The days, weeks, and months after losing a loved one are some of the toughest periods you’ll ever go through. With someone who has played a significant role in your life no longer around, it can be hard to do some of the most basic tasks.
Consequently, dealing with financial affairs might well be the last thing you may want to think about when you’re faced with loss. Focusing on details and paperwork can often be a challenge when you’re grieving.
However, there are likely to be plenty of matters to tackle when dealing with finances after the loss of a loved one.
At such an emotionally challenging time, you may also suffer a loss of income if you are unable to work.
With that in mind, here are six helpful financial steps to consider if you are recently bereaved, including working closely with a financial planner to help you draw up a financial plan.
1. Manage any inheritance and assets
During what is an incredibly difficult time, inheriting money can often be a further reminder of the death of a loved one. Moreover, you may find it difficult to separate the positive emotion of receiving a bequest from the grief of losing someone close to you.
Managing a large inheritance can often be difficult. If you have received a lump sum, you may not know the best way to invest it, or how to use it to support your own goals.
So, it’s important to take your time to grieve the loss of your loved one and get accustomed to the idea of having this inheritance. It can be beneficial not to make major decisions right away.
You also may be required to be an executor or administrator of the deceased’s will. In some situations, family members may feel entitled to a share of the assets or feel jealousy towards anyone who inherited from your loved one.
This can lead to resentment and conflict, so overseeing the successful resolution of the inheritance is crucial.
2. Update any insurance policies
Your loved one may have put insurance policies in place to protect you and your family financially. While sorting out practical things like insurance policies can be a challenge when grieving, it’s important that you speak to the provider to claim any money or assistance that is due.
Additionally, some of the household insurance policies could be in your loved one’s name. If so, these policies may have terminated upon death and your home, car, or other assets may be unprotected.
You may also have named your loved one as a beneficiary of your own insurance policies. So, you’ll also need to amend these.
3. Dealing with your loved one’s accounts
The process of closing your loved one’s bank or building society accounts can be an emotionally difficult and stressful time.
You’ll need to notify your loved one’s bank or building society so that they can freeze the account and start the process of closing it before releasing any funds to you and any other beneficiaries.
If you and your loved one had a joint bank account, you may be concerned about what will happen to the account now they have died. Most joint accounts come with rights of survivorship, so you could be able to take full ownership of the account by presenting your loved one’s death certificate to the bank.
If you have a mortgage, you will also need to speak to your mortgage provider to inform them of your loved one’s death.
There could be a life insurance policy, an endowment policy, or a mortgage protection policy in place to pay the outstanding mortgage if the person with the mortgage has passed. Your lender can help with this.
4. Update your will and Lasting Power of Attorney
The death of a loved one serves as a reminder that unexpected events can happen at any time. With that in mind, it could be a good idea for you to update, or put in place, your own will and nominate a Lasting Power of Attorney (LPA).
Having a clearly defined and valid will in place could enable you to make provisions for your loved ones and make your requests clear.
Similarly, organising an LPA could allow you to appoint one or more people, known as “attorneys” to make decisions on your behalf if you’re unable to. This means you’ll have more control over what happens to you in the future.
If you don’t have an LPA in place, your loved ones may be locked out of your financial affairs and may not automatically be able to gain access to your bank accounts or insurance policies.
5. Investigate whether you can claim Bereavement Support Payment
The death of a partner can cause both emotional and financial challenges.
To help you cover some of your monthly expenses and other outgoings, you may be eligible for Bereavement Support Payments.
If your partner died before State Pension Age and paid National Insurance contributions for at least 25 weeks in one tax year since 6 April 1975, you could be eligible for this support.
If eligible, you would receive these payments every month for 18 months after the date your partner died. So, it’s important you claim this as soon as possible to avoid missing out on this valuable income.
6. Work with a financial planner
Receiving support and guidance following the death of a loved one can help you make the right decisions for you and your family. Indeed, if you’ve received an inheritance or you aren’t sure about the best way to deal with your loved one’s finances, a professional financial planner can add value.
At Solus Financial Planning, we can help you navigate the bereavement process and provide advice and guidance. To find out how we can support you, email hello@solusfinancial.co.uk or call us on 01245 984546.
Please note
Note that protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.