No one wants to think about their own demise, but there are plenty of steps you can take to make matters easier for your loved ones. At an already stressful time, a little bit of organisation now can leave them with one less thing to worry about.
A survey from 2020 revealed that a quarter of bereaved people found administering their loved one’s estate stressful, a sixth (15%) found it upsetting, and almost a tenth (8%) had to take time off work.
Furthermore, across the UK, people have to deal with an average of 12 organisations when a loved one passes away.
So here’s a guide to all of the things that you should have sorted.
- Organise your paperwork
It doesn’t take a huge amount of work to make your financial life easier, for attorneys, executors, spouses, children, and loved ones to understand.
These are the main points to consider when doing this:
- Do the important people in your life know where things are kept?
- Can your adult children, spouse, and executors find the documents they need when they come to deal with your affairs?
Some tips for getting organised are:
Get all your envelopes and papers out
Get rid of anything older than two years, except from tax reporting documents which you should keep for 6 years.
If you’re not sure whether to hold on to something, then we suggest you keep it but you definitely do not need to hold on to bank statements or pension benefit statements from many moons ago!
Once you have worked out what you’re going to keep, it is important to come up with a simple system for organising all the documents in one place. You should also make an ICE (In Case of Emergency) document…
- Create an ICE document
An ICE (In Case of Emergency) document is designed to provide all the important information your loved ones need to know when you can no longer manage your affairs or if you pass away. It typically includes:
Contact details for your accountant, solicitor and financial adviser
Where your important documents are held
Where to find insurance policies, your will, pension information etc.
By putting all the important information into one document you will make it far easier for your family to deal with your affairs if something were to happen to you.
- Make a will
Unless you make a will, you can’t be sure that your assets and property will go to your chosen person/s on your death. Even your dependent children could end up being cared for by someone not of your choosing.
Even if you already have a will, it’s vital to regularly review it. Your circumstances may have changed, perhaps because of marriage, divorce or because you have new children or grandchildren.
A letter of wishes is also recommended. A letter of wishes is your opportunity to give guidance to those managing your estate on how you’d like your assets to be dealt with. Unlike a will, a letter of wishes is not legally binding, and the executors are not legally obliged to follow any requests made in the letter. Therefore, if you wish to ensure that certain personal possessions go to certain beneficiaries, perhaps because these items have sentimental value, this should be dealt with in your will.
While a letter of wishes is no substitute for a will, it can provide practical and emotional support to your executors, family members and trustees created in the will. While some laws regarding wills and inheritance differ throughout the UK, you can write a letter of wishes to accompany a will whether you live in England, Scotland, Wales or Northern Ireland.
- Arrange an LPA (Lasting Power of Attorney)
In recent years, the pandemic has sadly taught us that illness or accidents can happen at any time. So, to get financially organised, it’s vital that you put measures in place to ensure that you have a trusted person to make decisions on your behalf if you’re not able to.
A Lasting Power of Attorney (LPA) is a legal document that can do just this. An LPA can be used for a short period, for example, because of spending time in hospital, or for the long term due to mental incapacity.
There are two main types of LPA:
Property and Financial Affairs – this deals with managing savings/investments, paying bills, claiming benefits, selling property and structuring your income
Health and Welfare – this deals with medical treatment, choosing a care home and decisions about your daily routine.
You can appoint one or more attorney – just bear in mind that they must be over the age of 18 and have the mental capacity to make their own decisions.
- Sort out your pensions
If you’ve worked for several employers during your career, then chances are you’ll have an assortment of pensions. You could well have numerous pensions, all of which could contribute to achieving your financial goals in retirement.
The Association of British Insurers estimates that more than 1.6 million pension pots worth £19.4 billion are “lost” – the equivalent of £13,000 per plan.
Now is the time to get out your paperwork and track down all your existing pensions. The government’s free Pension Tracing Service is a good place to start.
When you have located all your pensions, make sure that you have updated the death benefit nominations for each of them, so the trustees of the pension schemes know what your wishes are when you pass away.
Then, make sure details of the relevant pensions, including policy numbers and contact details, are held in your ICE document. This will make it easy for your executors to locate these pensions and ensure they are paid to the right people on your death.
- Sort out your insurances
Just as your executors and loved ones will find it useful to have details of your pensions, it’s also important for them to know about any insurances you have in place.
This might be life insurance you have arranged yourself, or cover provided through an employer.
Again, sort through your paperwork and keep a list of all relevant insurances in your ICE document.
We can come to you, in the privacy and convenience of your own home, to discuss Wills, Trusts and Lasting Powers of Attorney. We’ll explain why they are important and suggest ways that you can put steps in place to give you peace of mind for the future.
By drafting a Will, Lasting Powers of Attorney or setting up Trusts, not only will your wishes be carried out as you would like but you can also protect your family and friends from costly and stressful legal disputes.
Please contact us on 01724 642 842 or by email on firstname.lastname@example.org to arrange an appointment.