Dying is expensive – not for you, but for the people you leave behind. Whilst none of us like to think about death, making financial plans now could be necessary to help lift the burden off your loved ones. Here are just a few of the ways in which you can start making financial plans now.
Write a will
A will allows you to choose how your wealth and possessions are distributed after you die. Without a will, you don’t get to choose where it all goes, which could mean certain worthy people missing out.
For a will to be official, it often needs to meet certain legal requirements. There are guides online that can help you to write a will, but many people prefer to use a professional will writer or seek advice from a will advisor.
You can alter a will at any time by making a special alteration called a ‘codicil’. Alternatively, you can write a new will. As a result, you shouldn’t delay writing a will just because you’re worried your wishes may change – so long as it’s your decision, you can make as many changes to your will as you want.
Consider inheritance tax planning
If your estate is worth more than £325,000, your loved ones may have to pay inheritance tax. Your loved ones will be taxed a whopping 40% of any amount earnt over the threshold.
Fortunately, there are many legal ways to get around this, such as putting money in a trust or donating money to charity. It could be worth talking to a professional who can help you with planning inheritance tax. You can also find information on inheritance tax online.
Financially plan for your funeral
Funerals are big business – the average funeral in the UK costs £3,757! Whilst you may be happy having something low-key, there may still be many compulsory costs to consider. Finding a way of paying for these funeral costs yourself whilst alive could save your loved ones having to scrape together this money (plus you get to decide the type of funeral you want).
There are many ways to fund your funeral. Putting money in a high interest savings account could be one option. If you don’t trust yourself to not dip into your savings, another option could be a funeral pre-payment scheme – this involves paying a funeral company in small instalments each week.
Another option is life insurance, which can provide your loved ones with a financial pay out when you die. Life insurance can get more expensive the older you get with some companies may refuse to insure you once you reach 80. You should weigh up these options and consider which is the best suited to you.
