The cash that is freed up from your home in the equity release process can be used for whatever means you choose, as long as all secured debt is cleared. An adviser will discuss with you your current financial situation and your plans for the future. One of the expenses you might want to consider is your funeral.
Having a prepaid funeral plan is becoming more popular as the cost of funerals rises. Organising it and paying for your funeral in advance means you’re paying today’s price. It has other advantages too. It means you can research the options yourself and choose the service you want. You will have time to research the most affordable option for you and many providers will allow you to spread out your costs and pay in monthly instalments.
A prepaid funeral also eases the burden on family members to organise and perhaps pay for it, at what is a difficult and emotional time. The cost of a funeral can come as a shock to family members if they haven’t planned one before. If you have a prepaid funeral plan, it would just take one phone call for your family to set the plans in motion after your death.
A prepaid funeral will cover the funeral directors costs but it won’t cover a wake or food or drinks. If you choose a burial rather than cremation you will also need to speak to your local authority to discuss the costs involved.
This may all seem quite macabre but everyone will need a funeral one day. Planning it and paying for it using some of your equity release cash will give you peace of mind and allow you to concentrate on the other important things in life.
If you’re thinking about life in the weeks and years after your funeral you may also want to discuss how you can leave an inheritance for your loved ones with your adviser.
You might want to leave lump sums to grandchildren or to put money in trust or ISAs for them.
Other people might prefer to give their loved ones the money now so they can avoid paying inheritance tax which is 40% if your estate is worth more than £325,000.
The key consideration is that, if you die within seven years of giving the gift, your relatives will have to pay tax on it. You should speak to specialists about inheritance tax when you are considering equity release.
:: Use our Equity Release Calculator to work out how much cash you could release.
It is important to take expert advice on equity release before deciding whether it is right for you. Contact us to find out more from one of our highly trained advisors.
