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April 11, 2021

Would you consider prepaying for your funeral?

For most people, the funeral planning process is a mystery.

Pre-paying your funeral relieves your grieving loved ones from the burden of making the various decisions and choices that are required when someone dies. Good investment? Probably not. But you could be doing someone a favour nonetheless.

In most provinces, there are two ways to go. You can either buy an insurance policy that includes pre-paid funeral arrangements, in which case the insurance company will look after the costs. Alternatively, you can purchase pre-paid funeral arrangements directly from the funeral home.

Here are a few things to watch out for.

Once you’ve made your arrangements, the funeral home must give you a copy of the contract, signed by both parties. The document should have an itemized list of services you’ve agreed to purchase and how much you’ll pay for them.

When you give the money to the funeral home, it must then deposit the money into a trust account (held by a bank or trust company), where it will earn paltry (although tax free) interest until the contract is fulfilled or cancelled. You could do the same with a TFSA, of course.

Even if you don't have the money to pre-pay, you can still pre-arrange your funeral with a funeral home. While your survivors will still have to negotiate costs, at least they know your wishes.

Has anyone in your family gone this route? Do you think you saved any money? Or was it simply about peace of mind?

By Gordon Powers, MSN Money





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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...