No-one really likes to think about it, but the fact is that we all die sooner or later. And while most people live to a ripe old age, sometimes the unexpected does unfortunately happen. And if it does, you want to make sure your loved ones don't have to waste time untangling your finances while trying to recover from their loss.
Here are some top tips to help you organise your affairs:
Consider life insurance: A life insurance policy can help to pay off outstanding debts or be used to provide a financial cushion for your heirs to help them after your death. It can be easy to set up and simple in its terms - if you die during the policy, your estate will receive a lump sum. And the money can be used for any purpose - many homeowners take out a policy when they buy their first home so it can help to pay off the mortgage in the event of a death, but you can use it to repay other debts, set up a fund for your children or even blow the lot on the trip of a lifetime to get over the grief.
Make a will: According to Which?, more than half of adults in the UK, and a third of those aged over 45, don't have a will. The implications of dying without a will can be severe - if you are not married to your partner, your children will automatically inherit. If you are married but separated then your estranged spouse could find themselves with a hefty windfall, while your new partner is left out in the cold. And if both parents die without a will, then it will be up to the courts to decide who is to care for them - and it could be someone that you wouldn't have chosen yourself. Making a will is relatively simple and doesn't have to cost the earth. You can even do it yourself if you want to cut costs further.
Keep your paperwork together: You can be the most organised person in the world, with a will, life insurance and provisions for all your responsibilities. But if nobody but you knows about it, or where to find it, it could end up being next to useless. Make sure all your important documents - your will, bank details, insurance policies, investment details and so on - are kept together and that someone you trust knows where to find them.
Consider a joint account: Normally when you die, your finances are frozen while the administrators or executors of your estate work out where the money should go - paying off debts, heirs and so on - it's known as probate. But if you have a joint account when you die, the money held by it is normally considered to belong to the other account holder. This means that in addition to it not being part of the estate - and thus not liable for inheritance tax - your partner will have access to the cash to maintain their life. Of course, if you're overdrawn when you die, then your partner will have to deal with that debt.
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