When you lose a loved one, the last thing you want to think about is money. You want to take time to grieve, to deal with the loss. Unfortunately, you can’t ignore the costs associated with death; they’re growing every year.

These costs will include things like the funeral, the cemetery, burial fees, and even taxes. Keep in mind, there may still be bills from the final year of life, during which out-of-pocket expenditures averaged $11,618 in 2010. Then, there’s the estate tax that has been debated about by politicians for decades. So, the question is, what bills can you actually expect to receive when someone’s life comes to an end?

The Funeral and Cemetery Costs

One of the most expensive costs you’ll encounter after the death of a loved one is that of the funeral. In 2014, the national median cost of a funeral was $7,181. A funeral’s price includes the professional services fee, casket, transportation, embalming, body preparation, viewing and ceremony, and, usually, memorial prints. The prints comprise of a guest book and printed programs for the viewing and funeral ceremony.

The next set of costs will involve the burial and cemetery. Much like the cost of the services at the funeral home, the expenses you can expect at a cemetery will vary depending on who owns the property. Many cemeteries are owned by non-profit organizations, though private companies, like funeral homes, also own some. Cemetery costs can be broken down into three major expenses.

First, you’ll need to pay for the burial plot. This costs around $1,000. Second is the grave-digging service, which roughly costs an additional $1,000. Finally, you’ll need to mark your loved one’s place of rest. Your two options will be a headstone or a marker. A headstone runs from approximately $1,000 to $3,000, while a marker is about $1,000 or under.

The Federal Trade Commission created a checklist that can help you understand everything that’s involved with a memorial service. Know there are money-saving options if you need them.

Estate Tax

Many will have heard of the estate tax, sometimes called the “death tax” by opponents. The IRS defines the estate tax as a “tax on your right to transfer property at your death.” Your estate accounts for “everything that you own or have certain interests in” at the time of your death. You calculate the value of one’s estate by adding up the current fair market value of the items they own, not what the items cost when they bought them.

Will your loved one have to pay an estate tax? It largely depends on the size of their estate. The estate tax only affects estates that exceed $5.6 million per person or $11.2 million per married couple in 2018. Only 2 out of every 1,000 estates fell into the non-exempt category in 2017, according to the Joint Tax Committee.

An estate tax will only be applied to assets left to heirs. Spouses may leave an unlimited amount of assets to each other, claiming what is known as a marital deduction. If your estate is over $5.6 million, the amount of estate value over that number is taxable. For example, if your estate is $5.7 million, the taxable amount would be $100,000. Currently, the maximum tax rate for the estate tax is 40 percent. So, in this case, your estate would owe a total of $40,000 in estate tax. While the top tax rate is 40 percent, the IRS estimates that the effective rate is closer to 17 percent.

The estate tax should not be confused with the inheritance tax. An estate tax paid by the deceased’s estate prior to any heirs receiving any assets. An inheritance tax applies after assets are split up between the heirs and is paid for by the heirs. It should also be noted that an estate tax is a federal tax. Only six states have an inheritance tax today. These states are Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.

Debt Left Behind

If your loved one had any debts when they passed, you may begin receiving collection calls from creditors. These companies may, at first, be polite and inform you that there are still a few bills left to pay. Since your loved one is no longer around, they may say those debts become your family’s debts.

Before you pay or do anything else, consult with a lawyer or financial professional. Generally speaking, you are not on the hook for your loved one’s debts. Instead, these debts should be taken out of their estate. If the estate runs out of money before the debts are paid off, the creditor(s) will probably take a loss.

There are only a few instances where you can take on a loved one’s debts. They have to do with large items that tend to have loans, like homes or cars. If there is still an outstanding balance on the mortgage of a home or the loan of a car, it must be paid. If it is not, the home or car will go into foreclosure or be repossessed, respectively. Again, before paying any of a deceased loved one’s outstanding debts, speak with a professional.

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Having a memorial service can be incredibly expensive, and a burden to deal with while grieving. The benefits of planning ahead of time cannot be overstated. Even though it can be expensive, you won’t regret giving your loved one a proper send-off.

Further Reading

U.S. News — The Hidden Costs of Closing an Estate