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.
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. Empathy was designed to help manage and streamline these responsibilities for grieving families—and in the process, “change the way the world deals with loss.”
A Digital Assistant For Grieving Families
Empathy provides users with digital tools that offer step-by-step instructions detailing all of the administrative, legal, and financial tasks you need to manage in order to finalize a loved one’s affairs and settle their estate. To help users prioritize their work and avoid burnout, the Empathy app flags the most time-sensitive tasks.
In addition to the technology, Empathy also offers human-centered support in the form of live Care Specialists, who can be contacted via the app. The Care Specialists support you by answering questions, helping you locate services and providers, and even handling certain tasks for you if needed, such as calling funeral homes, contacting life insurance companies to speed up policy payouts, and helping executors file court petitions.
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
- $2,456 accountants
- $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, 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 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.
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 a loved one’s 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.”
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 process.
This article is a service of Davidek Law Firm, PLLC. We don’t just draft documents; we ensure that families and business owners make informed and empowered decisions about life and death, for themselves and the people they love.