Funeral planning and pre-paying can’t be ignored

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9 September 2016

Funeral planning and pre-paying can’t be ignored, say funeral directors

Kiwis aren’t great at putting money away for a rainy day. While some 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, says the Funeral Directors Association of NZ.

Chief Executive Katrina Shanks supports the goals of Money Week, and welcomes the opportunity to remind people to plan and save for their funeral among their other financial goals.

“If I could give one piece of advice, it would be to take the pressure off your family by pre-planning your funeral.

“We can’t say funeral costs are unforeseen – the only thing unknown is the timing. That means the time to plan is now. We estimate that unfortunately less than 5 per cent of New Zealanders have pre-paid or pre-planned their funeral. For the benefit of families, that statistic needs to change.

“I frequently hear our funeral directors talking about the difficulty that families face when it comes to honouring a loved one – funeral options, choices, and costs can be daunting at a time when people are grieving.

“I’d like to see more families concentrating on gathering, remembering and celebrating a life, rather than worrying about the details of funeral planning and the related costs.

“Alongside pre-planning, I encourage people to pre-pay their funeral. As well as taking the financial strain off your loved ones, there are strong fiscal reasons for putting aside funds in a pre-paid funeral plan.

“When thinking about the cost of a funeral, many people say they aren’t worried because they assume the proceeds of selling their house will cover it. But 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, leaving loved ones still having to find the funds to pay in the meantime. “Secondly, many of us will 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 pre-pay your funeral, and if the need later arises 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, that 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 has one less thing to worry about when the time comes. Which way would you rather spend your $10,000?

“Advance planning for your funeral is an extension of retirement planning and one we as a society must consider sooner rather than later.”

ENDS

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