Pre-paid funeral expenses

A pre-paid funeral trust fund or account is money put aside (usually in a trust) exclusively for the payment of funeral expenses.

If the money can be accessed by the client and used for other purposes, it is not considered exclusively for funeral expenses and can be treated as a cash asset.

It is usually clear whether a trust fund or account has been genuinely set aside for funeral expenses. Evidence it has been set aside exclusively for funeral expenses include:

• the trust fund/account is only paid out on production of a death certificate
• the client cannot usually access the funds
• if a client can access the fund, there are limited conditions on withdrawal, such as re-locating overseas
• the trust fund/account is only payable to the funeral director or administrator of the client's estate
• the client cannot generally access the interest earned from the trust fund or account

When the trust fund or account has been set aside for funeral expenses and cannot be accessed or converted into cash, this money is not a realisable asset.