It Pays to Plan

By Artemis Gouros

A funeral is an event that affects our families and loved ones emotionally as well as financially, so it is important that we consider ways to relieve those closest to us of these burdens. We plan ahead for most things in life, so planning for our own funeral is really a natural extension of these actions.

The Pre-paid Funeral Industry
The concept and practice of pre-arranging or pre-paying for your funeral is one that has existed in Australia for over 50 years. The industry is broken up into three options from which a client can choose. The first is the option to merely put money aside in an investment environment; a funeral bond. This bond can only mature on death, however, no guarantee against inflation and the rising costs of funeral expenses is given. The second option of a pre-paid funeral plan requires more input from the client. The client is required to consider all elements of the funeral service with a funeral director and enter into a contract to fix the costs of the chosen funeral service at current day prices. This amount is then invested the same as the funeral bond with the exception that this option does provide a guarantee against rising costs and inflation. There is no age or health limitation placed on the first or second option. The third option is not an investment but rather an insurance premium to provide for a funeral service in the future. A monthly premium is paid with the amount depending on the client’s age and health status.

Linking a Funeral Fund with a Pre-paid Funeral Plan
Funeral Plan Management, for example, provides a pre-paid funeral plan product to the senior market of Australia. This product is distributed through participating funeral directors Australia wide. The main benefit of this product is to save surviving family members the emotional and financial burden of arranging a client’s funeral. In addition the client also fixes the chosen funeral service at current day prices avoiding any additional cost at the time the funeral is needed, therefore guarding against inflation and the rising costs of funeral services. Another feature is that the client’s exact wishes are carried out. Often the only instructions for a funeral are left in a client’s Will. The Will may not be read until several days after the funeral, hence, too late for funeral service instructions to be followed. Finally, according to current legislation, a pre-paid funeral plan may enable a client to maximise their pension entitlement as the money paid into a funeral fund is not subject to the income or assets test or deemed earnings rules.

Today’s wisdom, tomorrow’s peace of mind
Planning your funeral with the help of a professional funeral director is a simple and sensible undertaking, just like making a Will. It need not be a sad sombre thing to do; many people take the opportunity to have an honest family discussion about their preferences for their funeral. This ensures that everyone is aware of your wishes. You should also ensure that your family knows whom to contact and where important documents are kept. Pre-planning a funeral means that you choose the type and style of funeral service you want and decide how much you wish to spend in advance. It is after all, your funeral. When considering the features and details of your funeral service, it is best to arrange a meeting with your funeral director. This meeting may be at your home or at the funeral director’s office, whichever you find more comfortable and convenient. Your funeral director will guide you through each step in planning your funeral. You can take all the time you need to decide on any aspect. Your funeral director will explain the products and services they provide and the cost of each item. You arrange the funeral you want.

What is a Pre-paid Funeral Plan?
A Pre-paid Funeral Plan is just that — a funeral planned out and paid for in advance. A funeral is the first step in the grieving process, an opportunity for family and friends to pay their last respects and support each other at a time of loss. A pre-paid funeral means you make all the important decisions and arrangements yourself and so take away any emotional and financial burden from your family. This equals real peace of mind. You arrange the funeral service you want with the funeral director of your choice at today’s prices, this is documented in your Pre-paid Funeral Plan Contract. A Pre-paid Funeral Contract details exactly the service you have requested for your funeral. This contract is a written record of the arrangement between you and your funeral director. The original contract is yours to keep. Your funeral director also holds a copy. It is important to keep your contract with your other important documents, such as your Will and personal financial records. You should also tell your family or legal representative where to find these important documents. Pre-paid Funeral Plans are covered by legislation in most Australian States and Territories. Funeral Plan Management assist your funeral director in ensuring that the Plan’s operations, advertising and promotional materials comply with all legislation in each of these Australian States and Territories. The money you pay for your Pre-paid Funeral Plan should be held independently of the funeral director and be properly invested and safeguarded until such time as the funeral services under the Pre-paid Funeral Plan are required (subject to any specific provisions of the Pre-paid Funeral Plan Contract). Only then should the funeral director be paid.

Funeral Plan Management Funeral Plan Management first emerged in NSW in 1984 as an independent company and is now part of the Lifeplan Financial Group. With approximately $1 billion in assets under management, Lifeplan has a 150 year tradition of looking after the financial security of their clients. Lifeplan Financial Group is a successful organisation with business interests in the growing areas of funds management and financial services, insurance, travel booking services, aged care and pharmacies. Funeral Plan Management is separate and distinct from other companies within the Lifeplan Financial Group as its main intermediaries are funeral directors; the remainder of the Group distribute their products through financial planners and retail outlets. Funeral Plan Management services funeral directors Australia wide and is a 12 staff operation based in Melbourne.

Your funeral director can provide you with further information concerning the appropriate investment of your Pre-paid Funeral Plan monies. In the unlikely event that your original funeral director is no longer in business, all you need to do is write to Funeral Plan Management, who will assist you in organising the transfer of your Plan to another funeral director or payment of the monies towards the cost of alternative funeral services. Likewise, if you move residence your funeral director will be able to assist you with the arrangements that will suit you and your family, or where necessary, the transfer of your Plan to another funeral director in your new place of residence. In summary, the Funeral Fund provides you with:

• an investment specifically designed to save for future funeral expenses
• a capital guarantee for your net investment plus declared bonuses
• exemptions from income and assets tests, including deeming rules for pension purposes
• tax-exempt benefits, subject to proposed tax rule changes from 1 January 2003
• flexibility to establish your Fund investment as part of a pre-paid funeral plan with your funeral director
• a 14 day cooling off period (no withdrawals otherwise permitted before death)
• membership not restricted by age or health
• optional Travel Protection insurance cover

For more detailed information about the benefits of pre-planning your funeral we suggest you discuss your needs with your funeral director or contact Funeral Plan Management on freecall 1800 804 731.