The idea of planning for your own funeral may seem slightly morbid, but from a practical viewpoint, it actually makes a lot of sense. Not only does it take the financial and emotional burden off family members to make arrangements, it also ensures your exact wishes are carried out when the time comes.
Pre-planning your funeral can be as informal as preparing a checklist and sharing your wishes with a family member. As a further step, entering into a formal contract for a funeral plan enables you to pay for your funeral in advance.
More formal arrangements can be set up with a funeral director, with money held by a Friendly Society regulated by the Australian Prudential Regulation Authority (APRA).
Why should I consider a pre-paid funeral?
Apart from peace of mind, entering into a pre-paid plan can offer benefits such as having a fee set at a fixed price (at today’s prices, protecting you from future rises in cost), knowing your funds are held securely by an independent entity and choosing the funeral director you want to manage things.
It can also help you to maximise your pension entitlements, as money spent for this purpose is not subject to income or assets tests.
Funeral plans are regulated by state law, except for the Australian Capital Territory, Northern Territory and Western Australia, where individual contracts stipulate the manner in which the funds are to be invested on behalf of the client.
Money is only paid to the funeral director when proof is received that the agreed service has been provided. The financial firm responsible for your funds is required to safeguard your money, even if the funeral home goes out of business.
How much does a pre-paid funeral cost?
The cost of a funeral will vary wildly, depending on who you choose to hold your service with, whether you opt for cremation or burial, the location, content of the service and types of personal touches included, such as floral tributes and booklets.
Once these options have been selected, however, the cost of a pre-paid funeral is fixed, regardless of future price increases.
The main cost components for a funeral are:
professional service fees from the funeral director for planning and conducting the service
coffin or casket costs, which vary according to the quality and style chosen
cemetery and crematoria charges
visual presentations, service books, memorial books and thank-you cards
newspaper notices, floral tributes, celebrant or clergy fees, music and catering.
You can choose to pay upfront or via a payment plan. Be sure to provide copies of the pre-paid funeral contract to family members, or file it with your will, so it can be accessed when needed.
What else should I know?
Apart from funeral arrangements, information you will be asked to provide to your funeral director include the person you wish them to contact after your death, and personal details to be recorded on a death certificate, including marriages, children and parental details.
The Australian Funeral Director’s Association Policy includes a pre-paid funeral standard including the following aspects, so ensure any agreement you enter into includes:
a written contract clearly stating requirements and services contracted and paid for
that the price for the pre-paid funeral is fixed
an independent financial institution holds the funds
a numbered certificate in your name.
You can find more information about pre-planning a funeral by phoning the
Australian Funeral Directors Association, or visiting www.afda.org.au.
The Association has the option of downloading a Plan a Funeral Form, which can be submitted online to the accredited funeral director of your choice.