How to help your family manage your affairs when you pass away

Planning for your death can be emotionally difficult, but it could be a huge help to your loved ones. 

Research suggests administering an estate after a loved one has passed away can affect mental health and finances. Read on to learn more about some of the steps you could take to help your family manage your affairs. 

According to the Exizent Bereavement Index 2023, more than half of people dealing with bereavement and administering an estate say it’s harmed their mental health.

Furthermore, 28% said they suffered financial difficulties. This was driven by unexpected costs, Inheritance Tax (IHT) obligations, or pressure to distribute assets.

In fact, just 1% of people said they found the probate process easier than expected.

6 practical steps you could take now to ease the burden on your loved ones

1. Create a document that contains the details of all your assets

The person administrating your estate will need to gather information on all your assets. That often means tracking down accounts, debts, and more.

Make it easy for them by creating a document that contains the details of all your assets, from savings accounts and Premium Bonds to insurance. 

Once you’ve completed the document, keep it in a safe place and regularly review it to ensure it remains useful. 

2. Write your will

Writing a will is the only way to ensure your assets are passed on according to your wishes. Yet, around 20% of people pass away without one in place. 

A will may also make distributing your assets to loved ones much easier for the executor of your estate.

However, many estates that have a will can still present challenges. It’s estimated that, on average, more than a fifth of assets are unknown at the start of the probate process. 

Make sure the instructions in your will are clear and thorough. Overlooked assets could make handling your estate much more stressful. 

A financial review could help you understand your assets and how you’d like them to be distributed so you can reflect this in your will. While you don’t need to seek legal advice to write a will, it’s often advisable if you want to minimise mistakes. 

3. Consider how to pass on assets efficiently

The probate process can be lengthy. Your family could be waiting months to receive the legal documents they need to handle your estate and receive their inheritances, which could leave them facing financial difficulties. 

Your executor may need to apply for a probate grant. This is often needed to access your bank accounts, sell assets, and settle debts. According to data from the government, applications for probate grants between April and June 2023 took around 14 weeks to be issued. 

In addition, letters of administration are likely to be needed to allow someone to administer your estate. Obtaining these took, on average, between 18 and 23 weeks.

So, if your family rely on your income or assets to cover short-term costs, a plan to pass on assets more efficiently, such as using a trust, might be useful. We can help you understand what’s right for you and your family as part of your estate plan. 

4. Set out your funeral wishes 

Thinking about your funeral might be painful, but it can be useful for two key reasons. 

First, your family may be unsure about your preferences – would you prefer a burial or cremation? Are there particular songs you’d like played during the service?

Setting out your wishes can make organising the funeral much less stressful for your loved ones. 

Second, it allows you to set money aside to pay for the costs. With more than a quarter of families administrating estates facing financial difficulties, it could relieve a large burden. 

The costs associated with a funeral can often be released from your estate before the probate process is concluded. 

5. Understand if your estate could be liable for Inheritance Tax

The administrator of your estate will be responsible for settling an IHT bill if your estate is liable.

While IHT is paid after you pass away, it’s something you can consider during your lifetime. If the total value of your estate exceeds the nil-rate band threshold, which is £325,000 in 2023/24, your estate could be liable for IHT.

There are often steps you can take to reduce a potential IHT bill if you’re proactive. It may mean you pass on more of your wealth to loved ones and make your estate easier to manage.

If you think IHT could affect your estate, please contact us. We can help you understand what steps you may take to mitigate a potential tax bill. 

6. Involve loved ones in your financial plan

You don’t need to share the details of all your assets, but involving your family in your financial plan could mean they have a better understanding of your wealth and wishes. 

As financial planners, we can work with you and your loved ones to create an estate plan that suits you and eases the burden on those who will administer your estate. 

In addition, introducing your family to us may help them manage their own assets and inheritances better.

If you’d like to talk to us about your estate plan and the steps you can take to make your estate easier to manage, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, trusts, will writing, or legal services.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

Tax concessions are not guaranteed and may change in the future. Tax-free means the investor pays no tax.

Approved by The Openwork Partnership on 09/11/2023.


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