You can preplan your final arrangements without prepaying.
Most service providers will keep a record of your plans without cost.
If you decide to prepay, you will be asked to sign a contract.
There are two ways to prepay:
– you can pay your service provider and have the money held “in trust” by a bank, trust company or independent trustee (it will earn income over the years until it is needed, which will be used to offset any increase in the cost for your arrangements)
– you can buy insurance from an insurance company (your service provider may have an insurance program in place)
To make sure your money is held safely:
– your service provider must give you a contract that states the total amount of money you have paid and the terms of payment for any balance you owe
– if you prepay with a licensed funeral establishments or transfer service, your money is protected by the Prepaid Funeral Services Compensation Fund administered by the Bereavement Authority of Ontario (this fund is used to reimburse consumers if, in rare cases, their prepaid money is not available when it is needed)
– if you place money in trust for prepaid services or supplies, your service provider is required by law to only have it in very safe investments (you are entitled to ask your service provider once each year where and how the money is invested and how much money you have in your trust account)
– if you buy an insurance policy to fund a contract and pay the insurance company directly, your money is protected under the Insurance Act
– Compliance inspections from time-to-time are conducted by the BAO to make sure that service providers comply with the law