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Getting your affairs in order – top considerations
We are all mortal, but us British really don’t like to talk about death. As such people avoid addressing the practicalities and necessary legal actions that will protect their family both financially and emotionally if the worst were to happen. We don’t have to get all maudlin about getting our affairs in order. It’s a matter of peace of mind, doing the best by your loved ones and then getting on with living life. So, let’s not get morose, but let’s look at the top things we should be doing to get our affairs in order.
Funerals are very personal affairs. There are different elements and decisions about how they should be undertaken. Ideally how you wish this to unfold is down to you. Whilst you can’t spare your family the trauma of your parting, you can make it easier for them. A funeral plan can set out what you want, whilst saving loved ones from the financial burden and distress of organising it themselves. It also ensures your final curtain is as you would wish it to be.
The Funeral Planning Authority regulates the industry and their frequently asked questions explain some of how it works. They list registered providers so you can choose one that adheres to a strict code of conduct. When selecting a funeral plan you should check exactly what your deal includes and ask if it covers inflationary costs. Then make sure your family know you have this covered and that it is something they don’t have to worry about.
Around half of all people in the UK do not have a will. Without one, there are specific fixed rules about what will happen to your estate when you die and you will not have a say. A will is an opportunity to divide your resources as you see fit, leave any specific heirlooms to named individuals and spare your family the arguments! A will is legally enforceable but needs to fulfil certain criteria and processes to be valid. There are plenty of resources, such as the Which Guide, to advise on what you should include. However, if you want to be completely sure, or if there is any level of complexity, it is worth getting a solicitor involved. Key things to consider are:
Your estate – work out the approximate value of your combined assets such as your home, property, savings and investments. Remember any debts or liabilities must be taken away first. If over £325,000, you will have some inheritance tax planning to do. What do you want to leave to who?
Guardians for your children – If you have children, your will should set out who their guardians would be in the event of the death of both parents. This may be incredibly unlikely but in the worst-case scenario wouldn’t you rather have the best possible arrangements and financial provisions for them settled by you rather than the family courts?
Executors – these are the people named in a will who have the legal responsibility to carry out the instructions. Pick people you trust and discuss it with them. It is fine for them to also be a beneficiary of the will.
Lasting Power of Attorney
Even those that think to complete a will don’t always fully consider powers of attorney. These are legal documents that allow a named person to manage your health or financial affairs for you. A lasting power of attorney allows someone to do this for you even when you no longer can – if you lose the mental capacity. It’s also worth knowing this power does not automatically fall to spouses if you don’t pre-arrange this.
The reason to do this now, when it’s way off and you have all your faculties, is because it can be incredibly difficult trying to get this arranged when you don’t. It gives you time to select the person or persons who you completely trust to act according to your wishes and in your best interests.
There are 2 separate provisions and you can select different attorneys for each.
1) Property and financial affairs – who will have access to manage your bank accounts and assets. 2) Health and welfare – this only applies when you do not have mental capacity and it allows your attorney to make major decisions about your health care, including whether or not to give life-sustaining treatment. You will need to think this through what you would want to happen and discuss it with whomever you choose.
Life Insurance & Income Protection
Life insurance is for those who are financially supporting others, to provide for them in the event of death. The sooner you start paying into this, the lower the payments will be. Generally it delivers a lump sum should you die. Income protection covers you if you become unable to work due to illness, and it will pay out in instalments until you are better or retire. These may be low likelihood, worst-case scenario insurances, but should you or your family be unlucky enough to need them they can make an incredible difference, especially if you don’t have other resources or savings to fall back on.
It’s not that everyone is advised to have both, but that you are advised to weigh up the options, the financial implications of death and illness on those around you and make informed choices. If you opt for these policies, make sure you fully understand what they do and don’t include.
Right, now you’ve faced all these difficult decisions and considerations of your own life, we hope the mood hasn’t slipped too much. It’s not always nice thinking these things through, but it’s the right thing to do. Now go and pour yourself a stiff drink or do something life-affirming!