Planning for the future is something that everyone should take seriously, and this includes planning for what happens after we pass away. While death is an uncomfortable topic, it is essential to address to ensure that our loved ones are taken care of when we are no longer here. One way to do this is by setting up a funeral trust.

Funerals are an expensive exercise and on average cost around $10,000. This is a cost that you can help control now, to safeguard your family from absorbing any debt as a result.

Funeral Trusts Explained

A funeral trust is a type of trust that is designed to cover the costs of your funeral and other final expenses. By setting up a funeral trust, you can ensure that your family won't be left with the burden of paying for your final expenses. This type of trust is particularly beneficial for those who don't have life insurance or who want to ensure that their final wishes are carried out without putting a financial strain on their loved ones.

Benefits

One of the benefits of a funeral trust is that it is exempt from asset testing when applying for a residential care subsidy. If you need to move into a residential care facility, the Ministry of Health offers subsidies to help cover the cost. To qualify for these subsidies, you must undergo a financial means assessment, which includes an assets and income test. Currently, up to $10,000 of any pre-paid funeral of a person or their spouse is exempt from the assets test, and any interest generated from the pre-paid funeral amount is exempt from the income test. Therefore, you can set aside up to $10,000 for your funeral and still qualify for the residential care subsidy.

Another benefit of a funeral trust is that funds will go straight to the funeral director to pay for your funeral without waiting until your estate is wound up. Estate administration can be a lengthy process and funeral bills require payment immediately. A funeral trust will ensure that you can relieve your loved ones of some financial burden at an emotional time.

Setting Up a Funeral Trust

To set up a funeral trust simply contact one of our Private Wealth experts. Our team will explain all the details and provide a simple form for you to complete. The initial minimum investment contribution to set up a funeral trust is $2,000 with an establishment fee of $150 and you can continue to add to your funeral trust over time with minimum payments of $1,000.

Setting up a funeral trust is an essential part of future planning that will give you peace of mind. To find out more about funeral trusts, visit our website here or contact our team today at Trustees Executors by calling 0800 878 783 or email [email protected]