Last wills, charitable giving, and preneed

September 18, 2024/Cemetery, Preneed/

Central Co-op of Great Britain is an interesting company. They are a company with a history of over 100 years and operate in the grocery, legal services, floral, and funeral business. According to this Wikipedia page, the company operates over 1,000 funeral homes and is now the largest provider of Death Care services in the United Kingdom doing approximately a 16.5% market share of “at need” services in the country.

In comparison, in the United States it is estimated that Service Corporation International, North America’s largest Death Care operator conducts about 12% of United States deaths annually. That’s about 1 out of every 8 deaths whereas Co-op Funeralcare conducts about 1 out of every 6 deaths in the UK.

Central Co-op, by being active in different businesses is in a unique position to tell us some things about trends in that country. . . trends, that in my way of thinking, may also relate to North America. I regularly read articles from Funeral Service Times, a British death care publication, and just last week read a couple that started my mind working in “Big Picture” thought processes.

The first article came through the legal services division of Central Co-op and indicated that including provisions for charitable giving by individuals in last wills and testaments increased by 40% in 2023. And, the amount of these gifts increased by Central Co-op legal clients to $89.8 million in U.S. dollar amounts. That comes to a 27% yearly increase in the amount of charitable gifts that will eventually be distributed to beneficiaries.

Then in another article from the same publication I noticed that Co-op Legal Services is using the funeral branch of their company, Co-op Funeralcare, to help consumers “understand the importance of later-life planning“. In essence, Co-op Funeralcare branches will be promoting the will writing, and estate planning services through the the end of September.

In my opinion, this is a great leverage of “cross-selling” for the larger overall company. And, while not even mentioning it in the promotion. . . it is pretty apparent that if a person is interested in a will then they should certainly be reminded of the value of pre-planning their own funeral during that time by either the funeral provider or the legal services provider. . . .which may lead to that “cross-sold” pre-need sale.

So, I would not be surprised if this promotion drives up the number of legal service clients and at the same time it may very easily drive up the number of pre-arrangements for Co-op Funeralcare.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take: So, here’s where my “Big Picture” thinking comes into play. More charitable giving considerations and more charitable giving monetary amounts indicate to me that the people doing this planning have more assets than ordinary. I think that is a pretty simple assumption.

And, if that is the case in Great Britain it is probably also the case in North America. In my way of thinking, because of that fact, if large churches, colleges, health care concerns, and other philanthropic organizations are not actively working on charitable planning with their older members, alumni, patients, and the like, then they are really missing an opportunity.

But. . . .what about funeral homes or cemeteries. Well, I think large cemeteries should be in that same boat with some type of way to talk to lot owners or families of those already deceased in the cemetery about philanthropic ways that they could beautify or build revenue generating memorial features, such as columbaria or mausoleums, for the future benefit of the cemetery.

One thought that I have with private funeral homes. . . . . Why not, where legal and transferable, mention to those who are in their senior years and pre-arranging their funerals, to think about putting aside an amount of money in prepaid accounts for other loved ones, such as children and spouses?

Let’s just say a “Guaranteed Issue” product for a 45-year old costs a one-time premium of $9000 for $10,000 worth of Face Value coverage that grows at 2.5% annually. If those people died at age 75, there should be about $21,000 worth of value for each available at the time of death. So, over time, that $36,000 investment (4 policies x $9k each) by these parents could potentially produce $84,000 (4 policies at $21k death benefit 30 years later) of benefit to their children and spouses.

And, unlike other possible investments, it is a certainty that Death Care services will eventually be needed. An opposing argument could be made that a 2.5% annual return for 30 years is pretty poor in relation to some other types of investments that these parents could make. . . . . . . However, a parental argument to that is that the money would be eventually spent on what it was meant for and not pulled out of an account for, what parents may consider, frivilous purposes.

Is it feasible that a couple making estate plans with two children would put away $36,000 extra at the time they are pre-planning their own funerals at age 75 for the two children and spouses who would be about 45 years of age? Although non-tax deductible and despite a potential relative poor return, I think that there are many parents who have substantial assets who would do that for their children. . . .If so, it is an opportunity for a preneed advisor to turn 2 pre-arrangements into six pre-arrangements.

It’s probably true that those pre-arrangements for the 45-year olds would be transferred to another firm in another locality before they are exercised. However, the initiating funeral home or preneed agency would receive the initial commission compensation on them today. I once owned and operated a preneed agency so I know that commissions are the life-blood of operations in the current time period. Maybe your agency and agents could use this extra commission today.

It’s just a thought I have. . . . I’m not 75 years of age yet, but I am a parent of two children who are building their way in life. My wife and I are proud of their work ethic and making their way in their respective careers without our financial help, but we are also always interested in helping them out in ways that are practical. . . . .preneed accounts for them might be something we would consider.

For What it’s Worth: Writing this article brought back memories to me of how one is always learning through things that they do. For instance, I learned of the incredible value to a business of “cross-selling” when I served on a Wells Fargo Board during the term of Wells Fargo CEO Richard Kovacevich. It was during his tenure that “cross-selling” in banking became a big thing. . . and, I’ve used his philosophy to turn “cross-selling” into a fixture of whatever business that I’ve ever been involved in — it just makes sense. . . because you have a trusted customer for a specific need, they will generally trust you for another need before going to a stranger to do business with them. . . . . I would suggest to look for “cross-selling” opportunities wherever possible.

I’ve also had the opportunity to chair the board of Senior Living and Health Care company Knute Nelson and serve on the Board of Regents for the University of Minnesota and also the University of Minnesota Foundation. In those situations I’ve witnessed first-hand what an active philanthropic arm of the organization can do for positive growth of the organization. If I was operating a cemetery the first thing I would implement would be a non-profit philanthropic division in order to be able to receive donations from people who feel that your mission is critical to your community. . . . You might be surprised by those that do believe that and the amounts of money that they may have available for possible uses.

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