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Dealing with loss or illness in the family

Be financially prepared

Getting things sorted

When someone in your family becomes very ill or passes away it is can be an extremely stressful and difficult time.

Unfortunately, during this highly emotional period, you’re going to need to make a number of necessary arrangements, some which will be time critical.

Dealing with a serious illness in the family

If someone in your family develops a serious illness they may be unable to work, and money issues can arise. This type of event can be extremely stressful as medical expenses and regular household bills will need to be paid, and it’s often hard to determine how long it could be until they’re well enough to work again.
To support your loved one through this difficult time it’s a good idea to help them to put in place a plan to manage their finances.
If money is needed to assist the person through this crisis, there are a few different options that can be considered:

  • Review the insurances they hold – if they have trauma cover or health insurance they may be able to claim back a number of expenses.
  • Check if they have KiwiSaver – they may be eligible for an early withdrawal from their savings due to their ill health and financial circumstances.
  • Ask them if they have any savings that could be used to help cover costs.
  • If your loved one doesn’t have any other means of income, and is too sick to work, they could look at applying for government assistance, see the Work and Income website for more information

If someone you love becomes terminally ill, it’s important that they’re given the opportunity to make arrangements for their estate while they’re still able. This may include reviewing their:

  • life insurance policy - to ensure that loved ones are taken care of if something should happen
  • will - to ensure they’re comfortable with how their assets and savings will be divided up among their nominated beneficiaries. 
  • funeral arrangements - if they choose they can make requests for how the funeral and burial should be carried out.

When a loved one passes away there are a number of arrangements you’ll need to make. Below are a list of steps you can follow to ensure you’re prepared:

  1.  Look for any instructions that your loved one may have left (including a funeral policy).
  2. Arrange for a death certificate to be issued by a doctor, you’ll need this later on
  3.  Start making funeral plans; remember to consider guests that may have to travel a long way to attend. 
  4. Tell your friends, relatives and colleagues.

The funeral director may be able to help with the death certificate, notifications, and give advice to help you deal with other details. If all this feels overwhelming, it’s a good idea to get help from a friend or family member so you can share the load.

Funeral costs vary depending on the kind of service and funeral company you use. It’s a good idea to check for funeral preferences in the deceased’s will. Also, ask your funeral director for a detailed quote to understand costs up front.

Here are some of the costs you need to consider when planning a funeral:

  • death certificate
  • permits
  • burial/cremation
  • funeral director fees
  • coffin
  • transport
  • cemetery plot
  • other expenses, eg. celebrant, clergy, flowers, press notices, the wake.

Private health, sickness, accident or life insurance policies may help to pay for funeral and other expenses. If the person who has died had personal insurance, call their insurance company to check what they are covered for in their policy.

You may find that the person who has passed away has paid for their funeral in advance. If you think that the deceased may have prepaid their funeral expenses, but cannot find the paper work, talk to their solicitor, or the executor of their will.

Most people have a will drawn up to inform their loved ones how to divide up their money and possessions after their death. The executor of the will is responsible for distributing the person’s money and assets to those named in the will.
People who are names in the will are known as 'beneficiaries'. Generally assets can only be distributed after debts are paid, and once the courts have granted 'probate' or validated the will.
The executor will need a number of documents to enable them to administer the will. Try to gather these documents together as soon as possible:

  • banking records
  • credit, charge and store cards
  • taxation records
  • superannuation records
  • records of investments.

If there is no will the estate is shared under a formula set by law.

It’s never easy when a partner passes away, especially if they’ve been the one looking after your finances. Although it’s tempting to ignore financial aspects while dealing with your emotions, the sooner you sort out your options, the clearer your decision making will be.
It’s important to revaluate your financial position following the death of a partner. You may have inherited savings and assets previously held in joint names, and could be entitled to a payment from their retirement savings or insurance. Contact their insurance and retirement savings scheme providers to find out if you’re eligible for any payments.
To understand your position more clearly, organise your finances by:

  • listing your assets (eg. house, car or boat
  • listing your liabilities (eg. home loan, credit cards or personal loans)
  •  looking at how much you earn (on payslips or tax returns)
  • listing out any investments and savings (eg. look at bank or superannuation statements).

It’s a good idea to seek advice from a financial Adviser once you’ve done an initial assessment of your situation. A financial Adviser can help you make effective decisions around how to use or invest your money so it works to your advantage. AMP has a large network of financial Advisers and they can help you

To learn more about budgeting to manage your finances more effectively in the future go to the Ministry of Social Development website

All people grieve differently, and there’s no right or wrong ways to deal with grief. However, if you find yourself becoming overwhelmed and unable to cope with the situation it’s important that you reach out for help.

There are a number of support groups and professionals available to help you through a difficult time. For more information go to the Ministry of Social Development website 

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The content on this website is for information only. The information is of a general nature and does not constitute financial advice or other professional advice. Before taking any action, you should always seek financial advice or other professional advice relevant to your personal circumstances. While care has been taken to supply information on this website that is accurate, no entity or person gives any warranty of reliability or accuracy, or accepts any responsibility arising in any way including from any error or omission.

A disclosure statement is available from your Adviser, on request and free of charge.