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Thursday, March 31, 2011

You want me to pay for you to attend my funeral? I'd rather you stayed home

Executors don't have an easy job. One of the tricky issues they have to deal with is deciding which expenses should be paid from the estate and which should not.

Possibly the most common question about estate expenses is whether the estate should pay for the airfare, busfare, mileage, hotels etc for out-of-town family members to attend the deceased's funeral. Somehow, the prevailing idea is that the estate has to pay for everyone to come to the funeral. This is completely wrong and an executor who allows those expenses could find himself or herself personally repaying those amounts to the estate.

Remember that money paid out of the estate is money that is being taken directly out of the pockets of the beneficiaries.  For each person who is pleased that you've covered their airfare and hotel, you're going to have an upset beneficiary.

And why should the person who passed away have to pay for people to attend the funeral? If it were my funeral, I'd prefer you stay at home rather than charge me to attend. It's pretty insulting to make the deceased pay for the attendees, don't you think? The law supports me on this. Family members have to pay their own way. If they can't afford it, either they miss the funeral or the other family members get together and pool their funds to help out.

So what can an executor do when faced with a family member who insists that the trip to the funeral must be covered by the estate, since that is what happened when their friend's brother's hairdresser's mom's neighbour died?

If the family member is also a beneficiary of the estate, the executor has some room to work things out. The executor can advance a sum of money to the beneficiary on the understanding that the amount will later be deducted from the beneficiary's inheritance (get it in writing). Even this is risky for the executor; debts of the estate must be paid before beneficiaries get anything, so if the estate turns out to be insolvent, there might not even be an inheritance for this particular person.

Realistically, the executor might not even have seen the will, or had any chance at all to deal with it, by the time the funeral is held. It's very unlikely that the executor will have a good understanding yet about what's in the estate and who is going to inherit what. So when family members discreetly ask the executor where to send their receipts to be reimbursed, he or she might just have to say that everyone is just going to have to pay his or her own way, and that if it's possible to reimburse beneficiaries later on, the executor will let them know.

Yes, I realize that this is going to make the executor pretty darn unpopular. But what's worse, being unpopular, or being popular but personally responsible for a couple thousand dollars of other people's expenses that you wrongly paid out of the estate?

One thing that the executor can do for those travelling to the funeral is provide them with a copy of the Funeral Director's Statement of Death so that they can claim a bereavement discount from the airline.

Welcome to executorship. This is just the first of many minefields.

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