While some of us do manage to save money for the good things in life such as holidays or weddings, planning for funerals is often not even considered, and yet it’s a life event we all face. As a funeral director, I see first-hand the difficulty families faces when it comes to honouring a loved one – funeral options, choices and costs can be daunting. If I could give one piece of advice, it would be to take the pressure off your family by preplanning your funeral.
You may have had a conversation with your loved ones about your wishes, but those dinner chats years ago might not come to mind when it matters most – and what if the children each have a different recollection of that chat? It happens more often than you think. Preplanning allows you to be involved in the choices about your final farewell. From decisions such as cremation or burial, to the form of service or the music you would prefer, you can record your preferences as a guide for your family. I’d like to see more families concentrating on celebrating a life and grieving the loss, rather than worrying about the details of funeral planning.
Alongside preplanning, I encourage people to partially prepay their funeral. As well as taking the financial strain off your loved ones, there are strong fiscal reasons for putting aside funds in a prepaid funeral plan. When thinking about the cost of a funeral, many people say they aren’t worried as they presume the proceeds of selling their house will cover it; however there are two reasons this isn’t such a great plan. Firstly, the settlement of an estate and subsequent sale of a property can take many, many months. Can those you love afford to pay for the funeral while they wait for your house funds to come through? Secondly, many of us spend our latter years in a retirement village or residential care facility rather than in our own home. The funds from the sale of the family home can get eaten up by the cost of that care, leaving uncertainty about what amount would be left to fund a funeral.
Alternatively, if you partially prepay your funeral, and if the need later arose for long-term residential care in a rest home or hospital, the value of that pre-paid funeral, up to $10,000, is excluded from the Government’s financial means assessment for the residential care subsidy. In basic terms, this means up to $10,000 that you might otherwise have been forced to spend on subsidising your care, can be set aside for your funeral so your family have one less thing to worry about when the time comes. Which way would you rather spend your $10,000?