Q. I want to ask a relative of mine to make arrangements for my funeral when I pass on as I don’t have any immediate family. I would like the undertaker to be paid as soon as possible. Is there any way that I can leave money so that my relatives will be able to pay the undertaker or could I make some arrangement with my Credit Union? I saw that you can take out insurance on funeral expenses; if that’s possible, could I put a friend’s name on it? What would be the best option? I have a will made but I want this to be separate. Thanking you in anticipation.
Dear Reader,
The first thing that you should note is that your will most likely contains a clause directing your executor to discharge any funeral and related expenses from the proceeds of your estate. Depending on your current financial situation, you may have sufficient funds in your savings or current accounts.
Your bank will generally release funds directly to an undertaker, although frequently this is an extra administrative step for your executor. If you do not have sufficient savings, but have equity in your home, for example, then the undertaker can be paid from the sale of your home or similar.
If your savings are with the Credit Union, you can also make a nomination to any person you choose. This allows the Credit Union to release a maximum amount of €23,000 from your savings to that named person. Any figure over €23,000 would form part of your estate.
It is important to note that this nomination is a gift and the Credit Union cannot attach conditions to it – that is, it cannot be paid out with the proviso that it be put towards your funeral expenses. The person you nominate would usually be a person you put your trust in, of course, but there is no legal obligation on them to use the money released to them under the nomination to pay for funeral expenses.
Various financial institutions also offer funeral expenses insurance, which is essentially a simplified form of life insurance. Depending on your age and health, you would pay a set sum per month which would guarantee a lump sum on your death.
Whether or not this is a sensible option for you would depend on your own circumstances. It is possible that you may end up paying substantially more in premia between now and the date of your death than any lump sum payment.
Every person’s circumstances are different, and you should discuss your various options with your financial advisor or solicitor.
If you have a legal query that you would like answered you can email lawlink@alexoneill.ie or send your query to Alex O’Neill Solicitors, 22 Barrington Street, Limerick. The column is a reader’s service and is not intended to replace professional advice.
