Thinking about your own mortality is never going to be easy, although doing so could help to reduce stress for your family when you pass away. As dealing with a loved one’s finances when they die can make a difficult situation even more stressful, getting your wealth in order to help ease the burden could be a huge help to those you love.
During Dying Matters Week 2025, we’re looking at actions you can take to help your family deal with your estate when the time comes. The week, which takes place this year between 5-11 May, aims to to encourage all communities to start conversations about death and dying, whatever that may look like.
So with this in mind, discover five actions you could take to ensure it’s easier for your loved ones to deal with your estate, which in turn, could help them while they are grieving.
1. Keep a record of your assets
If you have several pensions, bank accounts and investments, it could be difficult for your loved ones to locate them after your death. Keeping a record of them will allow those dealing with your estate to find them much more easily.
It also makes sure that none of your assets are lost because your loved ones are unable to locate them. All that said, if you do record your assets, please be sure to keep the information safe and secure.
2. Understand your Inheritance Tax position
If you thought Inheritance Tax (IHT) is only paid by the rich and famous, you may need to think again. One reason for this is that the Nil Rate Band (NRB), which is the amount you’re allowed to have in your estate on death before the tax is charged, has been frozen until April 2030.
This means it will remain at £325,000 per person or it can be combined if you’re married or in a civil partnership, taking it to £650,000. Additionally, you may qualify for further reliefs that could increase the amount you’re allowed to have in your estate before IHT is charged to £500,000 or £1 million respectively.
It should also be remembered that after April 2027, any unused pension pot that you have will also fall into your estate for IHT purposes. Because of this, your IHT liability could increase dramatically in the future.
It’s not all bad news though, as a financial adviser can help you to understand the actions you might be able to take to reduce your estate’s exposure to the tax.
3. Consider financial protection
Financial protection means you can be assured that whatever happens to you, your loved ones will be financially secure over the long-term. For example, taking life cover could ensure your family receives a lump sum that could be used to pay off the mortgage or settle an IHT charge.
This could ensure they can stay in the family home if the worst happens to you, or allow them to receive more of your wealth as it won’t be reduced by the tax charge.
4. Write a will
While a will isn’t strictly ‘financial’, not having one in place when you die could have implications for your family’s long-term wealth. As a will is a legal document that sets out who you would like your assets to go to when you die, it ensures your wealth will be passed on to family and friends as tax-efficiently and as smoothly as possible.
If you don’t have a will, your belongings will be subject to intestacy rules. This means your estate will be shared out among living relatives in a prescribed way.
Worse still, if you have a family but are not married, your nearest and dearest will not be considered under intestacy rules. This means that without a will in place, they’re unlikely to receive anything from your estate, even if they’re financially dependent on you.
5. Consider using a trust
Creating a trust can provide you with more control over how and when your wealth is passed to loved ones, and how they then use it. In addition to this, trusts can protect your estate from ‘sideways disinheritance’. This is where your children or grandchildren may be deprived of their rightful inheritance if your surviving spouse remarries.
In addition to this, trusts can also:
- speed up the process of passing your estate to loved ones
- ensure your family’s long-term financial security after your death
- reduce your estate’s exposure to Inheritance Tax.
Get in touch
Our first webinar - 'More than just a will: ensuring financial peace of mind for loved ones when you die' - was broadcast on Wednesday 23 October 2024. The online event saw experts from AFH discussing key elements of trusts and estate planning, a topic that could be useful to spark conversations between you and your family members. Fill in the form at the top of this page to view the webinar on demand.
If you would like to discuss whether you have an IHT liability and how you could potentially mitigate it, or the actions you could take to help your loved ones deal with your estate when you die, please contact us.
As your financial advisers are also licensed estate planners, they can also help you to create a will, or trust, that’s the most suitable for your financial situation. To arrange a no obligation meeting with one of our advisers, call us on 0333 010 0008 as we’d be happy to help.
5 May 2025