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Dispelling the Myths about Funeral Preplanning – Part 1

A Coffee a Day is a Funeral Prepaid

iStock_000023619424XSmallReally?  Absolutely!  It can cost as little as $50.00 per month or even less to prepay your final funeral arrangements.  The couple I worked with this past weekend started their prepaid funeral arrangements for under $25.00 per month.  We worked within their budget and what they wanted to fund first and that is how the contract was set up.  We will add different items into the prepaid funeral contract over time and they will eventually have their entire funeral pre-funded within a budget that is comfortable to them. In this blog series, we will dispel some of the myths about funeral pre-planning.

Unfortunately, many people are under the impression that funerals are expensive or that they have to prepay funeral arrangements in one lump sum.  This is not the case. The average funeral cost in Ontario is around $8,800.00, and I have organized funerals that were $2,000 to over $15,000.00.  It really does depend on what you want to set up ahead of time and how you want your life to be celebrated.  People often ask me about the cost of a funeral, and that can depend for example on the casket selected.  Caskets are usually made of wood, metal or cloth covered particleboard.  The entry level pricing for a casket is around $600.00 and can go as high as you wish.

When you decide to prepay part or all of your funeral arrangements, there are two things I would strongly encourage you to ask and know the answers to:

  1. Are you working with a licensed Funeral Establishment and licensed Funeral Director?
  2. Is the future funeral cost guaranteed?

Why is this important?  There are huge advantages to working with qualified individuals and establishments to prepay part or all of your funeral arrangements.

Federally, the Government of Canada has permitted special tax considerations for Eligible Funeral Plans or Arrangements (EFA).  An Eligible Funeral Plan or Arrangement can only be provided by a Licensed Funeral Establishment and Licensed Funeral Director. The Federal rules state that a purchaser of an EFA is allowed to earn tax-exempt interest on the first $15,000.00 within the EFA. Additionally an EFA is insured up to $100,000.00.

When you are considering funding your funeral prearrangement, the first and second questions are again important.  If you elect to pay part or all of your funeral pre-arrangements over time, it is the Funeral Establishments decision to guarantee or not guarantee the future funeral costs.  The self-regulated professional rules through the Board of Funeral Services, state that a funeral home may guarantee or not guarantee the items included in pre-funded funeral prearrangement.

If a funeral home elects to guarantee the prepaid funeral arrangement, they must guarantee all of the items included on the prepaid funeral contract. If a funeral home elects not to guarantee the prepaid funeral arrangement, then you will in essence have funds on deposit to apply toward the funeral contract at the time the funeral is provided.

Guaranteed prepaid funeral arrangements provide you and your family with peace of mind knowing that decisions have been made, items selected and the future cost is guaranteed to your family at the time the funeral is provided.  The Funeral Establishment takes on the risk of inflation and the rising costs of funeral arrangements over time.   For these reasons, many Funeral Establishments do not include third party disbursements on prepaid funeral contracts.  As an example, 14 years ago I would include newspaper notices, or cemetery opening and closing costs on funeral pre-arrangements. These costs have increased tremendously over the years and I do not include them now on guaranteed prepaid funeral contracts.

Over the years, a lot of work has been done to revamp the legislation around the end of life planning sector.  There is pending legislation in the process and it is very likely that the approved legislation will mandate all funeral establishments to guarantee prepaid funeral arrangements.

What do you think? Have you explored funeral pre-planning? I’d love your feedback. And don’t forget to leave a link back to your own blog via the commentluv feature here on my site.

Until next time,



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