Nobody likes to talk about it but there is 100% chance you will die, one day, in some way. So why are so many people unprepared for death?
If you don’t have your finances in order, you leave your loved ones with a mess at a time they should be grieving.
If you want to save them this burden, plan now. Here’s our eight-step guide to planning for death.
Talk. As simple (or as difficult) as that. Have a conversation with your family about what you want to happen after you die. Explain your reasons, check they understand, that way there won’t be any unwelcome surprises after you die.
Make a Will. Contact a solicitor, book a date, turn up. It’s nothing more traumatic than that. The solicitor will talk you through the process and help you think of the best way to proportion out your assets.
If you die without a will, the fixed rules of inheritance apply, meaning you have no say over who gets what.
You will need to appoint an executor or executors (up to four) to administer your will. Choose carefully being an executor of a will is a huge responsibility and can be time-consuming. Remember you can appoint a professional executor such as a solicitor if you do not wish to burden your family with the responsibility.
Calculate your inheritance tax (IHT). House prices have soared in recent years so check your estate is still below the IHT threshold of £325,000 (you get an extra £175,000 if you pass your home to direct descendants).
If you find your estate has nudged over the limit speak to a solicitor about the ways you can reduce your inheritance tax bill legitimately.
Apply for a Lasting Power of Attorney (LPA)
Not so much as plan for death as a plan for life but still an important part of the process. An LPA is a legal document that allows you to appoint people to make decisions on your behalf (attorneys) should you no longer be able to do so.
There are two types: health and wellbeing, which cover issues such as medical care and moving into a care home, and financial and property, which covers your financial affairs.
You cannot make an LPA once you have lost the capacity to do so, so it is important to set it up as soon as possible.
Think of them as insurance, you hope never to have to use them but it’s good to know they’re in place if you need them.
Make a list
Make a list of your assets (bank accounts, savings, shares) and the estimated value and make sure you keep the list up-to-date.
Keep funds accessible. If you die suddenly your assets may be frozen while cause of death is established. Make sure your loved ones have access to cash at this time.
Applying for probate and calling in assets takes in excess of nine months and for more complex estates, sometimes years. Don’t leave them without the funds to pay the bills.
Create a file.
Once you’ve done all of the previous six steps, make a file put everything in the one place and tell your family or a close friend where you keep it. You may also want to leave a list of passwords for online accounts but be sure that this is secure especially if it is a digital file.
Live your life. File everything away and get on with living secure in the knowledge that you’ve done all you can for your family should the worse thing happen.