Public Trust prepaid funeral trusts in NZ

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Updated 2026-10-20 · Reviewed quarterly, when the underlying data is restated.

Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name.

Public Trust's Prepaid Funeral Trust is a fund you pay into so that money is set aside for your funeral. It is not insurance: you pay in your own money, interest is added to it, and any amount left after the funeral goes to your estate. Public Trust's July 2026 price list shows a $285 set-up fee, a $137 closure fee and no ongoing fees (Public Trust: Prepaid Funeral Trust price list).

Public Trust is a trustee company, not a funeral director. It holds the money and, when the time comes, receives the funeral invoices and arranges payment (Public Trust: brochure). The money is held in Public Trust's Funeral Trust Cash Fund, which is a portfolio investment entity (PIE) managed fund invested in its Common Fund. This differs from a prepaid funeral arranged directly with a funeral home. Consumer NZ notes that trusts run by trustee companies usually charge administration fees and that the money is not tied to one funeral provider (Consumer NZ). The fees, deposit rules, interest, tax and guarantee below come from Public Trust's own documents, retrieved 20 October 2026. Fees and terms can change, so confirm them before you apply.

What it costs

Fees are as at 6 July 2026 and include GST.

Fee	Amount	When it applies
Standard set-up fee	$285	Once, when the trust is opened
Set-up fee with a Public Trust Will and enduring powers of attorney (property, and personal care and welfare)	$216	Once, if you hold all three with Public Trust
Closure fee	$137	Deducted from the trust before the fund is closed
Withdrawal fee	$137	Withdrawal due to permanent emigration, or transfer to another provider
Ongoing management fees	None	The price list says there are none

The application form says the closure fee is charged at the rate on the date the trust is closed, and that Public Trust may change the trust's fees at any time. The brochure says interest earned is added "after taxes and charges", but none of the documents we read itemises charges inside the fund. The trust deed attached to the application form also lets the trustee reimburse itself from your funds for expenses it incurs in administering the trust, so ask Public Trust what that has meant in practice.

What you pay in

The application form sets a minimum initial contribution of $500, excluding the set-up fee. Regular contributions by direct debit start at $50 a fortnight, or $100 every four weeks, every month or every three months. The brochure adds that you or anyone else can make one-off payments of at least $100, and that if contributions stop the balance remains available for funeral expenses. We found no maximum in these documents, though the $10,000 exemption below is a limit for Work and Income tests, not a limit on what you can deposit.

How interest and tax work

Money in the fund earns interest, which is added to your balance. Public Trust says a tax rate of 28% is paid on the interest from PIE funds and that personal tax rates do not apply (Public Trust: brochure). No interest rate is published in the documents we read, so we cannot say what the fund earns, and rates change. An annual statement is sent.

The government guarantee Public Trust describes

The price list states that capital and interest in the Common Fund are guaranteed by the New Zealand Government. It cites section 52 of the Public Trust Act 2001 for the capital guarantee and section 65ZD of the Public Finance Act 1989 for the interest guarantee, and says neither is time limited. We have quoted Public Trust's description and not tested it against the legislation, so read the price list's footnote for yourself. Public Trust's web page describes the fund as under a government guarantee.

Getting the money out

The price list says money can be accessed only for funeral expenses, except in exceptional circumstances. Any money remaining is paid to the estate. Consumer NZ's wider warning applies: money in a funeral trust may not be withdrawable unless you are in significant financial hardship. If you think you might need the money for something else, a prepaid trust is the wrong place for it.

A worked example

Take a round figure: you deposit $10,000 and later the fund is closed with no interest, to keep the arithmetic plain. With the standard set-up fee you pay $10,285 in total and $137 is deducted at closure, leaving $9,863 for the funeral. Fees of $422 are 4.2% of the deposit. With the discounted set-up fee they total $353, or 3.5%. This is our arithmetic from the published fees, not a quote, and interest after tax would offset some of it over time. It shows why a small balance is the poorer fit: on a $500 deposit the same fees would be about 84% of the deposit (71% with the discounted set-up fee).

