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Prepaid Funeral Trusts

 
What is a pre-paid funeral trust?
A pre-paid funeral trust (also known as a Funeral Plan) is a fund specifically set aside to meet your funeral and memorial expenses, including the cost of a plot and a gravestone or plaque. Your pre-paid funeral trust also lets you provide specific directions as to how you wish your funeral to be conducted and the type of memorial you would like.
Why have a pre-paid funeral trust?
Funerals generally range in cost from $4,000 to $10,000. Setting aside funds to meet your funeral and memorial expenses will mean you can minimise the stress and worry for those left behind. Your family can take comfort in the fact that your funeral will take place according to your wishes and that it has been taken care of financially. The remainder after the payment of the funeral and memorial costs is paid to the estate and distributed to your beneficiaries.
What about the Asset testing exemption
You can set aside up to $10,000 for your funeral expenses and still qualify for the current asset testing exemption. Income earned on the trust is also exempt, provided the balance held in your trust does not exceed $10,000 at the time you, or your spouse/partner, apply for a residential subsidy.
How does a pre-paid funeral trust work?
  • The minimum establishment contribution is $4,000. Additional contributions of $1,000 or more can be made any time in multiples of $100).
  • A small establishment fee of $150 is payable at the time of application (reduced to $100 if your will appoints Perpetual Trust as executor and trustee).
  • A management fee of 1% is charged annually on the amount(s) deposited.
  • A 1% management fee is payable on termination of the trust.
  • A fee of $45 is charged for preparing tax returns and annual accounts.
  • Interest payments are compounded to your trust as trustee's income. There is no need to declare the interest for tax purposes. A charge of 5% is made on the interest received.
  • All fees are deductible for tax purposes.
Other benefits
  • You, or your family, have the choice of funeral directors.
  • Conservative investment policy - low risk interest bearing deposits and managed funds.
Why use Perpetual Trust?
  • Expert trustees with 125 years experience in managing trusts and estate planning.
  • We exist in perpetuity - we will not go out of business or die, leaving you without a trustee or adviser.
  • We will be here when you and your family need us.
  • We are independent and will act objectively and impartially when dealing with family members.
  • We offer many complementary services including financial planning, investment advice, wills, trusts, investment funds, mortgage lending and much more.

Didn't find an answer to your question?

Please feel free to make an online enquiry and one of our advisers will get back to you. Alternatively you can call your nearest Perpetual Trust office on 0800 737 738 or e-mail us: email@perpetual.co.nz.