A prepaid funeral is exactly what it sounds like. It’s when you put funds aside for a specific burial and funeral service before you die. It means everything is all organised and ready to go after you’re gone.
The way it works is you choose and pay for the funeral in advance with your nominated funeral director. This means you lock in the exact details of the service and the price at the time of payment. You can choose to pay the entire thing up front or instead make a deposit and then pay regular installments, kind of like Afterpay but for funerals.
If you are wanting to purchase a prepaid funeral you should check the specific terms with the funeral director. Each funeral director sets specific guidelines for their services, and some may not include transfers interstate if you move later in life.
There are three main reasons you may want to pay for your funeral in advance.
1. Money money money
When you pay for your funeral upfront you are locking in the price on the day you make the payment. The average cost for a basic burial in Australia is $8,048 according to the Australian Seniors Cost of Death report. That price is increasing each year, particularly for traditional burials - land supply shrinks, the cost and availability of burial plots is rapidly increasing. You also need to consider rising wages and how that might affect every step of the process - from coffin-making to crematorium staff and even the fees of funeral directors. The cost of a funeral is increasing at around 5% each year so the earlier you lock in your funeral the more likely you are to save money.
2. Reduce the burden on your family
If you don’t arrange a prepaid funeral it will be your family or friends who end up taking on the responsibility. This can be incredibly stressful and emotionally draining during a period of immense grief. It can also place a financial burden on your family. If you died in debt or did not leave enough to cover the cost of a funeral your family will have to pay for the burial themselves.
According to the Cost of Death Report, 32% of seniors experienced financial hardship after paying for a funeral, and it took 68% of them at least six months to recover financially. Planning your own funeral and paying in advance will save your family this unnecessary stress, so they can use the time to process their grief.
3. Organise the farewell you want
While you can lay out your funeral wishes in your Will they are not legally enforceable. They act as instructions to tell your family what you would like them to organise. The only piece of guidance that must be enforced if you write it in your Will is any objections to cremation.
So if you want to make sure you get the sendoff of your choice, getting a prepaid funeral is the way to do it. You can choose your method of burial, your preferred funeral director and the church or cemetery where you would like a service to be held. If you’re not keen for something so traditional you can organise for a direct cremation and specify for a memorial service to be held instead. A backyard barbeque, beach bonfire or ocean burial can all be organised as part of a prepaid funeral service.
Decide what kind of funeral you want
You need to do this before you choose your funeral director - since you need to work with someone who can accommodate your preferences. You should determine whether you want to have a traditional burial, direct cremation, or a simple memorial service.
Choose a funeral director
Then you need to hire a funeral director who offers a service which suits your personal circumstances. If you want something personal, affordable, and eco-friendly you may like to consider reaching out to our funeral arrangers at Safewill Cremations.
Work out your method of payment
Once you reach an agreement on the service you want you need to determine how you plan to pay for the service: up front, or on a recurring basis (either fortnightly, monthly or yearly payments). Your method of payment will depend on who you choose to organise your funeral for you.
Finalise the details
When the money changes hands keep in mind it isn’t lining the pockets of your funeral director of choice. Every Australian state and territory has financial regulations in place when it comes to prepaid funerals.
When you pay for the service the money goes into a regulated funeral fund and it is held there until the time comes for your funeral to be held. This is to protect people from losing their money if the company providing the service closes down or goes insolvent. Each state or territory has different regulations, and there are fewer protections in the Australian Capital Territory and the Northern Territory.
Click the following links to read the specific legislation in each state or territory:
The funeral director must provide you with information for each component of the prepaid service supplied under the contract and the cost of each element. This should be done before you sign the contract.
Once the contract is signed they must transfer the money to the funeral fund within a certain time frame according to the laws in the state or territory. There is usually a cooling-off period where you can cancel the contract but you will need to pay a cancellation fee for doing so.
Then you’re ready to go. The contract is signed and the money is paid. You should leave all the details of your prepaid funeral (including the contact details of your funeral director) in a safe place. It is worth noting these instructions in your Will and notifying the relevant people so they can organise things quickly and easily when the time comes.
If you'd like to find out more about prepaid funerals contact one of our friendly funeral arrangers at Safewill Cremations for more information.