What is a Funeral Bond?
When prepaying for your funeral, the most common way to formalise this is by setting up a Funeral Bond . A Funeral Bond is a type of "investment" that allows you to allocate funds specifically for funeral expenses, with the money only being accessible after your passing . You have the option to pay a lump sum or make regular contributions, and the funds accrue interest, but they cannot be withdrawn early for other uses. These bonds provide tax-effective savings and can be excluded from government income and assets tests up to $15,750, offering a way to plan for funeral costs without financially burdening your loved ones. A regular Funeral Bond is simply money that is set aside and accrues a little interest over time. This money then contributes to covering some of the costs involved in a funeral when the time comes. However a "prepaid Funeral Bond" sets a fixed amount aside which - in conjunction with a fixed-price contract - will cover the costs of the agreed s...