It's sad that some people do die young, either through illness or via external factors such as an accident.
Whilst you may not wish to think about premature death right now, I do think it's a responsible person who leaves their affairs in an orderly manner as possible so that their next of kin, who have the pain and grief to deal with, do not have to deal with a financial mess, especially where the person was the one in charge of running the finances in the household.
So, in an attempt to make this piece more upbeat and less morbid, let's look at the 7 'must do' steps you can take to relieve the pressure on your loved ones.
1. Create an information document that includes:
- The name of the professional people to contact in the first instance (this could be your financial adviser / planner or accountant / solicitor)
- Location of where all your financial documents are held, with an overview of the amounts held in life insurance, savings, investments and pensions (may be in a filing cabinet or all scanned to PC)
- The action that should be taken with certain policies, eg cancelling income protection and claiming on life insurance / pension funds
- Details of what your wishes are, but hopefully this will have been discussed already! (eg paying off the mortgage, investing life insurance lump sums)
- Details of all email accounts with their log in details
- Details of any recurring payments that are being made via Standing Order or credit cards
- The location of all your online passwords. These days many of us use online password managers which store all the passwords in one place (a master password is required to gain access). Make sure the master password is stored in a different location! The service I use is Roboform.
- Details of any bank accounts held in your sole name Details of all online profiles to cancel and perhaps update initially about your passing Location of your donor card, if you have one
My tip is to not overcomplicate this! I can tell you that the one I created is on 2 pages of A4, printed and stored on PC, which is updated periodically.
2. Make sure your Will is in place.
You do have a Will, don't you? Various surveys indicate that over half of adults in the UK do not have a Will.
So, what they are saying is that they are happy for strangers to deal with their estate.
Not ideal, I'm sure you'll agree!
3. Get your professional contacts in place
Your family will need to use a good solicitor to deal with probate (as it's called), so it's a good idea to have them in place now. Maybe ask friends / colleagues for a recommendation.
At the same time, the same applies with an accountant and financial adviser / planner. If you don't already use one, you may want to consider finding them now (keep in mind that this doesn't necessarily mean you'll be using their services right now).
4. Plan your own funeral
This will be a massive help to your family as it will ease the burden on them at a time when they will be dealing with the sudden reality of what has happened.
It will give you the opportunity to write your own obituary, decide on cremation/burial and deal with paying for it up front (or at least have the cost factored into your financial plan).
Lastly, you can leave your wishes of what type of service you want. For example, you could ask friends and family to treat it as a celebration of your life.
5. Get your protection sorted
If you are the main earner in your household and you have dependants, it makes sense to ensure that your family will be provided for. This will usually include ensuring you have sufficient life insurance in place.
Make sure you do thorough research so that you purchase the right policy(ies) and cover as the cost is based on your age and health now.
You may also want to consider placing it into trust so that the payout is made quickly to your intended beneficiaries.
6. Clear your clutter
What you may think is worth keeping may not be valued by your loved ones! So it always makes good sense to periodically clear the decks and get rid of / donate to charity any items that you don't need to hang onto anymore.
And no doubt your spouse / partner will be happy to free up some space in the house.
7. Discuss the details with your family
Finally, make sure your family are fully aware of all the planning and preparation that you've done.
This also makes sense as it will give you the opportunity to deal with any issues now, rather than the family picking up the pieces once you're gone.
No doubt you'll agree that the 7 steps are not out of the ordinary. The key now is to take action and put them into place, as required, for your own situation.
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ABOUT THE AUTHOR
Ray Prince is a fee based Certified Financial Planner with Rutherford Wilkinson ltd & helps UK Resident Doctors & Dentists plan to achieve their financial objectives. Just visit the specialist website for dentists' and medics' financial planning & you can request your free retirement planning guide. RW is authorised & regulated by the FCA.