Practical Steps You Can Take Today to Lessen the Burden on Your Family In the Event of Your Death
Jane*, one of our clients, told us that her wealthy Uncle Mark* had died. Jane and Mark had been really close.
But she said that he had left a complete mess.
Mark’s money was everywhere, with dozens of investments and complicated tax structures. His record keeping was almost non-existent.
It took Jane an age to piece it all together so that Mark’s estate could be settled, and her and her family could move on with their lives.
“It really changed my opinion of him. I wouldn’t wish that experience on anyone”, she told us.
Jane’s story is an important lesson to all of us.
Nobody wants to cause that amount of stress to those they love. Nobody wants to tarnish their legacy, with no way of putting it right.
Fortunately, there are simple steps you can take to avoid this happening to you.
We have highlighted five of the main ones below. All are practical steps you could get started today.
1. GET A WILL AND MAKE SURE IT IS UP TO DATE
A will is the best way to formalise your wishes, yet more than half of adults in the UK do not have one.
Having a will in place reduces stress and speeds up the administrative process for your loved ones.
Critically, it also avoids ambiguity about how your assets are to be shared, which can cause rifts between family members.
Even if you already have a will, you should make sure it is updated to reflect changes in circumstances, such as new grandchildren.
2. ENUSRE THAT YOU FILE AN "EXPRESSION OF WISH" WITH YOUR PENSION PROVIDERS
But not everything is covered by your will.
Most pensions do not form part of your estate and therefore are normally not covered by your will.
Pension providers generally keep their own separate instructions about who you would like them to pay your fund to in the event of your death.
But, when you set up your pension, there is no requirement to nominate who should receive your pension if you died.
If you did not do this (and many people do not), then you have inadvertently introduced a big delay into the settling process if you die, as the pension provider has to work out who to pay.
You have also introduced more potential for your family to fall out, as without your instruction, there may be uncertainty around who should receive the money.
Even if you did nominate a beneficiary when you started your pension, that was probably some time ago and a lot will have changed since then (a common issue arising from this is where divorced couples still have the beneficiary of their pension listed as their ex-spouse).
Pension providers allow you to update your instructions by sending them an “expression of wish” form (sometimes called a “nomination of beneficiary” form). The instructions you send on this form supersede any existing instruction they have on file.
3. LEAVE SOME INSTRUCTIONS
Whilst we are talking about instructions, the usefulness of a will or a life insurance policy is somewhat diluted if your family does not know where to find it, or that it even exists!
Write it all down. Remember to provide details of other accounts and subscriptions that you have, not just your assets and liabilities. Leave clear notes. Keep an up-to-date record in a safe place and tell your loved ones where to find it. Talk it through with them and help them understand it. They will thank you for it.
And if you can not fit these instructions onto one sheet of A4 paper, your next challenge might be to simplify.
4. SIMPLIFY YOUR AFFAIRS
Simplification is a great way of protecting your family and giving you peace of mind.
It saves money. It saves time. It saves hassle.
Having 7 bank accounts, 6 ISAs and 5 pensions rarely does anybody any favours. It usually just creates unnecessary administration and bureaucracy.
Reducing this will reduce the stress and paperwork that your loved ones would otherwise have to trawl through and decipher with no-one to guide them.
It also means that you can shred a pile of superfluous paperwork which can be a cathartic exercise!
5. MAKE SURE SOME MONEY IS EASILY ACCESSIBLE
Finally, no matter how much you simplify your affairs, the probate process can still drag on.
If you have a spouse or partner, the household bills will still need to be paid in the meantime.
Therefore, make sure that they have a bank account or ISA in their own name, so they have ready access to sufficient money.
TAKE POSITIVE ACTION TODAY
We help people like you take the right steps today to help you and your loved ones have a more certain tomorrow.
If you would like our help making sure your loved ones are not unnecessarily burdened when you are no longer around to help them, please give us a call on 0203 488 9505.
* The names have been changed to protect the confidentiality of our clients.
The value of your investments can go down as well as up, so you could get back less
than you invested.
Tax and Estate planning is not regulated by the Financial Conduct Authority.