Most advice about emergency funds focuses on one situation: losing your job. When that happens, your income stops and you use your savings until you find something new. This kind of emergency happens gradually, so having three to six months of expenses saved up usually works well. You have time to react, look for work, and reduce your spending.
A death in the family is very different. The bills come quickly, often within days, but the money to pay them can take weeks, months, or even years to arrive. If your savings are set up only for job loss, there’s a gap that most people don’t expect. That gap often gets filled with credit cards when you can least afford it.
Here’s what that gap looks like and how you can close it.
The First Week Is All Outflow
Funeral homes usually expect payment before the service. You’ll need to pay for things like transporting the body, basic service fees, a casket or cremation container, and facility use, all within a few days. Certified death certificates also cost money, usually per copy, and you’ll probably need more than you expect, since every organization wants its own.
The total cost depends heavily on where the death occurred. Even a simple funeral usually costs between $7,000 and $12,000, and that’s before any medical bills. If someone dies in a hospital, the last month can cost about $32,400, mostly because of ICU care. If the person was at home with hospice, the costs are more about unpaid caregiving and renting equipment.
You have some control here, but most families don’t use it. Federal rules say funeral homes must give you an itemized price list to keep, must give prices over the phone without asking for your name, and can’t force you to buy a package just to get one item. You can choose what you want. The problem is, you have to do this comparison shopping within about 48 hours of losing someone, so most people don’t do it.
The Federal Backstop Is $255
If you think a government program will cover these costs, it won’t. The Social Security lump-sum death payment is just $255, paid once. It goes to a surviving spouse, or to a qualifying child if there’s no spouse, and you have two years from the date of death to apply. That’s all the immediate federal help you get.
Monthly survivor benefits are helpful and worth applying for, but they require a separate application and take time to process. They come as monthly payments, not as a lump sum. Neither option pays the funeral home in the first week.
Life Insurance Is Fast, Once Somebody Files
Insurance companies don’t know when someone dies unless someone tells them. A named beneficiary has to file a claim and send in a certified death certificate. The process doesn’t start until they get that paperwork. Since it can take time for the county to issue the certificates, the whole process usually takes weeks, not days.
When people buy life insurance, they usually ask how much the payout should be and how long the policy should last. These are good questions, but they don’t solve the problem of paying funeral bills before the insurance money arrives.
There are two things you should check soon. First, make sure your beneficiary designation is up to date, because an old one naming an ex-spouse will override your will. Second, check that you’ve named a person at all. If your policy names your estate as the beneficiary, the payout will go through probate, which is much slower than a direct insurance payment.
Your Cash Might Sit Where Your Spouse Can’t Reach It
This part is for people who manage their money online and spread their emergency fund across many accounts to get higher interest rates. If you’re like Kevin and his wife, who use 17 different accounts, you’ve worked hard to get the best yield. But you might have made it harder to access your money quickly without realizing it.
If an account is only in one person’s name, it doesn’t transfer automatically when they die. It becomes part of the estate and stays locked until someone has legal authority. A joint account with right of survivorship passes directly to the surviving owner. You can also add a payable-on-death or transfer-on-death designation to a solo account, so the named person can claim the money with a death certificate and ID, without needing a court order. Adding this is usually just a form in your account settings and only takes a few minutes per bank.
You should ask the same question about all your other accounts. For example, I bonds at TreasuryDirect need a co-owner or beneficiary, or else the survivor has to file paperwork with the Treasury. An HSA goes to the named beneficiary, but it keeps its tax benefits only if the beneficiary is a spouse. Brokerage accounts can have transfer-on-death registration, but most people don’t set it up. Go through your accounts and ask: can the person I leave behind get this money within 72 hours without a lawyer?
The Slowest Money of All
There’s one more situation, and it happens much later. If someone’s death was caused by another person’s negligence, like a distracted driver, a faulty product, or an unsafe property, you might have a civil claim. This can eventually recover lost future income, lost benefits, retirement contributions, the value of household services, and funeral costs. But this money takes a long time to arrive.
Here’s why it takes so long. In Oregon, for example, you have three years from the injury to file a wrongful death claim, and only the personal representative of the estate can file it, not family members directly. The estate must be opened before you can even start the lawsuit. Deadlines and procedures vary by state, and some are much shorter, such as Oregon’s one-year notice when a public entity is involved. The process is slow everywhere. This money helps families rebuild over years, but it doesn’t help right away.
Building the Survivor Layer
You don’t need an estate attorney or a whole weekend to do this. You just need to decide that part of your savings should have a different purpose than the rest.
Keep about three months of household expenses in a place a survivor can access right away, like a joint account or one with a payable-on-death designation. This money isn’t for earning interest. It’s so no one has to put big expenses on a credit card while grieving. Then, add POD or TOD designations to your other accounts if possible, so the rest of your money isn’t locked up.
After that, write down all the important information and tell someone where to find it. List every place you have money, your life insurance company and policy number, where your will is kept, and who to contact. Also, add a reminder to order at least ten certified death certificates, since every step depends on having them, and running out can delay everything.
If you’ve already built an emergency fund, you’ve done the hardest part. Now, make sure it will work for your loved ones if you’re not there to use it yourself.
This post may contain affiliate links.
More Recommended Ebike/Scooters
Check out these other ebikes and scooters I've reviewed:
- Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
- Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
- Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
- Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
- Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
- KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
- Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
- Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
- Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
- Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($75) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $75 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- US Bank Business ($400/$1200) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
- 5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
- US Bank Business. US Bank is currently offering new business customers a $400/$1200 signup bonus after opening a new account and meeting certain requirements.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $75 for opening an account.
- Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
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