TOWER Funeral Trust summary sheet

Tuesday, June 13th 2000, 9:52PM

What is a Funeral Trust?	A Funeral Trust is an investment designed to cover the cost of your funeral expenses.
How does a Funeral Trust work?	TOWER Trust has set up a New Zealand wide scheme entitled "TOWER Funeral Trust". Any person by completing an application form can set up a personal Funeral Trust. Once the funds are deposited they cannot be withdrawn until the person passes away. There is no maximum to what you hold in your Funeral Trust, although asset testing may apply to amounts over $10,000. The minimum initial investment is $2,000 and you can continue to add to it in $2,000 amounts.
Asset test exemption	Income and asset testing for long-stay public and private hospital care and rest home subsidies still applies. However, Work and Income New Zealand’s policy is that it will not count pre-paid funeral expenses of up to $10,000 as ‘assets’ for the purpose of asset testing.
How will the funds be invested?	All personal Funeral Trusts will be invested in the TOWER Managed Funds MortgagePlus Fund. The MortgagePlus Fund invests in carefully selected first mortgages and the objective is to provide over the medium term, returns that are superior to bank deposits. Interest after deduction of tax will be added to the investment and compounded quarterly.
Who will receive the funds from the Funeral Trust?	Payment will be made either directly to the funeral director, or to the person who produces evidence that he or she has paid the account. The balance of funds, if any, will be forwarded to the person administering the estate for distribution to the applicant’s beneficiaries.
Does this affect my tax return?	No. Because the investment is owned by the Trust, any tax on the interest earned from the MortgagePlus Fund is paid by the Trust. TOWER Trust will take care of the tax returns for the Funeral Trusts.
What much will a Funeral Trust cost?	To establish a Funeral Trust there is a once-only fee of $150. There are no fees to operate it and no fee charged when it is paid out. (TOWER Trust’s ongoing costs in maintaining the Funeral Trusts are covered by a portion of the MortgagePlus Fund’s standard management fee)
How to set up a Funeral Trust?	ITS SIMPLE. Fill in the TOWER Funeral Trust application form, enclose a cheque, seal, and forward by Freepost.
Sundry Information	Regular correspondence (at least quarterly) would be forwarded to applicants showing the current balance of their personal Funeral Trust. Joint applications cannot be made. If a couple set up a Funeral Trust each then a discount on the entry would be considered. Acceptance in writing from TOWER Trust will be made within 72 hours of receipt. All enquiries in relation to the TOWER Funeral Trust should referred to the E-Commerce Call Centre (0800 869 378).