Is there a best way to preserve funeral funds?

manrow

With both of us over retirement age, it would be nice to provide a fund to cover funeral costs, so that at such a sensitive time it would be easily available when needed.


I am conscious of such costs continuing to rise, even though inflation is currently low. Would maybe an IS be a tax efficient way of dealing with this subject?

uknick

Buy a prepaid funeral plan. Not only does it guarantee funeral arrangements will be as you want them, it also saves money.

manrow

That's fine as far as it goes, but does not allow for inflation which is the solution I seek.

madbadrob

You dont have to take into consideration inflation because you pay for the funeral at todays prices and get the funeral at todays prices but at a time in the future.

Rob

bongonaut

Unick & Rob are quite right. A pre-paid funeral plan will give you a guarantee to provide the services it specifies at any time in the future without recourse to your family or estate. It is effectively the funeral provider, not the plan purchaser, who takes the risk over future price increases.

You do however need to be sure of what you are buying. Make sure it isn't a Whole of Life insurance policy claiming to be a "funeral plan". I recommend speaking to a local funeral director who you trust.

Some funeral plans guarantee certain third-party costs (eg cremation fees) as well as the funeral director's services. There will of course be additional costs such as flowers, catering, newspaper notices etc, but generally families are happy to settle these items at the time if the essentials of the funeral have been pre-paid.

wildcaravaner

Speak to a local funeral director. Independent family ones are best as they will be able to also sort out all the arrangements at the same time. You can take some of the burden off your loved ones when the time comes as you can make decisions now and express your wishes over music, hymns, flowers, donations, church, cremation or burial plot etc.

pattycake

I have often thought of buying pre-paid funerals for my husband and I to mitigate distress for our children when we die. We used a local funeral director when my parents passed away a little while ago. They were brilliant and I would not hesitate to use them again. However, they are what you might call a "one-man-band" and my worry would be that by the time my husband and I needed his services, he could have retired or even died himself!

In that scenario, the business could have passed into other hands. How does one protect the payment in such circumstances?

bongonaut

If you are buying a pre-paid funeral plan, you should ensure that the plan provider is registered with the Funeral Planning Authority (FPA). This ensures that money paid to cover the funeral is held within a properly managed Trust Fund or backed by suitable insurance. Trust Funds should be a legally separate entity from both the Funeral Director and the plan provider so that if anything untoward happened to either, your money is safe in the Trust (or Life Policy) to pay for your funeral at the time.

The FPA has a very informative website https://www.funeralplanningauthority.com