Tough Questions Part II - Funeral planning and end of life costs

From my CBC Radioactive column with Peter Brown - October 8, 2009:

Continuing from last week, this month, as Radioactive's personal finance columnist, we're helping listeners look at some of the hard financial questions you need to ask your spouse or parents about funeral planning.

How tough is this discussion for most families?

Obviously, it's extremely emotional. Most individuals will only go through it once or very few times in their life and that's what the industry is counting on. There are some great folks out there in the biz, but the industry is counting on you not knowing what you're doing, feeling guilty to over spend and since it's such a quick process - usually just a few days after death - and so stressful, people don't always make the best decisions.

That's why we wanted to cover it in this week's tough questions. Remember too, funeral directors are not clergy, even though some people trust them implicitly. They're in the business to make money. You do not have to buy the whole bundle of services.

What does the average funeral cost?

I went to three different places in town for pricing and info. I was told that the average is $4,000 - $6,000 - but that number can vary widely. It all depends on the service, open casket or not (which costs much more), cremation, burial and more. According to AARP, funeral and burial costs can easily reach as much as $10,000. The average cost of a traditional adult funeral in 1999 was $5,020 without any extras. Flowers, obituary notices, burial liners or vaults, limousines, acknowledgement cards -- they all add up to a major expenditure.
and if you choose burial, the costs continue to rise.

What's the cost difference for burial?

A wood casket for example might run $250 and the Cadillac as high as $35,000. The average is around $3,500-$5,500. You can also rent one as well for cremation or viewing. The price for the actual plot and all that's required there will also add to the bill -- from about $1,700 at a city cemetery and upwards. That's not factoring in the head stone of course.

A funeral provider may not refuse or charge a fee to handle a casket you bought elsewhere.
And with burial comes embalming, something that is encouraged, but actually not a necessity in all cases.

Embalming is rarely required when the person will be buried within 24 to 48 hours.
Another thing to know is sealed caskets cannot preserve a body. Sealed caskets cost hundreds of dollars more than unsealed caskets It actually costs the casket manufacturers only about $12.00."

What kind of cost comes with cremation?

It's quite a bit less and if there's no viewing, even less. Cremation with pick-up and no service will run about $1,500 - $2,000. But you may still have costs like an obituary which averages $300 - $500 per day in Edmonton for example.

What are the questions we should be asking now?

First, that you can negotiate. And with a little advance thinking about it, hopefully we make better and less emotional decisions. After all, it can be an extremely costly event. Funeral services are one of the largest purchases consumers will make, right up there with a car and a house.

Second, if a parent for example is in long-term care at a non hospital facility, you need to make plans ahead. I know it's terribly morbid, but if the family is on vacation for example, these places don't have a morgue and need to address deaths quickly. If they have to make the decision, it might cost you hundreds of extra dollars.

Tune in next week and we'll discuss the "how" to be pay for a funeral, pre-planning and more.