The prepaid funeral is an optional extension of the prearranged funeral. There is a significant difference in cost from the “at need” and “prepaid” funeral. The Morris Funeral Chapel offers a number of options like Preferred Funeral Planning (PFR) This is a one time cost saving payment based on the funeral that has been selected. You may also select payments that can be made over one to five years, annually, semi- annually, quarterly or monthly. This plan also offers a Travel Protection Plan (TPP). This is a one time payment that covers all costs of the deceased to return home from any place of death in the world. All fully prepaid PFP`s with the Morris Funeral Chapel are guaranteed. Even if the inflated cost of the prepaid funeral at the time of need is higher than the accrued trust account, Morris Funeral Chapel will absorb the shortfall. The average cost of a traditional funeral today is about $5000 – $6000 plus cash disbursements of $300 to $1,500 for extra services which are provided by someone else but arranged by your funeral service provider on your instructions. These include death and regulatory fees, the cost of opening and closing the grave, cremation, church/clergy fees, newspaper notices, flowers, even GST.

 

If you prepay these costs, you’ll be paying for a service you will use tomorrow in today’s dollars.

 

After you decide on the services, casket, vault/urn and disbursements you wish to pay for, you write a cheque to the funeral service provider for the total including taxes.

 

The funeral service provider will recommend you prepay all items they or you are able to in advance. Cemetery plots can be arranged by a funeral director but your cheque must be made payable to the cemetery owner. Example: “Municipality of Clarington,” which owns Bowmanville and Bond Head Cemeteries. Cremation charges may be prepaid and a certificate issued (similar to a cemetery deed) by the crematorium to be held by the client or funeral director indicating that these services have been paid for and will be rendered when required.

 

The balance of the funds are placed in a third party trust or investment in your name under the funeral service provider. These funds are not dispersed to the funeral service provider until the death has occurred and funeral arrangements have been carried out.

 

The investment or trust may be cancelled by the purchaser or legal representative at any time, with all principal and accrued interest, or may be transferred to another funeral provider under certain provincial regulations.

 

It is important to find out whether the funeral provider has a guarantee on prepaid funds. The Funeral Directors and Establishments Act allows for guaranteed and non- guaranteed services. Not all funeral service providers offer the same guarantees.

 

Under the new Funeral Directors and Establishments Act (June 1990) which controls prepaid funerals – if the prepaid fund, with accumulated interest, has more money in it than the funeral service provider’s cost at the time of the funeral, the surplus is returned to your estate with a T-5. The accumulating interest in the trust is non-taxable unless the trust is cancelled or excess monies are returned. The excess may also be used to pay disbursements if they were not paid with the initial prepayment. Proper documentation and accounting must accompany this type of distribution of the trust.

 

Prepayments prior to June 1990 come under a different act and are “grandfathered” to protect the consumer. Example, GST is not applicable. On a guaranteed prepaid funeral, if the fund does not have enough money in it to meet the cost at the time of your death, the shortfall is assumed by the funeral provider. When guaranteed, and as long as you do not change these arrangements, the funeral provider should guarantee that the funds on deposit, plus accumulated ‘interest, will provide these services when required.

 

In Ontario, licensed funeral providers must place 100% of your money in a financial institution, insurance, or fraternal society approved by the Act to administer your prepaid funds. The funeral provider must invest this money to generate a level of interest at least equal to the interest paid on Canada Savings Bonds in any given year.

 

Funeral service costs, like any other services, are subject to inflation. As a rule, the increase in funeral costs is somewhat less than the annual rate of inflation. Cemetery costs are normally based on the price of replacing the land for the grave they sell you at the time. In that sense, cemeteries are like any other piece of real estate – the higher the land cost the more the plots will cost. The cost of opening and closing a grave for burial of a casket or cremated remains is based on costs at the time of need.

 

A note of caution: Make sure you inform your family of your plans before or after preplanning your funeral. In particular, tell them what you plan to do and why you’ve done it. If no one in your family has ever been cremated – and this is what you plan to do – it can be quite a shock for your family if they don’t know in advance. Always keep in mind that your funeral is about you, for your family and friends.

 

Cremation is an alternative to earth burial following the funeral. It has become popular in recent years due to the cost of cemetery plots or because clients prefer to be interred in the family plot that is full with casket burials. Cremated remains can still be interred at these plots in most situations.

 

Cremation is perceived to be less expensive, but check with your local funeral provider. The cost of cemetery lots and cremation in Toronto is not necessarily the same in Clarington.