Can Funeral Costs Be Deducted from the Estate in Australia? What You Need to Know

A common question Tomorrow Funerals often encounter is whether funeral expenses can be deducted from the deceased's estate. In Australia, the answer is generally yes, but it involves navigating specific legal and financial considerations. Understanding these details, such as the prioritisation of payments, necessary documentation, and potential jurisdictional differences, can help ensure that the costs are appropriately managed and deducted from the estate, alleviating some of the burden during a difficult time.

Navigating Funeral Planning and Expenses

Planning a funeral, with its myriad decisions and emotional toll, can be daunting. Choices about the type of service, selecting a funeral package, and financing the event are critical aspects to consider. At Tomorrow, we strive to simplify this process with our modern and transparent memorial package.

Using the Deceased’s Assets for Funeral Costs

Many people wonder if they can use the deceased's bank account to cover funeral expenses. The answer is YES; you can use the funds from the deceased’s estate to pay for the funeral. However, there are important details to keep in mind.

The ability to deduct funeral expenses from the estate depends on factors like the estate's size, applicable Australian laws, and the specific assets within the estate.

Timing and the Official Death Certificate

A crucial document in managing an estate is the official death certificate, which your funeral director will arrange post-cremation or burial. However, it is possible to arrange payment for the funeral before receiving the death certificate.

Legitimate Funeral Expenses

Funeral expenses in Australia vary based on the service type, location, and individual preferences. At Tomorrow, our complete funeral package costs $6,800, covering everything needed for a personalised, modern memorial ceremony. Our events are held in unique venues like restaurants, pubs, sporting clubs, galleries, or even natural settings, rather than traditional funeral parlours.

Additional costs for food, drink, and venue hire are also considered part of the funeral and can be paid for by the deceased’s estate. We can assist in arranging these details—contact us for more information.

Key Points About Using Estate Funds for Funerals in Australia

Estate Size: Funeral expenses are typically considered legitimate estate expenses in Australia. If the estate lacks sufficient assets to cover the funeral, a family member or executor will need to cover the remaining costs.
Prioritised Payments: Funeral expenses are generally classified as priority claims, paid before other debts or distributions to beneficiaries.
Documentation and Invoices: Keep thorough records of all funeral-related expenses. Your funeral home should provide an invoice made out to “The Estate of [the deceased person’s name].” This invoice should be forwarded to the lawyer handling the estate or the deceased’s bank. Proper documentation ensures that the expenses are recognized as necessary.
Family Agreements: Sometimes, family members agree to share funeral costs upfront, with reimbursement from the estate later. Such agreements should be documented to show the executor that the expenses were reasonable.
Jurisdictional Differences: Laws regarding estate administration and funeral expenses vary across Australian states and territories. Consult a solicitor or legal expert familiar with local laws to ensure compliance.

Final Steps

We recommend first contacting the deceased person’s lawyer or the bank where their assets are held. Managing funeral expenses while grieving can be challenging. Open communication with your funeral director can provide necessary guidance and documentation. Additionally, seek advice from a legal professional to ensure you follow all relevant laws and regulations in your jurisdiction.

By staying informed and organised, you can navigate the complexities of funeral expenses with greater ease.