A clause that is often included in Wills, is one that directs the trustee “To pay out of and charge to the capital of my general estate my just debts, and funeral and testamentary expenses.” At first glance, the clause appears straightforward. In practice, however, disputes can arise over what funeral expenses an estate is actually required to pay.
Funeral arrangements are often made quickly, sometimes before an estate trustee is identified or probate is issued. Family members are typically required to make immediate decisions regarding burial, cremation, ceremonies, and related expenses without waiting to determine who is legally responsible for them. The expectation is that whoever advances those costs will later be reimbursed from the estate. However, these costs must be reasonable.
The issue becomes particularly important where the estate is modest or insolvent. In those situations, estate trustees are required to satisfy estate obligations in a specific order of priority: (1) reasonable and necessary funeral expenses; (2) testamentary expenses and costs of administration; and finally, (3) all other debts proportionately.
Unless a Will provides otherwise, funeral expenses are generally paid from the residue of the estate. Where the residue is limited, funeral expenses that appear extravagant or disproportionate may significantly reduce the amounts available to residual beneficiaries, and give rise to disputes over whether those expenses were reasonable in the circumstances.
In Chernichan v. Chernichan (Estate), 2001 ABQB 913 the court considered what funeral expenses qualify as reasonable, stating:
- The liability of the estate, the personal representative, and the surviving spouse for funeral expenses is not unlimited. Rather, that liability is limited to expenses that are reasonable having regard to the deceased’s station in life and other circumstances [1]
- Funeral rituals in our society are intricately bound up with cultural and religious beliefs and practices. As a result, the law permits estate funds to be used for a dignified funeral consistent with the deceased’s traditions and wishes, so long as extravagant and unreasonable expenses are avoided. [2]
- Thus, it follows that what is reasonable in one context may not be reasonable in another.[3]
This analysis was also applied recently in Garbera Estate, 2024 ABKB 185 (CanLII). In Garbera, the total funeral expenses were $30,338.10, about 6.4% of the total value of the estate. Two expenses were challenged: a monument, which cost $8,300 and a post-funeral banquet that cost $4,353.48. In assessing whether these were reasonable costs, the court considered funeral rituals, cultural and religious beliefs, and the financial circumstances of the estate. In this case, the estate was modest. The defendants did not provide any evidence as to what the cost of an “average” or “typical” monument would be nor was there any evidence that the post funeral banquet was tied to any traditional cultural practices. Although the court did not eliminate those expenses entirely, both amounts were reduced. Ultimately, the court lowered the total recoverable funeral expenses from $30,338.10 to $21,484.62.
Takeaway:
The law recognizes that funerals are deeply personal and culturally significant events, and estate funds may generally be used to provide a dignified funeral consistent with the deceased’s wishes, traditions, and circumstances. However, the estate’s obligation to pay funeral expenses is not unlimited. Where the amounts claimed appear extravagant, unsupported, or disproportionate to the size of the estate, those expenses may be disputed and scrutinized for reasonableness.
[1] Chernichan v. Chernichan (Estate), 2001 ABQB 913 (CanLII) at para. 22.
[2] Id. at para 23.
[3] Id. at pars 24.
