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My mom passed away recently, and we’re planning a memorial service in her home city, where none of us three offspring lives. There are lots of expenses: the service; food afterwards; planes and hotels for all of the children, grandchildren and any great-grandchildren who can come.
Financing this event illustrates general issues in the division between the public and private sectors. I view Mom’s estate as the equivalent of the public sector (since all offspring share equally). So my idea is to have the estate pay for the public good — the service — and also the food, etc. at the service. Each participant is responsible for his/her own travel, hotel, etc. — private financing My wife pointed out that some of the siblings can’t afford the travel/hotel as well as others can, and could be subsidized by the “public sector.” I responded that we shouldn’t create incentives to travel or stay lavishly, nor to have huge numbers of relatives paid to attend. A classic public-private, equity-efficiency clash.
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Perhaps offer to everyone that the estate will cover basic hotel (Best Western or the like) and provide a reasonable per diem for food outside of the event. If anyone wants more or better services, that’s where the private funding comes into play.
Getting to the town is more challenging, because of the variety of starting locations and associated travel costs.
This strikes me as a stretch. My grandfather passed away the other week and the estate picked up the cost of my expenses to travel to TX, but that didn’t mean I spent lavishly. I checked around for the cheapest hotel I could find — actually canceling one reservation after I found a cheaper one — and also rearranged my schedule from a Friday-Sunday visit to Friday-Monday so I could save several hundred dollars on the airfare. As long as your relatives aren’t jerks they should do the same regardless of whether they are paying. It’s simple respect.
Too bad she didn’t have a life insurance policy to cover all of the final expenses that would include a funeral, burial, airfare and a hotel for the family. That would would make these conversations obsolete.
How about you pay a ‘tax’ and subsidize the cost of the travel so your family can grieve the loss?
The estate should pay for everything because otherwise it would just get eaten up by estate taxes. Shifting the funeral expenses onto the estate is a good way to get more wealth to the heirs.
First, I’m also sorry for the loss.
Second, the estate tax is only on estates larger than 5 million dollars. Do you really believe that people who are about to inherit millions are worried about $500 or less in hotel costs? There are typically only 15,000 or so families who pay estate tax each year.
I hope that Daniel is one of them and his mother enjoyed comfort and luxury during her life.
The estate could pay for each sibling’s travel and lodging—if a sibble wants spouses or children to attend, that is his/her responsibility (as are all meals).
I think it depends on whether any of the relatives really can’t afford to travel to the service. If there are any who truly can’t afford the airfare and a basic hotel room for a couple of days, then I think it makes sense for the estate to pay some of those expenses (but as others have said, dictate the hotel choice, or offer a choice of two reasonably priced options). But if everyone has enough discretionary income to afford the trip and it’s just that some have more extra than others, then let everyone pay for themselves. It would be a shame for some not to be able to be there due solely to financial concerns when there are others who could afford to help out their relatives.
I’m sorry for the loss of your mother.
WILLIAM–The policy would not pay this quickly.
MIKE B.–The first $3.5 is free of estate taxes and if her estate exceeds that amount then these costs are peanuts.