What it does to Work and Income tests

Residential care subsidy. Public Trust says up to $10,000 per person is currently exempt from asset testing for the subsidy. Work and Income's wording is "pre-paid funeral expenses for you and your partner of up to $10,000 each, if they're held in a recognised funeral plan" (Work and Income: Residential Care Subsidy, updated 4 August 2026). The Funeral Directors Association of New Zealand says the $10,000 level dates from 1994 and has not changed (FDANZ, 2026 report). It is a Work and Income policy setting, and Public Trust itself says "currently". We could not source a statute section for it, so we do not cite one.
Funeral Grant. A prepaid funeral account is counted as a cash asset when Work and Income assesses the grant, so prepaying can reduce it (Work and Income: definition of assets). See the Funeral Grant guide.

How it compares

A trust run through funeral directors, Now For Them, says it is "not a savings or investment product", pays no interest or return and has no fees, with a promise to say if that changes (FDANZ: Now For Them). Public Trust charges fees and pays interest. Which is better depends on your balance, how long you will hold it and whether you want to name a funeral home now. We do not rank them. For provider failure and what protects prepaid money, see what happens if a prepaid provider fails. For the wider choice, see prepaid funerals versus funeral insurance.

How to set one up

Decide your wishes first. Our preplanning guide has a checklist.
Complete Public Trust's application form, available on its Prepaid Funeral Trust page, or contact Public Trust or book an appointment.
Provide an initial contribution of at least $500 plus the set-up fee, and set up any regular direct debit.
Keep the paperwork with your will. Public Trust recommends recording funeral details in your will.

Planning ahead with funeral insurance

A trust gives back your own money; insurance makes a different kind of promise. Momentum Life's Funeral Insurance, issued by Momentum Life Limited, takes applicants aged 40 to 75 without health questions and pays a fixed benefit of $3,000 to $30,000 towards costs, not the whole funeral. During the first 24 months it pays only when death follows an accident (within 90 days of it); any other death in that window pays no benefit and the premiums are refunded. Over the years, total premiums can end up larger than the benefit. Saving the money yourself is the other route. A.M. Best rates Momentum Life B (Fair); see its financial strength page. The buttons on this page open Momentum Life's online application. QuoteHub is a Momentum Life partner and Smiths Insurance & KiwiSaver may receive a commission if you buy a Momentum policy (how we are paid). Advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). See the funeral insurance hub and our guide to probate for what happens to leftover money.

If you are planning ahead for your own funeral costs

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Life cover See your price Ages 18–65 · $50k–$300k Funeral cover See your price Ages 40–75 · $3k–$30k

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Life cover: Conditions you already have aren't covered for the first 2 years (premiums refunded instead). Suicide isn't covered for the first 2 years, and a few conditions can be excluded permanently.

Funeral cover: Only accidental death is covered for the first 2 years. Total premiums can add up to more than the cover, and it may not meet the whole cost of a funeral.

Insurer: Momentum Life Limited. Financial strength rating B (Fair) from AM Best, affirmed 11 February 2026; B ratings sit in AM Best's 'vulnerable' range. The rating scale is available for inspection at every Momentum Life office in New Zealand. What this means

Already have cover? Keep it. New cover won't pay for a condition you already have in its first 2 years.

Opens Momentum Life's online application; its guidance only covers eligibility. QuoteHub is a Momentum Life partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.

Adviser's view

It is a fee-charging savings vehicle, not insurance. On a $10,000 deposit the published set-up and closure fees take about 3.5% to 4.2% before interest, so the trade-off is certainty and a care-subsidy exemption against a small cost. Money is hard to reach for anything else, and it counts as an asset for the Funeral Grant.

Henry Smith, Financial Adviser (FSP1010699). General information, not personalised financial advice.

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Cite this page QuoteHub NZ (2026). Public Trust Prepaid Funeral NZ: Fees and Rules. www.quotehub.co.nz/guides/when-someone-dies/public-trust-prepaid-funeral-nz. Updated 2026-10-20.

References

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