Paying for a funeral in advance

A prepaid funeral. You choose the funeral with a funeral director and pay for it now, at today's prices. What you've bought is that funeral — not an amount of money.

A funeral bond. An investment you put money into, which pays out when you die. It isn't tied to a particular funeral or a particular funeral director. Your family uses it for whatever they arrange.

Funeral insurance. Not the same thing at all. You pay premiums, usually monthly, usually forever, and a set amount is paid out when you die. The question to ask — and to get answered in writing — is what you will have paid in by the time it pays out, and what happens to the money if you stop paying.

Services Australia's position is that funeral costs you pay for in advance normally don't count in your assets test. There are exceptions, and for funeral bonds there is an allowable limit.

There's no figure here on purpose. It changes, and Services Australia doesn't publish it on the summary page either. Look it up on their site or ring them before you commit an amount — the guide on government services has the details of how to reach them.

If you receive the Age Pension or any other payment, this is worth getting right before you hand money over.

• Where does my money go — into a trust or fund, or into the business?
• What happens if this company is sold, or closes?
• Is the funeral fixed at today's prices, or could my family be asked for more?
• Is it transferable if I move interstate, or change my mind?
• What exactly is included, itemised, and what isn't?
• If my family wants something different on the day, what happens?

Get the answers in writing. A prepaid funeral is one of the few contracts you will never be able to complain about yourself.

A prepaid funeral or a funeral bond that nobody knows about is money that gets paid for a funeral twice.

Write down which company, which plan, and where the paperwork is — the printable *Important documents record* has a line for it. Tell your executor. Tell whoever is likely to be arranging things.