When a family member or friend dies, the time afterward is always very distressing. Financial issues can make the situation even worse, and if the person has not done any estate planning, resolving finances after a death, can become complicated. Even though it is not easy, it is always a good idea to plan ahead. Taking out funeral plans to cover the cost of a funeral is a good idea, but above all, a will is more important than anything else.
A Death Certificate
The first thing you should when someone dies, is to get the death certificate. Many organisations including funeral plans, banks and life insurance companies will need to see the death certificate or the registration of death. This is a painful process to go through, and if you don’t feel up to it, you should ask someone to help.
Who Should You Notify?
After someone dies, you should try to notify everyone as soon as possible. This is particularly important if the person has credit cards or loans. It is easy to assume your debts die with a person, but that is not always the case. If you have an estate, and die with debts, any lender will likely make a claim. Let all financial organisation involved know as soon as possible. Of course, this essential when you expect funeral plans services to settle the bill for the funeral.
What Happens to Life Insurance?
If the person dies with no debts or mortgages, the life insurance becomes part of the estate. The lump sum of money from a life insurance policy can be inherited by surviving family members. It can be used to pay for the funeral if there are no funeral plans in place to do so.
Many think that using life insurance to pay for a funeral is not good value for money. This is why so many families in the UK opt for taking out funeral plans.
Leaving A Will
When there is no will, things can often become more complicated. Sometimes, if there are no immediate surviving family members, other relatives will have to be traced. If that is not possible, the money will go to the taxman. Today, there are companies which specialise in trying to find lost relatives. It is important to leave a will even if you don’t have any surviving family or friends you want to leave your money to. Perhaps you have been involved with a charity during your lifetime. In that case, you can always leave any money to them.
List of Financial Status
Creating a list of your financial status is another good idea. When this exists, it is easier for family and friends to deal with debts or track down assets. It is surprising how many people don’t want to leave details of their financial status. This can often make the situation difficult, and when debts crop up, the rest of the family may wonder how they are going to settle them.
What About Your Home?
Yes, your home will become part of your estate. However, you need to make your family is aware if there are any restrictions when it comes to the equity of your home. Many seniors choose to use part of the equity in their homes. This is called equity release. Equity release is a good idea when you have plenty of equity in your home. It gives you money to spend on the things you consider important. Perhaps you have a bucket list of places you would like to travel to before you pop your clogs. The downside of equity release is that it needs to be paid for when you die. If there is any remaining equity in the home once the home has been sold, your surviving family will inherit what remains.
Honesty is Best
Good estate planning is all about honesty. You don’t have to tell your family what they are going to inherit. But making it complicated is not the thing to do. Resolving finances after a death is complicated enough without extra hassle. So, be honest with yourself and think about estate planning as a way of giving yourself peace of mind. It may even feel comforting to know your family will be taking care of after you have moved on.