As explored in a previous article, legacy planning is multifaceted, from managing investments, to creating a will, making CPF nominations, LPAs and much more.
However, one critical element often overlooked is funeral costs.
Incorporating funeral expenses into legacy planning ensures that your final wishes are respected, easing both the financial burden from your loved ones, and the need to second-guess your preferred funeral arrangements.
This article will delve into why funeral costs are a vital component of legacy planning and highlight the various factors to consider.
Why You Need to Include Funeral Costs in Legacy Planning
Legacy planning is as much about managing assets as it is ensuring that your end-of-life arrangements are handled according to your wishes. Including funeral costs in your legacy plan thus provides several benefits:
Easing the Financial Burden on Loved Ones
Funerals can be expensive, and the costs can vary widely depending on preferences and religious practices.
In Singapore, the average cost of a 3-day funeral is $8,232, with prices ranging from $3,000 to $25,000.
By planning and allocating funds for your funeral, you alleviate the financial pressure on your family during an already difficult time.
Preventing Unfair Pricing Practices
A report by the Competition and Consumer Commission of Singapore (CCCS) in November 2023 highlighted a lack of transparency in funeral pricing.
Consumers reported that final costs were often higher than initially quoted due to undisclosed charges.
Having a clear understanding of funeral costs and planning ahead can help you avoid such practices and ensure you receive fair pricing.
Ensuring Your Wishes Are Respected
Legacy planning is about ensuring that your wishes are honoured.
By specifying your preferences for funeral arrangements, you can ensure that your final farewell aligns with your values and beliefs, providing peace of mind for both you and your loved ones.
How Are Funeral Costs Determined?
Understanding the factors that influence funeral costs is crucial for effective legacy planning.
Here are the key aspects to consider:
Religious and Cultural Practices
Funeral practices are deeply influenced by religious and cultural traditions, which significantly impact costs.
Costs vary significantly across religions, due to the different rituals and practices required.
For example, Taoist funerals, which involve elaborate rituals and numerous paper offerings, are among the most expensive, averaging $11,191 for a 3-day ceremony.
In contrast, Muslim funerals are typically simpler, averaging $1,431, due to the requirement for a swift burial.
This is not a cost that can be controlled, given it is connected to one’s faith.
However, other elements that affect cost can be altered to make them more affordable.
Duration of the Funeral
The length of the funeral also affects costs.
Direct funerals, which are held on the same day as the deceased’s passing, are more affordable, often costing below $2,000.
The deceased’s body is typically transported to the crematorium or burial site, where a short ceremony can take place.
Typically, only close friends and family are present, due to the short notice.
Traditional funerals, lasting 3 to 5 days, are more expensive due to the extended period of ceremonies and gatherings, and can cost anywhere between $3,000 to $25,000.
More friends and family typically attend due to the lengthened period.
Religious rites and rituals can also be observed across days.
Location of the Funeral
Funerals can be held at various locations, namely HDB void decks, private residences, or funeral parlours.
Renting a funeral parlour, such as those provided by Singapore Casket, can cost between $650 and $1,800 per day, adding to the overall expense, and is typically more expensive than void decks.
However, there is no need to keep watch of the casket at night, given that it is safety in the parlour’s premises.
Additional Services
Additional services such as catering, caskets, and transportation also contribute to funeral costs.
Catering can vary in price based on the quality and quantity of food, while casket costs depend on design, material, and detail.
The type of hearse used for transportation can also affect the final price.
Cremation or Burial Costs
Cremation and burial fees are another significant factor.
In Singapore, cremation at Mandai Crematorium typically costs around $100, while burial fees at Chua Chu Kang Cemetery range from $315 to $940, depending on the religious plot selected.
Steps to Incorporate Funeral Costs into Legacy Planning
To effectively incorporate funeral costs into your legacy plan, consider the following steps:
Research and Understand Costs
Familiarise yourself with the various factors influencing funeral costs and obtain quotes from different funeral service providers.
This will give you a clearer idea of the potential expenses involved.
Specify Your Preferences
Document your preferences for funeral arrangements, including religious or cultural practices, the desired location, and any specific services you want.
This ensures your wishes are respected and helps your family make informed decisions.
Allocate Funds
Set aside funds specifically for funeral expenses. This can be done through savings, insurance policies, or pre-paid funeral plans. Ensure these funds are easily accessible to your family when needed.
Use Resources Like Parting Goodbyes
Parting Goodbyes, a funeral directory, is a useful resource which allows for easy identification of funeral packages based on your needs.
The aforementioned factors can be filtered and sorted, thereby allowing one to easily compare funeral directors that provide similar services.
Hidden costs, which funeral directors might use to artificially depress costs, are also highlighted in the directory, making known what to clarify with funeral directors, and what the true final cost would be.
Conclusion
Incorporating funeral costs into your legacy planning is a crucial step in ensuring your final wishes are honoured and your loved ones are not burdened with unexpected expenses.
By understanding the factors influencing funeral costs, using the right resources to identify them, and taking proactive steps to plan ahead, you can provide peace of mind for yourself and your family, ensuring a dignified and respectful farewell.
If you’re interested in knowing more on how you can financially prepare yourself and your family when you pass, speak to one of our financial advisors.
