Protecting Loved Ones From Funeral Debt

Takeaways

• The median cost of a funeral (viewing and burial) is over $8,000 in the United States and over $6,000 for cremation, according to 2023 data.
• A recent survey revealed a sharp increase in funeral-related debt, with 37 percent of Americans taking on debt to cover a loved one’s funeral expenses.
• Most Americans surveyed (57 percent) said they cannot cover a funeral without incurring debt.
• Proactive measures – including long-term planning, estate planning (such as wills or trusts), and clear communication of final wishes – are essential to protect loved ones from incurring financial debt and undue stress.

Many people delay having important conversations with their loved ones about what will happen when they pass away, including their plans and wishes for funeral arrangements. Yet having these conversations with loved ones is an essential part of planning.

Debt.com’s annual October survey shed light on how funeral debt can negatively impact surviving loved ones. According to the survey, one in three Americans took on debt to cover a loved one’s funeral expenses. Half have never discussed their funeral plans with their loved ones.

The survey’s findings underscore the importance of long-term planning and communication. Making a plan for what will happen to your remains when you die and discussing your wishes with those closest to you can seem daunting at first but could help your loved ones avoid financial hardship, stress, and uncertainty. As inflation and rising living costs put strains on family finances, this planning may be even more essential today.

How Much Do Funerals Cost?

According to the National Funeral Directors Association, the national median cost of a funeral, including viewing and burial, was more than $8,000 as of 2023; for cremation, the median cost was more than $6,000. Costs can vary widely depending on where you live and what services you choose.

Grief’s Financial Toll

Debt.com’s survey of 1,000 Americans points to an increase in financial hardships associated with having a loved one pass away.

The percent of people taking on debt after a loved one’s death rose sharply from 14 percent in 2024 to 37 percent this year. Fifty-nine percent of borrowers put this debt on credit cards, while 38 percent obtained personal loans and 22 percent relied on funeral-specific financing.

For some, the debt created additional stress. One in four reported that the funeral-related debt caused anxiety. Meanwhile, 19 percent struggled to make payments and 17 percent delayed paying other bills to satisfy the funeral debt.

The survey further showed that many people feel unprepared to handle funeral expenses for a loved one, should the need arise. Fifty-seven percent said they could not cover a funeral without taking on debt, and 36 percent said they would have to delay paying other bills to manage the expense. According to Debt.com, these findings suggest that grief could become an “unexpected financial crisis” for many families.

Preventing Funeral Debt and Stress

By planning ahead, you can help protect your loved ones from taking on funeral debt and reduce the stress they may face during an already emotional time. Having clear plans in place can make grieving easier for the people who care about you most.

Take time to reflect on what you would like to happen when you pass away:

• Do you prefer burial or cremation?
• What are your wishes regarding organ donation or donating your body to science?
• Would you like your loved ones to celebrate you with a funeral, memorial service, celebration of life, or something else?
• Are there any religious rites, cultural traditions, or personal preferences you want honored?
• What might these choices cost, and how would you like them to be paid?

You may also want to complete a health care power of attorney or advance directive, depending on your state. These legal documents allow you to choose someone you trust to make medical decisions for you if you become incapacitated (unable to manage your affairs). Some states allow you to record your funeral, burial, or cremation wishes in these documents.

A last will and testament can also include instructions about funeral wishes. However, because wills are often reviewed after funeral arrangements are made, it can be helpful to communicate these instructions directly to your loved ones as well.

While you can plan your funeral in advance, the Funeral Consumers Alliance generally advises against prepaying unless you need to spend down your assets to qualify for Medicaid. Prepaid contracts may include unexpected fees and often offer less flexibility if your plans change. Instead, you can use a will, trust, or other estate planning tools to leave funds for your funeral without locking yourself into a specific contract.