When an individual or family appoints another party to manage the assets and property of an estate, there is often an informed knowledge behind the decision. The selected agent is seen as competent, reliable and practical. Whether they serve as trustee, executor or administrator, this person receives powers to not only disburse the assets but also to manage them and even utilize them in the process of good stewardship.
A trustee may find the funeral rites or memorial service within the management purview. A trustee can be authorized to spend the estate’s money to pay expenses in such cases.
Trusts and Trustees
The fiduciary relationship of a trust doesn't have to grow from a will or other document relating to the posthumous disposal of an estate. Put simply, a trust exists when a trustee is formally placed in charge of the property of another in the interest of the ultimate recipients of that property. Three parties exist here: grantor, trustee and beneficiaries.
Of course, in the case of funeral expenses, the trust most often established would be that given to the executor on behalf of heirs. The will can direct formation of a testamentary trust, determining the size and scope of the executor’s power. The trustee/executor might be a beneficiary as well or might not.
Trustees' Power Conferred by Document
The settlors of the trust, frequently the grantor and an attorney, set the parameters within which the trustee can conduct business. These trustee assignments are common among most trusts:
- Making or assigning decisions regarding the financial investment of assets
- Distributing trust assets to the beneficiaries
- Performing the administrative functions necessary for the trust to function
Of course, each of these areas can be expanded or restricted by the settlors of the trust. As the old adage goes, the devil is in the details. The specific wording of the will or living trust may authorize or forbid the trustee from incurring funeral costs.
What Are Typical Funeral Costs?
The media has observed that the traditional funeral is declining in frequency for cultural reasons and for economic ones over the last decade. But full-scale memorial services are still going on, and downsized events are not without their costs. According to Forbes, some of the estimated charges associated with funerals as of 2022 include:
- Burial casket: $2,500
- Embalming: $775
- Cremation urn: $295
- Cremation fee: $368
- Basic funeral home services: $2,300
- Hearse: $325
These are just some of the outlays paid to a funeral director. A religious service at a church or other house of worship brings its own expenses of facility use, clergy and musicians. These payments could reflect a large remittance by the trustee or one of more modest value.
The legal authority to write the checks may rest in the overall execution of administrative duties or in more explicit trust language directing such expenditures. Either way, there are many times when an executor can pay for these postmortem services.
Can Funeral Costs Be Paid Before Debts?
The myriad expenses associated with the death of an individual begin with their debt. The trustee has a fiduciary obligation to satisfy the estate's financial obligations. According to the American Bar Association, a trustee can actually be held responsible if a debtor is not properly compensated for an obligation that's in arrears. The executor or trustee must bear in mind the priority of urgency relative to the checks written. If authority is in fact vested in this fiduciary, an inexpensive memorial could be ideal.
Adam Luehrs is a writer during the day and a voracious reader at night. He focuses mostly on finance writing and has a passion for real estate, credit card deals, and investing.