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July 2013 | www.selectasset.com
When preparing for the worst, careful planning is best

Anticipating the unexpected is one of the great dilemmas of life. We all want to think positive and remain optimistic, yet no one wants to be caught unaware, or unprepared, when trouble strikes. Whether it’s simply a sudden thunderstorm, or a more serious issue such as a financial crisis, or a death in the family, planning for the worst can be a vexing exercise.

Unfortunately, severe illnesses and accidents strike without warning, so it’s best to consider your options and form a loved-one’s funeral plan when you are in a frame of mind to think clearly. And the funeral of a loved one is one of the most important expenses you are likely to face.

In Japan, funerals and the related ceremonies are known to be quite costly. If you have a Japanese spouse and, by extension, Japanese in-laws who you may be responsible for, you will need to plan carefully. For practical reasons, many long-term foreign residents opt for Japanese services, including cremation and family plot interment, as transporting a body overseas can be quite costly. Here’s a guide to some of the expenses and options you will need to consider for a Japanese funeral.

Typically, a funeral runs from ¥2 to ¥3 million in Japan. According to a 2008 study by the Japan Consumers’ Association, the average cost is ¥2.31 million, which includes about ¥400,000 for catering to attendants and ¥550,000 for the services of a Buddhist monk.

The A-B-C’s of a Japanese Funeral & Cremation

However, that does not include the headstone or memorial services at the cemetery. Generally, Japanese people have a family plot where the remains (ashes in a small urn) for all members in the family register are placed.  Thus, if a woman takes her husband’s name, she becomes part of his family register, and her remains, and eventually their children’s, will be interred at his family plot. For this reason, and to avoid the expense of purchasing a new plot, long-time foreign residents, even men with Japanese wives, may plan to be interred at their spouse’s plots.

The basic stages of attending to a death in Japan include:

  1. Delivery of body from morgue to funeral home,
  2. Wake or viewing,
  3. Funeral and cremation (the day following the wake),
  4. Preparation of a small altar in the home, where the ashes remain for 49 days,
  5. Ceremony at temple for interment of the ashes.

Here is a breakdown some typical expenses, as found in a 2006 Japan External Trade Organization (JETRO) report on the funeral industry. Preparation of altar for viewing and funeral: ¥600,000; use of funeral hall facilities: ¥200,000; flowers and wreaths: ¥120,000, hearses and transportation: ¥80,000; gifts: ¥1,000 yen per visitor; food: ¥4,000 per visitor. It is also customary to give tips ranging from ¥3,000 yen to ¥10,000 to various attendants serving the event, such as cremation technicians and funeral program directors.
The actual JETRO report can be found here.

Financing gifts for guests and names for the afterlife

Friends and relatives who attend the viewing and the funeral generally bring cash gifts ranging from ¥5,000 to ¥30,000 yen, depending on their relationship to the deceased. The family of the deceased is later expected to acknowledge each gift with a returning gift of about one-third the value. Funeral facilities will offer to handle this service, providing a catalog with a selection of gifts, such as hand towels, and arranging for delivery.  Some people like to provide more personalized gifts for close friends and relatives, but it is of course more costly and difficult to arrange.

At the interment or burial ceremony (Japanese tombs are above ground), most Buddhists will select a new name for the deceased to take into the afterlife. It is purchased from a monk for a fee ranging from ¥300,000 to ¥2 million. The name is not required, but the temple handling the ceremony will strongly recommend it, and more traditional families (especially devout Buddhists) may feel compelled to buy the service.

Looking for a tax break? The Japanese government will offer a refund of ¥70,000 for evidence of a funeral ceremony and cremations. Your funeral director will tell you how to apply for it.

Generally, in a Japanese family, the first son assumes the responsibility of planning for and organizing the funeral and all related ceremonies for his parents. And because Japanese tend to live longer, the remaining spouse is often unable to handle the role. And of course, the duties are often passed on to any remaining offspring who are in the best position to coordinate everything.

What about purchasing your own family plot?

If you must purchase a plot, be prepared to shell out some serious yen. Public graveyards are quite expensive, and the rules of real estate apply—it’s all about location. According to the Japan Times’ Yen For Living blog, Tokyo’s famous Aoyama Cemetery charges between ¥4.8 and ¥10 million per plot, while the average cost at Yanaka Cemetery, a site holding the ashes of some of Japan’s most famous historical figures, is about ¥3 million. However, bargains are available if you look around, smaller plots at less popular sites can be found for less than one million yen. All cemeteries also charge annual maintenance fees of about ¥4,000 to ¥12,000 per plot, according to the Japan Times.

The cost of repatriation of a deceased family member can vary widely from U.S. $5,000 to as high as U.S. $15,000. Unfortunately, most services keep their pricing vague, so shop wisely. For example, if arrangements are made to cremate the remains before transportation, the fees can be significantly reduced.  If you must send a body overseas, it’s best to contact your embassy to find out what the rules are and what documentation is required.

So what’s the best plan of action for the worst-case scenario? The most logical approach is to first understand what costs you are likely to be responsible for, and then make sure the funds are available whenever you need them.  For ideas on how to make that scenario work out, contact Select Asset Management to speak to one of our senior advisors. We can help you consider prudent financial planning for any likely future.

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