Friday, May 31, 2013

Nothing in life is certain but death and taxes ~ Benjamin Franklin

‘Nothing in life is certain but death and taxes’

So goes the quote made famous by American writer and politician Benjamin Franklin. Both are equally
unpleasant subjects that people tend to avoid. It’s not the kind of thing you want to discuss but the
unfortunate reality is that funeral costs are skyrocketing and you may want to consider what this means
for your loved ones.

How much does it really cost?
Depending on your religious beliefs, a typical funeral could cost anywhere between RM2000 to
RM25,000. This is inclusive of prayer services, preparation of the deceased’s remains, cemetery plot,
venue and hearse. A moderate space on a newspaper’s obituary will also set you back an additional
RM300-600 for a modest sized obituary.

There are some funeral homes which offer pre-planned funeral packages so you can roughly gauge the
costs. One of the benefits of getting a pre-planned package is you’ll save a lot of money on inflation as
things will definitely cost more in 30-40 years. You also have the option of paying on instalment.
Taking care of your assets

It’s equally important to make arrangements for your remaining assets. Drawing up a will should be
done every time your material position changes to ensure your property goes to the intended recipients
and not back to the state or bank. Will writing services vary depending on how vast your assets. A simple
will can be drawn up for as little as RM380 but when it involves various estates you’ll need to appoint
legal trustees to manage the execution of your will. The standard rate for an appointed trustee is usually
1% to 2% of the estate value. If a person owns estates that are worth RM1 million, the administration
process could tally up to RM12,000, which includes a token nominal fee.

It is also possible to write your own will. However, it would be advisable to run it by a lawyer to ensure it
fulfils the requirements of the Wills Act 1959.

Taking care of your digital information
Although still unheard of in Malaysia other countries are starting to offer services that take care of all
your social media accounts and private digital information after your death. Most of these digital will
services such as Entrustet are free but do not apply in our country just yet. Until it is, you can indicate a
trustee to handle these through your will.

Devising a plan
An average funeral will cost approximately RM8,000. Considering inflation rates, this number could
increase significantly in the coming years. Here’s a short checklist on steps you can take to plan ahead:

  • Ensure you have a good life insurance policy which can provide for funeral expenses.
  • Start a small savings account for this purpose.
  • Write a will as soon as you can and keep it updated.
  • Pre-plan costs and other details with loved ones. It’s not the nicest subject but you will be glad you undertook to speak about it. You can even buy ‘pre-plan’ funeral packages from select funeral homes on instalment.