Personal Financial Planning: Are You Set For Life ….and Death
If there is one subject no-one wants to talk about, one taboo to top all taboos, it’s talking about our death or the death of a loved one.
It’s the one thing we all know will happen and yet who wants to stare too long into that particular abyss?
But if you don’t sit down and do some planning for when you die, you could be doing anyone dependent on you a great disservice; after all, once you’re gone they will be bereft of your income and have to somehow cover the costs of a funeral and other unavoidable costs.
More about that in a minute, but we assure you the costs are shocking!
So, time to put your fears aside and face this head on. This weekend, grab your partner — if applicable — and a bottle of wine and start doing some financial planning.
This may take a few days, but once you have it done, you’ll have peace of mind knowing your loved ones will be taken care of after your death.
Then, once it’s all done, stick on your most luscious lipstick, do your hair, get to a karaoke bar and celebrate being truly alive!
Fiancial Planning for Life and Death
Here are the top things you should cover during your financial planning:
1. What to Do If You’re Unable to Make Decisions
If you were incapacitated due to an illness or accident and were unable to make decisions, who would you want to take over your finances?
If you think your family would automatically take over, you’re mistaken. Unless you’ve assigned a Power of Attorney, your family would need to apply through court to take control of your finances, which could take time.
So, the first part of your financial planning should be to decide who you would like to make financial decisions for you should you lose the ability to make these decisions yourself.
Once you’ve decided, have a look at the power of attorney, which will tell you all you need to know all about a legal document called a Lasting Power of Attorney, or LPA.
You can fill out a LPA anytime and have the peace of mind that a trusted relative or friend will take over should you ever be unable to make decisions yourself.
Right, have a sip of wine, then on to the next step!
2. What about a Will?
If you’ve been putting this step off, you’re not alone; according to British Senior’s Insurance Agency, only 32% of people have a will, meaning most of us don’t.
And planning a will is, can be demanding; it’s sad, it’s prickly, but if you want to decide where your assets go after you die then you need to just sit down and get it done.
The good thing is, you only need to do it once, unlike many other unpleasant tasks we have to do in our lives (yeah, we’re talking about you, dentist and tax guy!)
It’s especially important to have a will if you’re married or have assets such as property, large sums of cash or any shares; with everything detailed in a will, your assets will go to the right place and it will be clear who will look after your estate after you’re gone.
If you’re not married but you have a partner, a will means that your partner will still be provided for. Without something in writing, your partner will be entitled to precisely nothing.
And, of course, if you have children you can decide who they would be left with in the event of your death, if you don’t have a spouse.
Deciding who looks after your kids is one thing you don’t want to take a chance with; all too often children end up in foster care because no arrangements have been made, and stay there until a judge has decided on a legal guardian.
Wouldn’t you rather be the one to make that decision?
A will needn’t be expensive, either. Solicitors often charge very little to draft or amend wills. Better still, get peace of mind with Beyond’s online will writing service. With Beyond, you can write a legally binding will from the comfort of home.
It’s the easy way to make a will with their online will service which is hundreds of pounds cheaper than your average solicitor. And with unlimited updates for £10 a year, you can change your will as much as you like (great for managing that final inheritance tax bill…!)
Click here for more information.
3. Have Funds in Place
Unless you’ve faced the unpleasant task of planning a funeral recently, you may not know that the average cost of a funeral is, a staggering £4,522.88 nationally and £5,469 in Sheffield according to a survey conducted by the British Seniors Insurance Agency.
And that is not the only expense to be paid for when we die; from doctor’s certification fees to burial or cremation fees to estate administration costs, the money has to come from somewhere.
Make a decision about how these costs will be covered, whether it be through existing funds or whether you want to start putting money aside in a savings account to cover these costs.
It’s also possible to pre-pay for a funeral by purchasing a funeral plan, where you pay for and plan your funeral before you die (yeah, you’ll need two bottles of wine for that planning session!)
Whatever you decide, make sure it is detailed in your will so that it is clear what your intentions are.
4. Consider Life Insurance
If you don’t already have life insurance, now may be the right time to do it. You can compare and get life insurance quotes in minutes with Money Supermarket.
It’s a crucial part of the planning stage, especially if you have a partner or children, and the sooner you do it, the less expensive it will be – after all, life insurance policies increase dramatically in price as we age and become particularly expensive once we’re over 60. Click here to find a policy that’s right for you.
There are other ways to pay less inheritance tax, click here for more information. This site will also give you a good idea of how much you’d end up paying based on your financial status.
5. What Information Should You Leave?
Part of your planning should involve listing websites that you have a membership with.
While you shouldn’t list any passwords for these accounts – it’s actually illegal for someone to log in and pretend to be you, and your loved one could inadvertently get in trouble — do make sure that you list the names of the websites so that your loved ones can contact the companies after your passing.
Also, make a list of any bank accounts, the details of your gas and electricity providers, and any other pertinent information you think would be useful for your family members to have.
Once you have all this sorted and decisions have been made, you’ll feel much more content knowing that everything is in place for when you die.
Take a peek at the infographic below for more shocking and amazing findings!
Now, Your Turn
Have you already made a will? Or have you taken any other steps to plan for your eventual passing? Or perhaps you have tips on how to discuss the thorny subjects of wills and life insurance, etc, with a loved one. We’d love to hear from you!
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This is so true, relevant and useful. I really should stop putting this off.
Hi Kathy, thank you for leaving your comments. I am glad you found the post useful.