Despite the fact that it happens to every single one of us and is as every bit as natural as birth, very few among us are properly prepared for death—whether our own death or the death of a loved one.
Yet the pandemic might be changing this.
According to Census figures, the pandemic caused the U.S. death rate to spike by nearly 20% between 2019 and 2020, the largest increase in American mortality in 100 years. More than two years and 1 million deaths later, it's more clear than ever that death is not only ever-present, but a central and inevitable part of all our lives.
Yet, in what may be one of its few positive outcomes, some in the end-of-life industry believe that the pandemic’s massive loss of life has created an opportunity to transform the way we face death, grief, and all of the other issues that arise when we lose someone we love dearly. In fact, this sentiment is the mission of the new startup Empathy, an AI-based platform designed to help families navigate the logistical and emotional challenges following the death of a loved one.
“For far too many, COVID-19 has been a terrible reminder that death and loss are all around us,” notes Empathy CEO and co-founder Ron Gura in a recent company report. “But it also represents an opportunity to shift public perception, to bring a topic that has been for far too long shrouded in darkness into the light of day, where we can fully examine it and figure out how best to help those who have to shoulder its burdens.”
As anyone who has personally dealt with loss knows, when a loved one dies, those left behind face major challenges, not only emotional and logistical, but financial as well.
Determining Dying’s True Cost
To further shed light on just how vastly unprepared most of us are when dealing with death, in March 2022 Empathy released its first-ever Cost of Dying Report. In partnership with Goldman Sachs, Empathy’s report surveyed more than 2,000 Americans—each of whom had lost a loved one in the last five years—to get a clearer picture of dying’s true cost to families—and as Gura says, “bust open the taboo that has for too long kept it out of the public consciousness.”
The report looked not only at the financial burden dying brings, but it also examined the cost “in time, in stress, in harmed productivity, and in strained interpersonal bonds.” Paired with the results of the research, the Cost of Dying includes a collection of insights from the study’s advisors, partners, and experts in the bereavement field.
These contributors seek to clarify what we can learn from the study’s numbers and explain how we can use the figures to rethink how to best serve the bereaved, “as individuals, as organizations, and as a society.” While you can read the full report, which can be accessed for free on Empathy’s website, the following are some of the study’s most notable findings, along with corresponding insights from some of the report’s contributors.
THE FINANCIAL COST Following a loved one’s death, the total bill—including the funeral and hiring all of the other professional support—cost families an average of $12,702. The average cost of a funeral was $7,267, and according to the National Funeral Directors Association, that cost has risen 7.6% in the last 5 years.
On top of the funeral, families paid an average of $5,846 to hire additional professionals, such as lawyers, financial advisors, and realtors. The bill charged for these services include the following individual costs:
$3,910 lawyer fees
$4,461 real estate professionals
$1,637 therapists or social workers
Notably, the $3,910 in lawyer’s fees was nearly double for estates that required the court process of probate, which was the case for one-third of families surveyed. When you include lawyers, court costs, and all of the other related fees, the total cost to complete probate for families averaged $16,800.
Fortunately, by working with us, your local Personal Family Lawyer®, your family can avoid the time, expense, and emotional burden associated with probate. For example, by placing assets in a properly created and maintained revocable living trust, assets held by the trust will pass to your loved ones without the need for probate or any court intervention following your death or incapacity.
But that’s not the only way proactive planning can help your loved ones following your death. Using our Life & Legacy Planning Process, you can achieve a variety of other goals, including asset protection, avoiding family conflict, funding long-term care, estate tax mitigation, as well as family legacy creation and preservation, to name just a few. Sit down with us for a Life & Legacy Planning Session to find the most effective and affordable planning solutions for you and your family based on your family dynamics, assets, as well as your overall goals and desires.
Paying The Final Bill So how did families pay for all of these expenses? Only 1 in 7 families had any of the costs associated with their loved ones’ death paid in advance or were able to use payable-on-death funds. Additionally, more than 50% of families had to deal with estates that included debt. To foot the bill for these expenses, 36.1% of respondents used their own savings or investments, while 42.4% used their checking accounts or credit cards.
For most families, the financial costs associated with loss were exacerbated by a lack of information about exactly how much money they should expect to spend, notes internal medicine physician Shoshana Ungerleider, MD, in the report’s section on death’s financial cost. Compounding that stress, Ungerleider says, was the families’ fear of making a mistake that will make their financial burden even worse.
“A majority of families find themselves unprepared for and under-informed about the real financial costs of death, with few available resources for finding out,” writes Ungerleider. “They can spend months or years terrified that a wrong move will wipe out their inheritance or even their own savings.”
As an example of what such a mistake might look like, Ungerleider notes that a lack of proper estate planning can lead to the deceased’s home being seized after death “to pay off expenses incurred through Medicaid, even if the family member who was their primary caregiver is still living in the home.”
This is another area where thoughtful estate planning can be invaluable. We offer planning strategies as well as we will serve as both you and your family’s trusted advisor so you never have to worry about anyone impacted by your plan being under-informed about death’s many responsibilities.
Next week, in part two of this series, we will discuss more of the Cost Of Dying’s most notable findings and detail other ways you can dramatically reduce the financial, logistical, and emotional burden for your loved one’s upon your death using our Life & Legacy Planning Process. Until then, if you are ready to create or update your estate plan, contact us today.
This article is a service of Meredith Weil, Esq., Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™ (aka Life & Legacy Planning Session), during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.