Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


New Pre-Paid Service Reduces Estate Administration

News Release 26 June 2002

New Pre-Paid Service Reduces Estate Administration Costs And Protects Your Assets


Public Trust has developed a new pre-paid service designed to help people save money on the costs of administering their estate and the costs associated with their funeral.

Public Trust Chief Executive Tim Sole said that the new service combines the benefits of pre-paid estate administration with a funeral trust, and provides a discount for buying the two together.

Pre-paid estate administration, which is a service unique to Public Trust, gives substantial savings in estate fees. These savings can be as much as 35%, and up to $10,000 invested in each funeral trust is exempt from asset testing when Work and Income New Zealand applies its test for a residential care subsidy.

“A funeral trust, as well as ensuring you have the funeral you’d like, protects your estate by preventing your savings being eroded by the cost of residential care.”

The combined service is available through Public Trust’s 36 customer centres and members of the Funeral Directors Association of New Zealand.

Mr Sole said that the combined pre-paid service is proving popular, and those who are buying it are saying it gives them control over their own affairs, provides security for their families and is available at a very good price.

“By pre-paying, they know that they have taken care of their estate administration and funeral costs, and their family will not be left with a burden. The new combined pre-paid service also gives them a further discount on top of Public Trust’s significantly reduced estate administration fees,” he said.

Pre-paid estate administration is one of the new services that Public Trust introduced when the law was changed on March 1, allowing the company to significantly reduce its fees and change the way it does business.

People can start a funeral trust with $3,000 and can choose to add money later through regular payments, occasional lump sums, and contributions from other people.

The money is invested in a low risk investment account, and Public Trust issues statements every three months.

There is a one-off fee of $150 when establishing a funeral trust, which is reduced to $100 if the customer pre-pays their estate administration at the same time. There is also an annual management fee of 1.575% (including GST) of the trust’s value.

Before the law change Public Trust’s estate administration charges were tied to a scale commission based on an estate’s value – 3% for the first $100,000, plus 2% for the next $200,000 and an additional 1% over $300,000. GST was additional.

Now that Public Trust can set its own fees, it has significantly reduced its charges and offers even further savings if they are pre-paid.

Public Trust’s new fees, when they are not pre-paid, are an administration fee of $1,322 and a 1.125% handling fee on each asset in the estate, with a maximum of $562.50 for each individual asset. All fees include GST. The following table gives an example of the new charges when they are not pre-paid.

Assets New charges, from 1 March 2002 Previous charges
$1,322 set fee
House $150,000 $ 562.50 handling fee 3% on $100,000 ($3,375 inc GST)
Car $ 15,000 $ 168.75 handling fee 2% on $85,000 ($1,912.50 inc GST)
Bank account $ 20,000 $ 225 handling fee
Totals $2,278.25 inc GST $5,287.50 inc GST
Saving $3,009.25

For pre-paid estate administration there is a flat fee of only $1,575 including GST. For this, Public Trust will cover the costs of administering an estate, including the handling fees on assets up to $100,000. The value of an estate is worked out by capping the value of any one asset to $50,000. For example, a home worth $150,000 would count as only $50,000 when working out fees.

For estates worth more than $100,000, the fee is $1,575, and on death an additional charge of $562.50 including GST and a 1.125% handling fee on the value of assets over $100,000. With the value of any one asset capped at $50,000, the maximum handling fee on any one asset cannot be more than $562.50.

The following example illustrates the savings that can be made with Public Trust’s pre-paid estate administration.

Assets Real value Public Trust’s value
House $150,000 $50,000 (capped)
Car $15,000 $15,000
Other assets $20,000 $20,000
Total $185,000 $85,000

Pre-paid fee on assets up to $100,000 $1,575 (inc GST)
Public Trust’s fees if not pre-paid $2,278.25 (inc GST)
Saving on current fees, by pre-paying $ 703.25
Total saving on previous fees $ 3,712.50

“By using the new combined service to pre-pay their estate administration and to establish a funeral trust, people can make savings on the costs that would otherwise be met by their estate, as well as protecting their assets from being eroded,” Mr Sole said.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>

ALSO:

Results:

Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news