Planning ahead with a Pre-paid Funeral Plan can be a simple way of ensuring your loved ones are protected in the future against unexpected costs and the worry of planning your funeral. Leave them with happy memories, not money worries.
What is a Prepaid Funeral Fund?
A Prepaid Funeral Fund allows you to set aside some or all of the required funds for your funeral in advance. These funds are then held for you until they are required. Funds cannot be withdrawn in your lifetime, giving you the peace of mind that they will be available when they are required.
The advantages of pre-paying all or part of your funeral include;
- Your loved ones will not be left to cover the cost of your funeral.
- If you combine your pre-payment with the pre-arrangement of your funeral, your wishes will be clear to your loved ones, easing their burden at a difficult time.
- Your funeral expenses will be paid promptly with any remaining balance in your Fund being paid over to the executor of your Will for the benefit of your estate.
- Present policy states that you may set aside up to $10,000 in a Funeral Fund, which is excluded from asset testing for the purposes of residential care subsidy assessments.
Which Fund to choose?
There are a number of Funeral Funds available in New Zealand, but our preference is the Legacy Prepaid Funeral Fund. No other Funds currently offer the benefits that come with the Legacy Prepaid Funeral Fund which is owned and operated by a charitable trust. Any interest earned on Funds is paid directly to the Legacy Trust for distribution to local charities and organisations.
This means your fund is working for the good of the local community from day one – thus helping you to create a better place for you and your loved ones to live in and enjoy. While other Funeral Funds may offer interest payments to you, experience shows that once management fees and tax are deducted, a large portion of this interest is eroded. With Legacy Prepaid Funeral Fund, all of the net interest is returned to the community on an ongoing basis and no fees are ever charged to your Fund.
- The minimum amount you can place into your Legacy Prepaid Funeral Fund is $5,000 and there is no maximum. Please note that under current government policy, it is only the first $10,000 deposited that is excluded from any asset test when assessing your eligibility for the Residential Care Subsidy.
- Please note that the Funeral Plan is not an insurance policy and no health checks or personal questions need to be answered. Anyone can prepay their funeral with Legacy Funerals Prepaid Fund regardless of their age or state of health.
- Your Funeral Fund will only ever include the amount you have paid into it, with all interest being returned to the community via Legacy Trust.
Frequently Asked Questions
What do my funds cover?
Funeral arrangements may include;
- Funeral, memorial service or other reasonable and appropriate services,
- Provision of a plot,
- A suitably inscribed headstone, plaque, memorial or other reasonable funeral related expense.
Who is paid from the Fund?
The cost of your funeral will be paid from your Fund direct to the funeral home (or to a person who produces evidence that your funeral expenses have been paid by them). Surplus funds not required for the funeral will be paid to your estate for distribution in accordance with your Will.
What if there are insufficient funds in my Fund for my funeral?
If any further payment is required to meet the cost of your funeral, your Funeral Director will make arrangements with your family or estate for payment.
What happens when I die?
When you die, your family will arrange your funeral as per your requirements (if known). Your Funeral Director will arrange for the costs of the funeral to be paid from your Fund.
I don’t have the full amount I would like to deposit right now – can I make regular payments?
Generally you are encouraged to make a one-off payment as this assists us with keeping our administration time to a minimum. You may establish a Fund with as little as $5,000 and, with the Trustees’ consent, add to this in the future with minimum top-up payments of $1,000 at a time.
Who administers the Fund?
The Funds are held in a registered bank by Legacy Prepaid Funerals Limited as a trustee. This company is a charitable company and is a wholly owned subsidiary of Legacy Trust. It operates under a Trust Deed that sets out the rules and conditions of the Plan. A full copy of the Trust Deed is available at www.legacyfunerals.co.nz
Will I pay management fees?
No, you will not be charged any management fees at all – which means that all money introduced by you will be available to cover your funeral. From time to time, the Funeral Fund will require funds to cover administration expenses and these will be drawn from the interest account before the money is returned to Legacy Trust. It is the Trustee’s objective to keep such administrative fees to an absolute minimum.
Are the costs of the funeral inflation proofed?
No. However you may deposit more funds into the Funeral Trust with the trustees’ consent (deposits must be $1000 or more).
Do I have to use the funeral company that’s arranged this prepayment for my funeral?
No. Your funeral can be conducted by any approved FDANZ Funeral Director. If the funeral is conducted by an organisation that is not a member of the Funeral Directors Association of New Zealand, the executor of the estate may apply to the Trustee for the funds to pay your funeral account.
If I need to withdraw funds at any time, can I do so?
Not generally due to the legalities around deducting the payment from your total assets for the purposes of asset testing. However there are some special circumstances that enable you to withdraw the money such as in the case where the Trustee recognises you have suffered significant financial hardship. You also may be able to withdraw your funds if you have permanently emigrated to another country.
What happens if I move?
The Trust is stand alone which means your Fund would not be affected. Your relatives would simply nominate a Funeral Director of their choice to receive the funds when they are required for your funeral.
I already have a Prepaid Fund with another funeral company. Can I transfer it to a Legacy Prepaid Funeral Fund?
Very likely. Contact us and we will make the necessary enquiries and arrangements.
How will my family know that I have this money set aside?
Your planning should include the completion of a Will. If you do not have a Will we recommend that you get some advice or assistance to have a Will put in place.
I would like to know more – what is the process from here?
Talk to us! Todd Gower Signature Funerals can also assist with pre-arranging your funeral should you want to make such arrangements at this time. By doing so, your family will be clear about your wishes, and you will have a better understanding of the amount you will need to set aside for the funeral service you require.
- Decide how much you want to pre pay.
- Complete the Application Form. This can be done online or by printing off a physical copy.
- Submit your payment via cheque or online direct credit.
- Cheques can be made out to Legacy Prepaid Funeral Limited for the amount of your pre-payment.
- Direct credit payments can be submitted using the details below.
Bank Account: Legacy Prepaid Funerals Limited
Number: BNZ 02-0466-0283399-000
Please indicate your name with the words “Funeral Trust’ in the fields on the bank’s website.
What will happen next?
You will receive a letter confirming receipt of your Application Form along with a confirmation statement that details the amount you have prepaid. This will contain all the information that you will need, plus a second copy of the details for your relative or executor along with simple instructions on how to claim when the time comes.