arrangements you make with the funeral home, this will be the case. The estate may be liable for the funeral director’s account if there are insufficient “cash” funds available to pay the account by the due date, and you may be personally liable for the account payment.
It is recommended that you check with the deceased person’s bank before making funeral arrangements, unless you are personally willing to pay for the funeral.
When someone passes away, their bank accounts and other deposits are typically frozen. There are a number of different ways to pay a funeral bill quickly. Many banks will agree to release funds directly to a funeral home prior to appointing a formal administrator to oversee the estate’s administration. Funds from a deceased person’s bank account can be used for funeral expenses. If the deceased person had a bank account with someone else in joint names, the account may pass to the surviving spouse or partner as a result of the death.
Please keep in mind that accounts held by partnerships, corporations, and trusts are distinct. It is possible that you will be reimbursed from the deceased person’s bank account if you contribute to their funeral expenses. It is best to double-check whether you are making a payment as a gift or loan before proceeding, as there is potential for misunderstandings. You may be able to request a reimbursement from your bank prior to the appointment of the administrator. The bank will ask you to fill out their forms and will most likely require you to provide the receipt from the funeral home, the death certificate, and the funeral account.