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Do you have a question about this? Thank you.
I can understand you wanting security for your clients but what exactly is your concern and what are you talking about when you ask and you use a property owned by you personally?
Why don’t you simply put the money on deposit in a trust account (which keeps it safe from creditors) and then draw it down on each death?
I see what you are doing and the ultimate reason (the funeral payment) is actually not relevant with regard to the legalities of the scheme. What you are doing is getting people together to invest in a property which hopefully, is going to be future proof, by virtue of rising property prices.
Because it is investment related you would need to be registered with the FCA. The property would be held in trust for the benefit of the scheme members. The company that is running the funerals would be paid by the trustees.
The potential problem here is that there may not be liquid cash to pay for the funeral when it’s required if the fund is fully invested.
I am glad to help. By having the property owned by a trust, it keeps it separate from the company that is doing the funerals and hence, if the funeral company goes bust, the property is still there for the benefit of the scheme members.
It is the liquidity which is problematical.
You could have the fund, for example, 75% invested and leave the balance in a trust account but it still problematical if there is a spate of panic dying and more than 25% of the unit holders all need funerals at the same time.
You may get to the stage where there are enough new ones coming in to pay the ones going out but there is no guarantee.