Retaining monies received in advance could be illegal
Staff at Golden Charter funeral plans have been surprised to discover just how many funeral directors were unaware that they could be breaking the law by retaining money received in advance for funerals.
A story, which appeared in SAIFInsight members’ magazine in May this year, highlighted a 2002 legal change that means cash received in advance for funerals has to be kept separately, but national sales manager Richard Auchincloss said it had come as a surprise to a significant number of funeral directors.
“During discussions with several funeral directors in recent months, we discovered many were unaware that they could be breaking the law,” he said. “They hadn’t realised the law now states that this money taken in advance comes under strict rules imposed by the Funeral Planning Authority.”
“We were surprised to find how many funeral directors have had instructions and payment from families over the years. A number contacted us once they realised these potential implications, eager to relieve themselves of this liability by transferring the plans to a secure Trust and, at the same time, taking advantage of the benefits and growth opportunities the Trust can offer.”
Richard stressed that:
• The law does not cover old plans prior to 2002, but it does cover all cash collected by funeral directors since January of that year.
• A funeral director cannot retain any cash received from clients in a ‘Not yet dead’ file. Funeral directors who have done this, or are doing this, are acting illegally and could be reported to the Financial Services Authority.
• If a funeral director is in this situation, Golden Charter and other plan providers can help to protect them. Without cost to them, and in strict confidence, they will take over any funds the funeral director is holding for clients, and create a new – and legal – funeral plan for each. The funds will be placed in a secure Trust and will grow monthly and the money will be repaid – with that growth – at the time of need.
For further details and advice, contact a local Golden Charter RSM, or other funeral plan provider, or call Richard on (0141) 931 6325.
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