The loss of a partner or family member, whether expected or a sudden, can be one of life’s most challenging experiences. Alongside grief and other difficult emotions there are many financial decisions to be made which can feel overwhelming, at an already difficult time.
When someone dies, family members often need to manage funeral costs, bank accounts, superannuation, insurance policies, government notifications and estate administration. This guide explains the key financial steps to take after the death of a loved one in Australia, including how to notify organisations, access benefits and seek financial advice.
How much does a funeral cost in Australia?
The cost of a funeral can vary widely depending on the type of funeral and in which state it is held. Moneysmart estimates funeral costs can range from $8,000 to $20,000, with cremation generally at the lower end of the scale.
Check to see if your loved one holds a life insurance policy that pays an advance payment upon death as this may cover funeral expenses. If you need to wait until your loved one’s Will is settled to receive funds, you can also ask the funeral home if you can be put on a payment plan.
Understand impacts to your financial position
Firstly, review your household budget to see how your cash flow may need to be adjusted to accommodate these changes. Keep track of all the incomings and outgoings you incur.
Next confirm what assets your loved one owned, such as their house, investment properties, life insurance, superannuation, savings accounts, term deposits, shares, managed funds, cryptocurrency, artwork, jewellery, vehicles. These items may be itemised in their Will, but assessing their value will probably require some effort on your part or the executor’s part.
What happens to superannuation after someone dies?
Superannuation does not automatically form part of a person's estate, so it’s important to check whether your loved one had a valid death benefit nomination in place. This nomination helps guide the super fund on who should receive the benefit, which may include a spouse or de facto partner, children, financial dependants, or the deceased’s legal personal representative (estate executor).
The way death benefits are paid can also have tax implications, particularly for adult children and non-dependants, so it may be worth seeking professional advice before making decisions. As soon as possible, contact your loved one’s super fund to notify them of the death, understand the claims process, and find out what documentation is required to access any benefits.
What services need to be notified when someone dies?
Once you have a death certificate, notify, cancel or transfer accounts in your loved one’s name so you aren’t paying unnecessary fees. The Australian Death Notification Service lets you notify multiple organisations, including:
- Banks: e.g., own home mortgage, investment property mortgage, credit cards, term deposits and transaction accounts.
- Insurance companies: e.g., car, health, life, home and contents
- Utilities: e.g., gas, electricity, water, phone
- Local council for rates
- Other services: e.g., gym membership
Look for unclaimed money
In case there are bank accounts, super funds, insurance policies, shares or investments that you’re unaware of, you can use the Government’s unclaimed money search tool to see if there are any of these assets in your loved one’s name.
What happens to debts after death?
When someone dies, their debts do not usually disappear, but they are generally paid from the assets of their estate before any inheritance is distributed to beneficiaries. This can include outstanding mortgages, personal loans and credit card balances. If a mortgage is held jointly, the surviving borrower may become responsible for ongoing repayments, while individual debts are typically settled using estate funds. In some cases, life insurance proceeds or other assets may help cover these liabilities.
The executor of the estate is responsible for identifying debts, notifying creditors and ensuring any outstanding financial obligations are addressed before the estate is finalised. It’s important not to assume personal responsibility for a loved one’s debts without first seeking professional advice on your specific circumstances.
What government benefits are available after a death?
Depending on your circumstances and relationship to the person who died, you may be eligible for a lump sum or a short-term bereavement payment. Services Australia details available payments and eligibility requirements.
