Things are rarely straightforward when it comes to money so planning for what should happen if you or your partner pass away is very important. Not having a Will can mean your property, savings and investments may not be passed to the people you’d like to inherit them so make sure your wishes are clear.
Wills and executors
Name an executor or executors to carry out your Will, asking if they wish to act first and telling them where your Will is. It’s a good idea to make a contacts’ list for them including details of your solicitor, bank, accountant and financial adviser together with bank and savings’ accounts, pensions and life policies and a summary of financial gifts you may have made for Inheritance Tax purposes. For a £25 annual fee, MyLife.place lets you collate all this online with a secure password that you can give to professionals or relatives so they access your requests and bequests. Read our jargon-busting guide to making your Will.
Passing on assets and probate
Jointly-owned assets usually pass to the survivor on death. Other assets are frozen until a Grant of Probate has been obtained – a process that can take months. Exempt for estates worth less than £5,000, the probate fee is then £215 when applied for by friends or family, or £155 if a solicitor completes the process. Ensure you and your partner or dependent has money in their own account to meet their needs during probate. Read our guide to the probate process.
Inheritance Tax rules
Funds from your estate are used to pay any Inheritance Tax (IT) owed. There’s no IT to pay if either the value of your estate is below the £325,000 threshold or you leave everything to your spouse or civil partner. If you give your home to your children or grandchildren, your threshold will increase to £425,000. There are ways to reduce your IT bill including making gifts, giving to family members and putting things into trust, so talk to a professional tax adviser on how best to do this. Find one by calling 0800 023 6868 or visit Unbiased. Read our guide to inheritance tax.
A life insurance policy could help to keep your family financially secure after your death. A policy doesn’t just have to pay out a lump sum; family income benefit policies pay out a monthly income instead. This may be better (and cheaper) if you are looking to replace an income if you were to die, rather than pay off a debt in one go. Again, talk to a financial adviser about what would be best. Read our guide to life insurance.
The average cost of a funeral is £4,000 and rising. A pre-paid funeral plan is one way to ensure you and your family are protected by rising costs and any future tax changes. With a plan, money is set aside and your wishes are recorded, insulated from external factors like inflation which could affect the value of savings. Read why a funeral plan is important.
5 ways get your affairs sorted
- Update your Will. If you’ve married, divorced or remarried or now have grandchildren, it may no longer be valid. When you write a new Will, state that it replaces earlier Wills and destroy older versions.
- Set up a power of attorney. This is a legal document that gives a close relative or friend you nominate the right to manage your financial affairs if you’re incapable of doing so.
- Write a letter of wishes. This isn’t legally binding but you can use it to deal with smaller items not mentioned in your will and the style of funeral you want.
- Check how your pension savings can be passed onto loved ones - rules differ depending on your scheme.
- Discuss your will with those who will be affected by it. You cannot bind family in terms of funeral arrangements or organ donation. You could sign up to the organ donation register and carry a donor card but discuss your wishes with loved ones.
- Yours has teamed up with Avalon Funeral Plans to offer a free guide to pre-paid funerals call 0800 088 2308, write to Yours Funeral Planning, FREEPOST – NAT 5718, Wilmslow SK9 2BR or apply online.
- Yours Retirement Services can help you write a Will and a Lasting Power of Attorney. Speak to a specialist on 0808 156 9012 or find out more here.
Thanks to Aegon, Avalon, The Wilkes Partnership
Words Sarah Jagger