Pre-paid funeral plans

A study has highlighted some of the potential pitfalls associated with signing up to such plans including:

• Pre-plan firms are not legally required to disclose the portion of money that they retain from the payment made by the customer
• Consumer understanding of what is and is not included within plan
• The variance in fees charged by firmsWe would echo the advice contained in the article. – If you are thinking of buying a funeral plan, you need to check the terms very carefully to ensure you are aware of what is and is not included in your plan.
• A funeral plan, like any other high value investment, has to be considered as part of a well thought out estate plan. Depending on the timing of your investment, this can have unexpected effects on your financial plans whilst you are still alive.

Further findings from the study can be found here: https://www.itv.com/news/2018-10-11/pay-now-die-later-funerals-uncovered/

Financial Ombudsman

In a recent case that was presented to the Financial Ombudsman in relation to the assessment of care fees, the Financial Ombudsman found that in this particular instance, the purchase of a funeral plan amounted to a deliberate deprivation of assets when the local authority was assessing a person’s eligibility for help with care home fees. This will in turn have led to the person in question having to spend more on care fees than he or she would otherwise have had to.

Finally, it is worth mentioning that your funeral costs are ultimately payable by your estate, whether you buy a funeral plan or not. Most banks will now release the funds from your bank accounts directly to the funeral directors upon presentation of the invoice and death certificate. This can happen before your executors have even obtained probate, so nobody ends up out of pocket.

If you would like Wealth Protection advice, please email WealthProtection@psg-law.co.uk  We are here to help you.