Final expenses. What do they represent?
Normally, when we hear the term "final expenses" we only think of funeral services when a death occurs. The reality of the case is that it involves many more procedures, documentation and processes that occur after a death and it is important to leave those costs covered with a good plan for final expenses. Likewise, many choose or wait to reach an advanced age to take action when it is always more feasible to start at an early age.
The death of a loved one means the following expenses for the family member:
-
Cost of last illness.
-
Funeral services.
-
Management of existing debts.
-
Death certificate.
-
Tax return on relic flow.
-
Will reading (if there is one).
-
Any expenses incurred in the opening or cancellation of bank accounts, safe deposit boxes, and private documents.
-
Management of any existing business relationship.
How do I prepare for these future expenses?
Part of proper financial planning is having at least 3 to 6 months of your salary saved as an emergency fund. It can be used by your family member to cover most or all of the final expenses generated by the death. Another option is to have life insurance where you allocate a percentage of the death benefit to cover these expenses or have your individual policy directed entirely at them.
Each one of us, we are a different world. That is why it is necessary that you consult what your needs are and thus you will have a better idea of the amount you will need. More importantly, the younger you are, the better contribution you can make. The death of a loved one is not easy. If we have the means, let us show love to our loved ones and at least leave the process that generates death a little less painful.