Transcript of Pre-planning a funeral Pre-planning a Funeral Your Options?
- Slide 1
- Pre-planning a funeral Pre-planning a Funeral Your
Options?
- Slide 2
- Pre-planning a funeral Pre-planning a Funeral Your Options?
Greg Bird Dip FP National Manager Business Development Lifeplan
Funds Management
- Slide 3
- Pre-planning a funeral Many important decisions in life
Travel.Marriage...House KidsLife Insurance.Will Pre-planning a
funeral - stigma My folks Most important thing is to document your
wishes Youre not alone in your thinking! Nearly 1,000,000
Australians > age 55 have pre-planned Introduction
- Slide 4
- Pre-planning a funeral When my husband died I was left with a
huge cost to bury him....I dont want that situation to occur to my
family To give my son a little help with dealing with the cost of a
funeral My Mother is suffering from dementia and I did not want the
trauma of organising a funeral at the time of her passing So I get
a decent send-off Market Research Some Comments
- Slide 5
- Pre-planning a funeral Who hasnt seen the adverts? For just a
cuppa coffee a day! Confused about pre-planning?
- Slide 6
- Pre-planning a funeral Five main options to consider with
pre-planning a funeral: Simply set aside money in a bank Enter into
a life insurance contract Pre-arrange your funeral Take out a
Funeral Bond Enter into a Pre-paid Funeral contract Options?
- Slide 7
- Pre-planning a funeral Advantages Shows you are thinking ahead
Reducing others financial hardship Option 1 - Money in a bank
account Disadvantages Not the wisest use of your money - subject to
income tax Deemed an asset and may affect your pension entitlements
Doesnt ensure sufficient funds Does not ensure funds will be used
for the correct purpose! Does not ensure your funeral wishes will
be carried out
- Slide 8
- Pre-planning a funeral Advantages Seems very cheap! Automatic
cover Option 2 - Life insurance contract Disadvantages Compulsory
payments to age 90 or more Fail to make one monthly payment -
contract cancelled No redemption value No pension advantages Does
not cater for emotional decisions/issues Limited cover in 1st year
- accident only Benefits generally non-assignable Doesnt guarantee
money used for funeral!
- Slide 9
- Pre-planning a funeral Option 3 Pre-arrangement No money
involved At the very least document your wishes Answer some of the
50 questions Nominate your funeral director? Burial or cremation?
Type of service? Coffin or casket? Readings? Music? Complete a
personal profile booklet
- Slide 10
- Pre-planning a funeral Option 4 - A Funeral Bond Advantages
Capital guaranteed; not assessed by Centrelink Secure investment in
your name Financial advantages tax effective & pension benefits
Invest up to $12,000 to cover funeral expenses Can nominate
preferred funeral director Disadvantages: Hoping that investment
returns keep pace with price rises Investment must be used for
funeral expenses Family still has to go through all the anguish of
organising funeral
- Slide 11
- Pre-planning a funeral Option 5 - Pre-paid Funeral Plan What is
a pre-paid funeral plan? Contract between yourself and your chosen
funeral director for future funeral service Formally records the
exact details of service all questions answered Not deemed an
investment so pension advantages Service costs fixed and guaranteed
at todays prices Investment held at arms length from funeral firm
Pre-paid funerals governed by specific SA legislation Money
available should funeral director sell
- Slide 12
- Pre-planning a funeral
- Slide 13
- Education Funding Investing in a childs education is an
investment in their future What are your options?
- Slide 14
- In the media
- Slide 15
- Were just popping out to get your tuition fees
- Slide 16
- The cost
- Slide 17
- Slide 18
- Concerns Children later in life Mortgage Swamped with bills
Employment stability Expensive schooling years coinciding with peak
retirement saving years
- Slide 19
- Pitfalls for younger investors Tax changes for most children
mean anybody investing for their children or grandchildren may need
to consider new strategies. Until 2011, a minor (child aged less
than 18 years) could effectively earn investment income of $3,333 a
year tax-free which was equivalent to about $95,000 invested
earning 3.5% pa. But from 1 July 2011, this tax free threshold was
reduced to $416 as minors will no longer be eligible to claim the
Low Income Tax Offset (LITO) which had helped reduce tax by up to
$1,500 per annum. This represents a reduction in funds that can be
invested in the name of children - from $95,000 to around $11,000 -
assuming an annual earning rate of 3.5%.
- Slide 20
- What is the solution? Repay debt Invest ~Child~ Invest ~Parent~
Family Trust Super Scholarship Plan
- Slide 21
- What to look for in an Education Fund Are they structured under
Scholarship Plan provisions Income Tax Assessment Act 1997? Who can
invest? Is there investment portfolio choice? Is there an age
restriction on the student? Are separate plans needed for different
stages of education? Are there contribution restrictions or regular
commitments? Who decides when to receive payments the investor or
the provider? Can the investment be accessed for non education
expenses?
- Slide 22
- Investment Bonds & Scholarship Plans
- Slide 23
- What are the advantages? Special tax advantages Tax free
withdrawal of investor contributions Utilise student tax threshold
- withdrawals of investment returns/education tax benefit is income
of the student Withdrawals within tax free limits Contributions at
any time Lump sums Regular savings Estate planning features
Bankruptcy protection
- Slide 24
- Estate Planning features Plan Guardian Looks after plan if
investor dies or becomes intellectually disabled Administers
investment in the best interests of the student Limited capacity to
amend investment arrangements Independent of Power of Attorney and
Will Nominated Beneficiary Receives investment proceeds should
student die after the investors death Tax free proceeds Avoid
delays in Probate
- Slide 25
- LEIF - What can be claimed? Tuition fees Primary/secondary
TAFE/tertiary Special needs Adult learning HELP fees Uniforms Books
and materials Music lessons; Swimming lessons and sports equipment
Internet expenses School outings and camps Overseas courses Travel
to and from campus Living away from home allowance
- Slide 26
- How does the Tax work? Investor Contributions Access any time
for any purpose with no tax consequences. Investor Earnings
Earnings are taxed at the Corporate rate (up to 30%) & paid by
Lifeplan. If funds in this account are used for Education Expenses
Lifeplan claims back the 30% tax paid from the ATO and this becomes
part of available funds to spend on education If funds are not used
for Education or withdrawn by investor Investment Bond rules apply.
30% tax offset applies. If Student $416 is declared assessable
income. If Student >18 (2014-15) Normal adult tax free threshold
applies The tax liability is passed to the student. Lifeplans
Easyclaim facility makes this allocation easy.
- Slide 27
- Withdrawals
- Slide 28
- Slide 29
- But wait; theres more
- Slide 30
- Slide 31
- Pre-planning a funeral Pre-planning a Funeral Your
Options?