What happens if my Funeral Director goes out of business?
“I took out 2 Avalon funeral plans one for me and one for my mam on the 24/5/2016 and 26/5/2016. we paid in full and they said our funerals would be done by Hart funeral directors at Stockton-on-Tees County Durham i noticed that the Heart Funeral company wasnt there anymore and I dont know who will do our funerals now getting a bit worried about this now can you help please?”
Protection where a funeral director or funeral plan company goes out of business:
As far as we can see, Hart Funeral Directors are still around, but that is not the point.
With normal funeral plans there is no direct connection between the funeral director and the funeral plan company (even though it seems there is.) Unless they are acting illegally, the prepaid amount, after expenses, goes into a compeltely separate fund. This fund is either an Independently managed Trust Fund or a special fund managed by an independent Insurance Company. In both cases there are strict controls over how the money is managed. Just occasionally a small local firm may not understand the rules and set up a fund which does not comply with the law, but it is extremely rare in the UK, and one of th reasons we are cautious before rcommending new funeral plan providers.
So what happens to protect funeral plan owners.
- If the funeral director goes out of business, the funeral plan company simply appoints another firm to do the job.
- If the funeral plan company goes out of business, most trust funds / insurance funds would simply appoint a funeral director to carry out the funeral – quite possibly the same one. Alternatively, they would arrange to transfer that responsibility to another funeral plan company. The only rather peculiar exception to this is the Co-op who would give the money back to you, less expenses thus totally destroying the whole purpose of the funeral plan. That is why we can’t recommend Co-op funeral plans. The Co-op is a wide movement so it must be said that some may not have this (in our opinion) unethical clause in their contracts, but please do read their terms of business extremely carefully before taking out a Co-op plan.