Is Pre-Planning Your Funeral A Smart Financial Move?


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Decisions about what will happen to you when you are no longer around are never easy. You have to weigh up the potential advantages and disadvantages of pre-planning a funeral just like any other decision. If you have heard about pre-planning and want to know more about it, you’ve come to the right place.

How Does Pre-Planning Work?

Pre-planning is a way of paying for your entire funeral including the casket or urn and all related expenses before you die. Your money is kept by the funeral home is a special account and is overseen by a contract called a ‘pre-need funeral plan’. As this money is invested through an insurance policy or in a bond, trust or escrow account it will attract interest until you die. This appreciation of the fund will cover cost inflation and any remaining funds will be returned to your estate.

Pre-Planning Is A Smart Emotional Move

The benefits of funeral planning are largely emotional. If you die without having put away funds to cover funeral expenses, this can put a huge burden on the family you leave behind. Pre-planning can eliminate the anxiety, arguments and stress that money worries inevitably cause. Another benefit is that you are protecting your loved ones from ‘emotional over-spending’ that usually occurs during bereavement. When suffering heavy grief, people are in no position to make prudent cost judgments and may by over-sold needlessly expensive options by unscrupulous funeral homes.

The Drawbacks Of Pre-Planning

Whatever they may tell you, funeral homes and legally obliged to accept caskets or earns purchased elsewhere. A quick look online might reveal that online prices are lower than those in funeral homes and come with 24-hour delivery. By pre-paying, you may simply be locking in to the already inflated prices funeral homes charge. The upshot of this is that you should shop around before you pre-plan to ensure that the funeral home you choose charges fair prices.

How Your Lawyer Can Help

Security of funds is a major concern for any financial investment. What happens if the funeral home goes bankrupt? What happens if you move and wish to use another funeral home for your service? These considerations, plus others, are crucial before committing yourself to a pre-paid funeral contract. A specialist law firm such as a wills and estate lawyer in Winnipeg for example, can help you do due diligence. Your investment should must be monitored by the Board of Funeral Services and protected by provincial regulations and other national organization such as the Canadian Deposit Insurance Corporation. The contract should be watertight with regards to the funds being registered in your name and only redeemed with interest earned at the time of your funeral.

Your Lawyer Can Help You With Tax Benefits

While the principle benefit of pre-paid funerals is that you are locked in to today’s prices, a lawyer can guide you towards tax efficient estate planning by helping you to realize a tax exemption on your principal amount. You are entitled to tax exemption of up to $35,000 on the cost of the both the funeral and cemetery services. Call your lawyer today to see how much they can help you save!

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