On New Years eve many people make a resolution, yet while it is a common tradition some reports claim only 8% of these resolutions are ever kept. Yet, whilst it is easy to get caught up in the frivolities of the occasion, the new year provides a great opportunity to plan the year ahead.
We plan, with insurance for our cars, our house and often our life. We organise wills, superannuation and financial planning. Although pre-planning your funeral is probably not on the top of your list, it is worth considering why it may be for some.
Pre-planning or pre-paying for your funeral is not a new concept and has been in Australia for the best part of a century in various forms. In more recent years we have been flooded on morning TV with funeral insurance and the so-called benefits of it. However, Funeral Directors generally don’t regard this as funeral pre-planning as the funeral is never actually pre-planned and paid for.
Funeral pre-planning typically involves sitting down with your funeral director and working through all the items and services you would want for your funeral. This way the client can ensure the burial or cremation services are meaningful, appropriate and affordable to their unique needs.
The funeral is costed at today’s price and paid for. Cemetery or crematorium fees may be pre-paid directly with the cemetery or crematorium and can be organised by your funeral director or paid direct. The balance of the funeral funds is invested in a funeral bond in the clients name and assigned to the funeral director on the death of this person. This way the funds are secured, held at arms length from the funeral director and capital guaranteed.
The funeral director will issue a contract showing all the goods and services pre-paid and the monies paid.
So why would you consider pre-planning your funeral?
For many its simply a matter of “Peace of Mind”. So that your family is not burdened with the expense and not knowing your wishes at the time of your death. Robert Nelson, from Robert Nelson Funerals, says “that for many pre-planning your funeral is about planning for the future so that people can get on and live their life, knowing all their affairs are in order.”
For others, it may be because of some of the financial benefits of pre-paying your funeral. On 1 January 2017, the Australian Government implemented changes to the assets test used to calculate pensions. Investments of up to $13,000 (current threshold for the 2018-19 financial year) in a funeral bond such as the Bendigo Funeral Bond, are exempt from Centrelink and the Department of Veterans’ Affairs income and assets tests. For more information on these changes to the pension assets test, you should contact Centrelink, Department of Veterans Affairs or your Financial Adviser.
So what does it mean when your funds are capital guaranteed?
It means your original and subsequent net investments plus declared bonuses are guaranteed upon your death.
Finally, once paid you to have nothing more to pay at the time of death for your funeral. The funeral directors contract provides a guarantee that your original investment will cover the cost of the funeral into the future.
So if its “peace of mind”, getting your finances in order or it seems just the right thing to do at this time, call Robert Nelson Funerals and discuss your requirements.