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What to Do When There's No Money for a Funeral

Geoff Williams

If you've been struggling with money your entire life, and you're advanced in years or gravely ill, death must seem like a cosmic prank. Who wants to consider that after a lifetime of scrounging, you (or your loved ones) can't afford to pay your final bill?

It's a serious problem that seems to have grown worse over the years and one that spiked during the recession. There is no organization that tracks unclaimed bodies, but coroners throughout the country, in local news stories, have reported that the numbers are climbing. In 2011, Oregon cremated 30 percent more unclaimed corpses than the year before. In 2012, in Myrtle Beach, S.C., the coroner asked the county to create a special cemetery for unclaimed bodies due to a lack of dignified space to put the remains.

So what does one do if there is no money for a funeral? After all, death, like taxes, is a sure thing, and if you have a great aunt drawing her last breath, you can't very well ask her to hang around for a few months while you raise funds for a proper send-off. According to the National Funeral Directors Association, in 2012, the average cost for an adult funeral was $7,775, which doesn't include cemetery costs.

If you lack the funding for a funeral, here's what some experts say your options are.

If there's time, prepay the funeral expenses. This isn't an option if death occurs unexpectedly, but if you know the inevitable is coming, prepaying can help you find more time to gather the money, and get the financial stress out of the way now.

After all, "planning a funeral is not something you want to do at the spur of the moment, in your height of grief," says Lacy Robinson, senior professional development trainer at Aurora Casket Company, based out of Aurora, Ind., and one of the nation's largest casket manufacturers.

[Read: Should You Prepay Your Own Funeral Expenses?]

Consumers can usually pay in installments or all at once, but they ideally want to time it a year or two before a death rather than, say, 10 years. Despite the many honest and ethical funeral homes, there are cases where people have been billed for expenses after the funeral. Costs also rise, and not all prepayment plans keep prices locked in. Funeral homes can be bought by a company that won't honor prepaid commitments.

Also, prepaying can be advantageous for low-income individuals facing late-life health issues by reducing their assets and allowing them to become eligible for Medicaid.

When her mother's health problems landed her in a nursing home last summer, Sandra Beckwith, 58, a freelance writer and author in Fairport, N.Y., prepaid the funeral with her mother's income. "If I hadn't done that, I would have had to pass the hat among siblings when the time came to pay," Beckwith says, "and we didn't want to do that if we didn't have to."

Beckwith, whose 84-year-old mother is still fortunately among the living, prepaid $8,000 to the funeral home, most of which came from her mother's meager assets, as well as $1,500 that Medicaid kicked in. Medicaid will allow as much as $1,500 (approximately; amount varies state to state) to be counted toward a funeral instead of as assets.

For a funeral, $1,500 "is not nearly enough," says Beckwith. But it's better than what Social Security offers. A surviving spouse or child who is eligible for benefits receives $255 to go toward burial costs.

Have a budget, no-frills funeral. Many of your costs can drop with a little forethought. That can be hard if you're in the throes of grief, but you should try to remember:

Cremation is considerably cheaper than an open funeral. The average cost, according to the Cremation Association of North America, is $1,650, which includes a memorial service. Without the memorial service, an average cremation is $725.

If you're cremating, the service could be held in a place other than a funeral home to bring costs down, says Barbara Newman Mannix, president of A Dignified Life, which specializes in planning end-of-the-life issues, like estate planning and enrolling in a nursing home, for people in New York City and surrounding areas. "You could have the service at a park, a church, or another no- or low-cost venue, so you don't have to pay for a service or funeral venue," says Mannix.

It's also a good idea to be upfront with the funeral director about your finances. "Every funeral home sees a variety of families, some who have just a little bit of money or virtually nothing," Robinson says.

[Read: 5 Things to Remember When Your Finances Are Falling Apart.]

In other words, if you're low on funds, funeral directors get it, and the best of them will steer you to inexpensive alternatives. Marty Strohofer, vice president of marketing at Aurora Casket Company, says there are cheaper caskets than the many that go for $2,000 or $3,000 and higher. He says you can opt for a 20-gauge steel casket, which is priced closer to $1,000, or a cloth-covered casket, which can be found in the $500 range.

The elements of a funeral service don't have to be expensive, Robinson says. You could bring in your own flowers rather than buying them through the funeral home, for example.

Donate the body to science. Like pre-planning a funeral, this is a decision best made before death. It may sound creepy to some, but there's no question that people who leave their body to medical science are doing a service, and most medical research facilities that accept bodies handle all of the transportation and burial costs. In fact, many research facilities offer an annual memorial service for those who have donated their body to medical science, and if you prefer not to receive an urn of ashes, many will put the body in a repository for bones or bodies of the dead.

But do your research first. For starters, donating your body to science is different than donating organs (since the organs are taken but the body sticks around for the funeral), and if you donate your body, you can't also be an organ donor (researchers don't want your body without the organs).

Family members may get your remains fairly quickly. MedCure, based in Portland, Ore., will send the cremated ashes to family members four to six weeks after death. Science Care, based in Phoenix, returns them three to five weeks later. But many facilities won't return the remains for two or three years, which may bother some family members who are looking for the closure of scattering ashes.

You could not claim the body. Nobody is suggesting you don't claim a loved one. But if you're low on funds and you can't see any other option for a distant relative or acquaintance, unclaimed bodies are taken care of by the local or state government.

[See Get-Out-of-Debt Resolutions for 2013]

If you go that route, "you'll never know what happened to them," says a pained-sounding Mannix.

Often, unclaimed bodies are cremated by the local government and the remains are held until something can be done with them. Every year, Los Angeles holds a mass funeral for unclaimed bodies; last December, mourners, chaplains, and county officials said goodbye to 1,656 people, most of whom died in 2009. It's also common for an unclaimed body to be offered to a medical school for research or perhaps sent to a body farm, where human decomposition is studied.

In which case, you may be better off not knowing what happened.

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