Funeral Plans (13)
The latest figures for 2018 have shown that the average cost of a funeral is now £4,271 although it can be much more than this depending on the options chosen.
A funeral plan is a means by which people can protect their loved ones against rising funeral costs. They also help to eliminate any uncertainty or indecision regarding what a person’s preferred arrangements should include, giving total peace of mind.
The different funeral plans on the market offer different levels of guarantee. All funeral plans guarantee the Funeral Director’s costs and most give a hefty cost to towards third party costs known as disbursements. Some will, for a small fee, guarantee 100% of all costs excluding the wake, flowers and special requests.
With most funeral plan providers, the money a customer pays for their plan is invested in a ring-fenced trust fund that is run independently and has no links to the Directors of the company.
Through the investment of the trust fund, the monies grow in value over the course of the plan-holder’s lifetime. Then, when the Planholder passes away, monies (+uplift as applicable) are released from the trust fund and paid to a local, reputable Funeral Director who then carries out the funeral in accordance with the instructions contained in the plan.
Because the Trust Fund is entirely independent of the Company, in the highly unlikely event that a Provider should go into liquidation or cease trading for any reason, your investments would remain secure and ring-fenced specifically for the purpose of providing the funeral they have bought and paid for. This is because the trust fund is not an asset of the company and because you are the primary beneficiary of the Trust Fund.
Disbursements (otherwise known as 3rd party charges) are cost elements of a funeral that are outside of the funeral plan provider’s/Funeral Director’s control. These include:
1. Cremation fee (or interment* fee, if burial)
2. Doctor’s fee
3. Minister’s/Celebrant’s fee for committal service at crematorium (or graveside, if burial)
*Interment means digging or opening of a grave
Currently, the national average for the above 3 disbursement is around £1000, so Providers offering a higher level than this with an uplift in line with inflation should ensure all costs are met.
Many Funeral Plan providers will allow this and it is something we always ask before making a recommendation.
No, unlike many insurance products there are no medical tests to pass.
As long as you remain in the UK your plan will not be affected.
Yes. The assets and liabilities of the trust must, at least once every 3 years, be determined, calculated, and verified by an actuary who is a Fellow of the Institute of Actuaries or the Faculty of Actuaries.
Apart from the very basic cremation only packages currently available, all other plans will ensure a local Funeral Director.
Most providers give the same money back guarantee within 30 days of purchase. Thereafter, each provider is slightly different but we will explain the terms of whichever plan we recommend to you.
The answer is yes! Everyone over the age of 18 needs a will, whether you have a family or not.
Your will needs to include all of your assets including property and savings and who you want them to go to when you die. It needs to include who will look after your children in the event of your death, if they are under 18 years old. You also need to appoint Executors of your will who will deal with your estate after your death.
Did you know that if you live in England or Wales and die without a legally valid Will, the government will decide who gets what? Making a will is imperative if you want to ensure your wishes are carried out and your loved ones inherit your estate.
If you die without making a will, your estate will go to: Surviving spouse or registered civil partner, Children, Parents, Brothers, Sisters, Grandparents, Uncles, Aunts. If you do not have any surviving relatives, your assets will be passed on to the Crown.
Ideally, you should choose more than one person to be the Executor of your will, just in case one of your Executors becomes incapable of carrying out their duties in the event of your death. You need to choose the Executors very carefully and they must be people that you trust. You can choose friends, relatives, solicitors or even accountants if you wish.
A Will is an extremely important document, and we highly recommend that it is drawn up by a professional. Doing your Will yourself is a huge risk and there are no guarantees that it will be legally valid.
The only way to change your will is to either make a new one or add a codicil (which amends your will, rather than replacing it). If you choose to add a codicil, it must be properly witnessed to be valid. There is no limit on how many codicils can be added to a will but they are only suitable for very straightforward changes. If a complicated change is involved, it is usually advisable to make a new will.
Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who’s died. There’s normally no Inheritance Tax to pay if either:
- the value of your estate is below the £325,000 threshold
- you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club
If the estate’s value is below the threshold you’ll still need to report it to HMRC.
If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £475,000.
Both wills and trusts are two ways to transfer your estate, but which one is better for you depends on your circumstances. The main difference between a will and a trust, is that a will goes into effect only after you die, while a trust takes effect as soon as you create it.
A Deed of Variation allows beneficiaries to rearrange or vary their entitlement and can therefore alter the terms of a will. You can rearrange how money will be distributed, provided everyone who would inherit under the will agrees.
A deed of variation can be used by any person who receives a gift under a will to redirect their inheritance to another person. It must be done within two years of the death and you will need legal advice.
Every person’s will is different as it depends upon assets and circumstances. Simple wills may be suitable in situations where there are no complexities at all.
A living will allows you to write down any treatments that you don’t want to have in the future, in case you later become unable to make or communicate decisions for yourself.
Mirror wills are virtually identical wills where one person in a couple leaves their estate to the other in the event of their passing away.
Where the situation is a lot more complex and trusts are involved, you will need a more complex will.
We offer a consultation service to guide you through the entire process, no matter what your circumstances are.