From cremation to estate planning, here’s how to keep the cost of death down

If you’ve ever thought about what kind of funeral you’d like to have, you might be interested in planning it yourself — or even paying for it while you’re still alive. In fact, experts say it can be a smart financial decision.

That’s what Janet Gray, an advice-only financial planner with Money Coaches Canada, did recently. She and her husband prepaid for their cremations for a total of around $3,000, making clear they don’t want an expensive funeral to go with it and hopefully making things easier for their loved ones in the future.

“Paying for it now, you’re paying in today’s dollars,” Gray said.

Gray is one of many Canadians who are increasingly looking to keep their after-death costs down by planning in advance.

One of the big decisions you might find yourself making, outside of some religions or cultures that follow specific burial practices, is the choice between cremation and burial.

Cremation is much more popular than burial in Canada in part due to the lower cost.

According to the Cremation Association of North America, almost three quarters of those who died in Canada in 2021 were cremated. That rate has steadily crept up for years, from 48 per cent in 2000.

Burials cost more than cremations, often by thousands of dollars, so it’s no surprise that cremations get more popular every year, said Mallory Greene, CEO of the online cremation arrangement service Eirene.

The difference is partially because of all the trappings that come with burial, from a casket to the embalming of the body. Many people don’t realize just how many extra costs there are, and Greene said if you ask for a price breakdown you may be able to leave some of those costs behind unless they’re not legally required. For example, if you’re not holding a viewing of the body, you might be able to opt out of embalming.

But the actual funeral can also send costs soaring, said Greene. Some people are moving away from traditional funeral services in part for that reason, she said, as well as to have more unique, personal celebrations of life.

“I think the biggest key here is to determine what your budget is, and then kind of work from there,“ she said. ”You can still have a really beautiful memorial, and it doesn’t have to cost a lot of money.“

Greene added that there’s not a lot of information out there about the true costs of a funeral, or of burial or cremation.

People may also find it difficult to ask questions or make financial decisions when they’re dealing with grief, she said, and end up paying more than they need to as a result.

“It makes sense why people spend so much because … there is very little information available.”

There are also many options to help pay part or all of the funeral costs, depending on the situation.

If the person who died was on social assistance, the costs may be covered by the province, said Greene. There’s also government support available for Indigenous people, veterans and other groups.

While the funeral and burial or cremation are the most obvious costs of a death, Gray said you should expect up to around $10,000 in other short-term expenses, from time off to child care to flights and hotels.

If there’s no will, you may have to hire a lawyer and/or an accountant, said Gray.

Often the estate may be able to cover the funeral costs, whether there’s a will or not, said Gray, though the funds won’t necessarily be released immediately.

Sometimes the estate can release funds to help with funeral costs in as little as two weeks, said Maria Tanel, an estate professional with Objective Financial Partners.

If the deceased had life insurance, the payout takes time, said Gray, so you can’t rely on that to cover any up-front costs.

There is also a death benefit offered through the Canada Pension Plan, which allows the will executor, spouse or family to apply for $2,500 if the deceased had made CPP contributions for a certain period of time.

If you opt to pre-pay for a funeral, the money is held in a trust to ensure that even if the funeral home goes under or you move to another location, your payment will be safe and will go directly to the funeral home when the time comes, explained Greene.

“It does remove a lot of both emotional and financial burden,” she said.

You can also sign up for funeral insurance, which will pay the funeral home directly upon your death, said Greene.

Erin Bury, co-founder and CEO of online estate planning platform Willful, recommends including funeral wishes in your will and putting it in writing if you’ve prepaid for the service, burial or cremation.

While it can be difficult to talk to your loved ones about these topics, it usually makes things easier in the long run, said Bury.

“I am that person who at Christmas will bring up, ‘Hey, mom, dad, what do you want your legacy to be?’” she said.

“I feel like when I broached the subject with my parents, it didn’t become this depressing conversation.”