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Pre-paying your funeral relieves your grieving loved ones from the burden of making the various decisions and choices that are required when someone dies.

In most provinces, there are two ways to pay for pre-paid funeral services. You can buy an insurance policy that includes pre-paid funeral arrangements, in which case the money will be paid to the insurance company. You will still have to negotiate with a funeral home on details. Or, you can purchase pre-paid funeral arrangements directly from the funeral home. When you give the money to the funeral home, it must then deposit the money into a trust account (held by a financial institution such as a bank or trust company), where it will earn interest until the contract is fulfilled or cancelled.

Even if you don't have the money to pre-pay, you can still pre-arrange your funeral with a funeral home. While your survivors will still have to negotiate costs, at least they know your wishes. If you are considering pre-paying your funeral be sure to ask these questions:

• Does the funeral establishment have a good reputation? Is the funeral home likely to be in business for many more years?
• Will interest be paid on the money in your pre-arranged plan? Will you or your estate receive the interest, or will the funeral home?
• Can you pay by installments or do they want a lump sum up front?
• Are all goods and services described in detail in the contract?

Discuss pre-paid funerals with your financial advisor when you are talking to him or her about your estate planning needs.

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