Sweryd says, partly because it locks in the expense at today’s prices, avoiding the risk of paying inflated costs years down the road.
Preplanning and prepaying can save up to 30 per cent, Mr. There are a few benefits, including having time to comparison shop. If that’s a concern, then prepaying may be the best choice, she says. The problem with both is they may involve delays accessing the funds, which may be problematic when a service must be carried out within a few days of death. Another is funding a small life insurance policy. Daddar typically tells clients they have three options: One involves setting aside about $10,000 to $20,000 in a savings account that the executor can easily access upon death. “Whether it’s cremation or a funeral, both cost in the range of about $10,000,” she says. While funeral services can range from a few thousand dollars at the low-end, the average cost is much higher. Planning ahead helps ease the financial burden for family members which, not even including the casket cost, can be significant, says Veena Daddar, a Toronto-based financial adviser with Pyramid Wealth Management Inc., an affiliate of Canada Life Assurance Co. “There is such a wide range … and a casket can cost anywhere from a few hundred dollars to upwards of $15,000.” Indeed, even just selecting a casket can be overwhelming, Mr. “All you want to do is be sitting at home, crying your eyes out with family – not picking out a casket.” Amid the shock and the grief, “you’re not in the headspace” of funeral planning, he says. Murton dealt with paying for the funeral while his father and brother handled the arrangements. However, his perspective changed after his mother passed away. “Truthfully, I didn’t focus that much on the issue because it just didn’t move the needle for most clients,” he says. Planning and paying for a funeral several years in advance is usually an after-thought, even among financial professionals, says Vince Murton, a senior wealth planner with Wellington-Altus Private Wealth Inc.
“Prepaying has definitely been growing as the baby boomers have entered retirement with their houses paid off and their kids’ university paid for,” he says. Sweryd is seeing a growing number of people who are preplanning their funerals – and prepaying for them too – instead of leaving it for loved ones to sort out.
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