Tidy up your estate in 5 easy steps
While no one wants to be morbidly planning their own funeral, completing a few relatively straightforward tasks can lay the legal and administrative groundwork to give you peace of mind that you have made the process a lot easier for family members when the bell finally tolls. In many people’s experience, it can be a huge relief to have organised the end of their life, it can allow you to just get on with things and no longer have to avoid thinking about it.
So, here are 5 essential steps which will make the process infinitely more streamlined and convenient for family members when a loved one passes away and will allow the organiser the peace of mind that all the essentials are prepared:
1. Make or Update Your Will
There are cost-effective ways of writing a will if your affairs are reasonably uncomplicated. You could write it yourself using a free template (although remember the validity could be questioned if you make any mistakes), there are online providers, such as Your Will Be Done, a basic will costs around £27 and you can have it checked by a member of the society of will writers for an extra £27. A normal solicitor could charge over £150.
It’s worth keeping in mind that you are under no obligation to have the will writer named as an executor, that is usually a tactic to secure the business of administering your estate.
Name suitable executors. It is wise to name one and one backup option should they be unable to act. An executor should be someone you trust, it will be up to them to follow any instructions in your will and find fair solutions to any disagreements that may arise. It is advantageous if they are well organised, competent at paperwork, and able to think clearly at a difficult time. Try to name an executor that lives nearby so they can deal with any local matters.
Wherever you want your money to end up, if you don’t write it down properly, it may not happen. There have been some weird and wacky things written in wills, like in this article a gentleman wanted a rose to be delivered every day for the rest of his wife’s life. Perhaps you would like a very helpful neighbour to receive something? You could even leave everything to charity.
Be as specific as you can if you are naming more than 1 person to inherit anything in your will. You could give specific items like furniture or jewellery away while you are alive to avoid any disagreements at a later date. Unfortunately, it is very common for family members to fall out when things aren’t clear or there is a perception of unfairness.
In Scotland, even if they are deliberately written out of a will, spouses and children are always entitled to claim on the estate (get more info).
2. Organise Your Paperwork
When it comes to preparing your estate, it will be a big help to prepare a folder that your executors know the location of that contains the following (if applicable):
- Your will and all the contact information of anyone named in your will.
- Birth & marriage certificates.
- Divorce papers.
- Death certificates of any close relatives.
- A list of any bank, saving, investment, and credit card accounts.
- Property deeds & mortgage provider information.
- Insurance policies.
- Recent tax certificates.
- Pension providers.
- A list of companies you pay bills to (TV, mobile, energy etc.).
- A list of any subscriptions or mailing lists you are on.
- Information about vehicles or businesses you own.
3. Simplify Your Finances
If you can afford it, pay off any unsecured debt such as credit cards and loans. Consolidating bank accounts and any investments you have may also be a wise move, although be careful about going over their probate threshold or the FSCS limits.
If you trust your executor(s) implicitly, you could turn your bank accounts into joint accounts to avoid them being frozen when you die. This will also avoid the need for a ‘grant of representation’ (commonly referred to as ‘probate’) to collect the funds. What is Probate?
For inheritance tax purposes, HMRC will assume that half the balance of any joint account is part of your estate, although if there are large sums and you are concerned about any inheritance tax liabilities it is recommended that you contact a solicitor, see our guide to choosing a solicitor.
There are various completely legal techniques to reduce and avoid inheritance tax, the current threshold is £325,000 - it doubles to £650,000 for a married couple as long as the first person to die leaves their entire estate to their partner. These thresholds rise if a home is being left to children or grandchildren (get more info).
If practical, sell or transfer any financial interests you have abroad or in other jurisdictions like the Channel Islands. It can be extremely expensive and time-consuming for executors to deal with these matters when you are no longer here.
4. Choose Someone to Speak for You
In the event that you became too ill to speak for yourself or handle your own finances, who would you want to speak and make decisions on your behalf? Have you spoken to that person about the things that are important to you? Ideas like organ donation and whether or not you are comfortable with machines keeping you alive come to mind.
Getting a Lasting Power of Attorney and a Living Will drawn up well in advance and having a conversation with the person/people you nominate is a great way to ensure easy access to funds and that your wishes are followed with respect to end-of-life care. It could also help the person you nominate make clear and pre-planned decisions at a difficult time.
A Power of Attorney and a Living Will can only be made while you still have the mental capacity to do so, in the event that it is too late it can be expensive to go through the courts and they may not appoint the person you would choose. Please use the links below for more info.
5. Talk about your funeral
A funeral is generally considered to be for friends and relatives to have an opportunity to express how they feel for someone they loved. It is a good idea to at least discuss the last event you’ll ever be a part of.
Suggestions about what type of ceremony you would like, which music you would like played, if you would prefer a ‘crazy coffin’ or a plywood box knocked together in the garage, and such things can help your loved ones by reducing the number of decisions they have to make at what will invariably be one of the most difficult times in their lives.
The average cost of a traditional funeral is over £4000. If you are concerned about the cost, a pre-paid funeral plan may be a good idea. This allows you to pay at today’s prices to beat rising funeral costs and inflation. These plans are not currently covered by the Financial Conduct Authority so choose wisely.
Alternatively, you and your loved ones could consider some kind of DIY option. It may interest you to know that you can be wrapped in a shroud and buried in your back garden, without planning permission, so long as you have the owner of the land's permission and a few regulations are followed. It may be a good idea to consult your local authority.
What happens next?
The majority of people have, unfortunately, not completed these tasks. This makes the process of dealing with a loved one’s estate difficult and extremely time-consuming while they search through every last piece of paper, hunting for clues that will help them build up a picture of your financial relationships.
At this point, many people automatically turn to a firm of solicitors to “deal with everything”. This can cost many thousands of pounds, and quite often the family will still have to do a lot of work anyway, like searching through the paperwork.
According to ‘Which?’, the consumer champions, around 1 in 3 people try to complete the estate administration process themselves. The current resources available are not fit for purpose so we have developed a new online portal to help these people by showing them what to do, when to do it, and how to do it for a fraction of the cost of a solicitor.