Losing a loved one is overwhelming, both emotionally and financially. One of the first questions families often ask is: “Who pays for the funeral, and how do we cover other immediate expenses?” While it may be tempting to grab a loved one’s credit card or cash to start covering costs, doing so may lead to serious legal issues, even if your intentions are good. Let’s walk through what to avoid, what you can do instead, and how to protect both your family and your loved one’s legacy.
Who Pays for the Funeral When Someone Dies?
Funeral expenses are classified as “priority debts” when someone passes away. Working with the funeral home and paying the associated funeral fees is often the first administrative action taken after someone’s death and usually occurs well before payment of other debts or distributions to heirs.
This is where things can get complicated. An original death certificate is often required to access your loved one’s estate or trust funds, but the funeral home only processes/provides the death certificate once they have been paid. The decedent’s bank accounts, investment funds, and life insurance benefits are all unavailable unless you provide an original death certificate to the financial institution. Generally, probate proceedings and even claims for surviving spouse or dependent benefits cannot be initiated without a death certificate. While some funeral homes may be sympathetic to this liquidity dilemma, it’s not something you can reliably count on. This catch-22 scenario can leave family members feeling emotionally overwhelmed and financially cornered.
Pay Out-of-Pocket and Get Reimbursed by the Estate
If you have the means, you can certainly pay the funeral costs yourself and later request reimbursement from the estate. Keep detailed records and receipts, and communicate with the executor, trustee, or estate attorney to ensure your expenses are documented.
There are certain risks in paying the funeral expense with your personal funds. As an example, if the estate is insolvent (i.e., debts exceed the assets), Virginia Code § 64.2-528 limits funeral expenses to no more than $4,000. It should be noted that funeral expenses hold third-priority status behind general costs and expense of administration (such as court and legal fees) and the Family Allowance under § 64.2-309. If you personally paid more than $4,000 for funeral expenses, you may only receive reimbursement up to the legal limit. In some cases, there may not be enough funds in the estate to provide any reimbursement at all.
Common Mistake of Using a Deceased Person’s Credit Card
Although it may seem harmless to use a deceased person’s credit card to pay urgent bills or funeral costs; doing so will likely be treated as fraud (regardless of your relationship to the decedent). “Dad would have wanted me to use his credit card” is not a valid defense against credit card fraud. Any charges made after a family member’s death-even with good intentions-can be viewed as unauthorized and criminal.
The use of a decedent’s credit card can result in personal liability and criminal charges of identity theft and/or fraud. Often, the use of a decedent’s credit card will delay and further complicate the estate administration process. Not to mention, the use of a decedent’s credit card may increase mistrust among family members in an already emotionally charged situation.
In some cases, a person is listed as an “authorized user” on the decedent’s credit card. Although this varies by financial institution, most authorized user’s access ends at the primary account holder’s death. In contrast, someone listed as a co-signer or joint account owner may retain the authority to use the card or account after the other account owner’s death. Co-signer and joint account designations are more common between spouses, but much less so between parents and children. If using a decedent’s credit card is deemed necessary, it is best to contact the financial institution before doing so.
Proactive Estate and Funeral Planning Can Prevent Stress
Many families face emotional and financial challenges because the deceased did not have a proper estate plan in place. Without clear documentation, such as a will or trust, accessing funds and managing the estate becomes significantly more difficult.
Encourage your loved ones (and take the time yourself) to create or update a last will and testament or revocable living trust. When executing your estate plan, you should inform your executor or trustee of their future responsibilities. In addition to establishing an estate plan, consider using payable-on-death accounts, beneficiary designations, and/or pre-paid funeral arrangements. Planning ahead doesn’t just protect assets, it protects your legacy.
In some instances, it may be appropriate to title an account in joint ownership with the right of survivorship with a trusted family member. This allows continued access to funds upon the death of the primary account holder, until death certificates become available and further access is granted. However, naming someone as a joint owner on an account carries risks that should be thoroughly discussed with your estate planning attorney.
When someone creates a revocable living trust, they can choose to appoint a co-trustee to serve alongside them during their lifetime. This co-trustee often continues to manage the trust immediately after the original trustee’s death. As a result, the successor trustee has immediate access to the trust’s accounts, which can be helpful for covering funeral costs and other initial expenses.
Keep Clear Records
Regardless of how expenses are managed, it is essential to maintain accurate and detailed records of all payments. Records should include who was paid, how much, and for what purpose. This includes saving canceled checks, receipts, and invoices not only from the funeral home or cemetery but from all transactions made after a loved one’s passing. Keeping thorough documentation helps ensure smooth reimbursement, distribution of assets, and protects against potential misunderstands or disputes.
Final Thought
In moments of grief, financial stress can feel overwhelming. It’s natural to want to “just take care of things” quickly. But when it comes to paying for a loved one’s funeral and administering their estate, the most important thing is to move through the process thoughtfully and systematically. Hasty decisions, no matter how well-intentioned, can cause long-term legal and personal consequences.
Take a breath. Ask questions. And don’t be afraid to get legal guidance if you’re unsure what to do next. We at Johnson, Gasink & Baxter, LLP are here to help if you need guidance through this process.