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casket legacy matters kat downey
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9 Financial Benefits of Re-Investing Your Tax Returns with an Eligible Funeral Arrangement

Do you receive a tax refund? If yes, you may be wondering how to best optimize your hard-earned money in a way that is both meaningful and financially sensible for you and your family. Why not have your money work hard for you by prepaying your future funeral arrangements? The best way to do this is by using all or part of your tax refund to set up an Eligible Funeral Arrangement. 

What is an Eligible Funeral Arrangement 

An Eligible Funeral Arrangement (EFA) is a fully prepaid or partially prepaid eventual funeral arrangement that you set up with a licensed Funeral Home and a licensed Funeral Director. 

Financial Benefits of an Eligible Funeral Arrangement 

The financial advantage of prepaying funeral arrangements is that your money is: 

  1. Always invested under your name 
  2. Your funds are insured up to $100.000.00 
  3. Your funds earn tax exempt 1.75% interest 
  4. There are no medical questions asked 
  5. It is easy to enroll 
  6. It is simple process 
  7. It is a loving gift to your family 
  8. You are in full control of your money and your wishes 
  9. You lock in the future price of the funeral and any inflationary risks rest with the funeral home, not your family.  

Why is This a Good Idea? 

Eventually, we will all need to have some type of funeral to celebrate our life. Don’t leave your family a huge funeral tab. Instead, leave them with a solid plan for how you want your life to be celebrated.  Your loved ones will be both relieved and grateful that you already have a plan in place for them to follow – completely free of financial strain or burden. Show your family how much you truly care, even after you’re gone.  

I would love to hear from you and help get the conversation started.  You can connect with me via email or telephone, leave a comment here on the site or click the contact tab at the bottom of the screen if you are reading this post on the website. Don’t forget to join the conversation on Facebook and Twitter too. 

Until next time, 

Kat 

Katherine Downey is the #1 Funeral Preplanning Professional in Canada for the fourth time. She is a professional educator, author, licensed funeral director and insurance advisor. Not only is she a Certified Professional Consultant on Ageing and an Executive Advisor, but she is compassionately understanding.  To set an appointment or have your questions answered, please contact Kat directly.  

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Funeral Memorial Service – The Cost of Procrastination

funeral preplanner MississaugaHave you ever wondered how much procrastination could cost you? Eight years ago a gentlemen stopped into the funeral home inquiring about the cost of a Memorial Service. During our conversation I outlined what was included in the service and the cost of this type of funeral.

At the conclusion of our discussions he gathered up the quotation sheet and the pre-need information package and said “This sounds really good, I am going to go home and talk to my wife about this, and we will get back to you in a week or so.” I thanked him for his time and mentioned that I would follow up with him next week. When I followed up they were busy with other things and promised they would get back to me.

They did 8 years later.

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Can Prepaid Funeral Payments be Deducted on Tax Returns?

licensed Pre funeral planner MississaugaOne of the questions that I am asked is whether or not prepaid funeral payments can be deducted on Personal Tax Returns. The answer unfortunately is no and here’s why.
The Canada Revenue Agency (CRA) has designated that funds held in a prepaid funeral account called an Eligible Funeral Arrangement (EFA) must be guaranteed to $100,000.00 and earns tax exempt interest. The funds held in the EFA continue to earn tax exempt interest throughout the life of the funeral beneficiary.

When the funeral beneficiary dies, the funds are released to the selected funeral home. These funds are used to pay for the desired type of funeral service. If there are residual funds in the EFA, a T5 may be issued to the estate of the deceased. Read more

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What is a State Funeral & How is it Organized?

state funeralThe recent state funeral to honour the former Federal Finance Minister Mr. Jim Flaherty, peaked my interest as to how a State Funeral is organized in Canada.

Under the asepsis of the Department of Canadian Heritage (DCH), a state funeral is a public event, held to honour and commemorate present and former Governors Generals, Prime Ministers and sitting members of the Ministry. Also a state funeral may be offered to an eminent Canadian at the discretion of the Prime Minister.  A State funeral offered, organized and executed by the Government of Canada – Governor General-in-Council, with the DCH as the lead agency, offers the public an opportunity to pay their respects to the deceased.

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Do You Wish you Had More Contribution Room in Your TFSA?

23735008_sDo you wish you had more contribution room in your TFSA? Consider this.  If you made TFSA contributions since 2009 then you may have contributed the maximum of 5,000.00 per year, totaling approximately $20,000.00.

If you were to prearrange and prepay your eventual funeral arrangements you would be moving your money from a tax sheltered TFSA into a stable, guaranteed and tax-saving EFA – eligible funeral arrangement.

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3 Major Changes to the Ontario Funeral, Burial and Cremation Services Act

bigstock-Mourning-woman-on-funeral-with-47269159On July 1 2012 the new Ontario Funeral, Burial and Cremation Services Act comes into effect.  There are 3 major changes in the legislation concerning prepaid funeral contracts.  They are:

  1. The Funeral home must guarantee all goods and services listed on the prepaid contract.
  2. Funeral Homes may not accept prepayment for cemetery related services.
  3. The administration fee has increased.

Each of these legislative changes is discussed in turn.

1. Prepaid funeral contracts

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