Have You Prepared Financially For the Worst?

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Written by Michael Foote, founder of Quote Goat, has over 13 years experience working in the finance, insurance and currency sectors.

None of us likes to think about our own demise but sadly we need to. Perhaps your goal is retirement and enjoying that retirement fund you have been working so hard towards all of your life. However, have you thought about the bigger picture? Are you and your family financially prepared for what might happen if you became ill?

Getting Everything In Order

You should always have everything in good financial order but this becomes even more crucial the older you get. It is a good idea to have a clear record of all of your spending, any income, debts and standing orders etc. You need to keep this information along with any other financial information together safe in one place.

You also need to ensure that your next of kin knows where these documents are kept.

If You Become Ill

You might find that you become ill and as a result are unable to make financial decisions. This is where planning for a power of attorney could be useful. There are two different types of attorney.

  • Ordinary power of attorney can be used to give someone a temporary right to handle your affairs. This is useful if you know that you are going to be in hospital for some time. You might want to hire a solicitor who can advise you on this and the costs.
  • Lasting power of attorney. This gives someone the right to manage your affairs on an ongoing and indefinite basis, even if you become mentally incapacitated.

When You Die

You have worked hard for your money and you need to ensure that you are properly prepared so that your family can inherit the proceeds of your estate. You will want to make a Will because if you don’t then the law will decide how your money is divided. Before you write that Will you need to plan your estate and decide how you will divide your money. Check UK taxation guidelines. How much inheritance tax is your family liable to pay? There are ways you can cut your inheritance tax and an accountant will be able to advise you on this.

Your Funeral

Funerals can be an expensive business but there are steps you take to try and lessen the burden for your family. One option is to put some money aside into savings that is specifically earmarked for your funeral. If you have life insurance then you might want to check to see if there is the option of using your proceeds to cover funeral costs. Another option is to take out a funeral plan where you pay instalments to a provider who invests the cash and uses it to cover the costs of your funeral. If you are unsure then it is worth seeking professional advice and they will be able to go over the options with you.

None of us like to think about own death but don’t let this stop you from getting your financial affairs in order. We need to plan for our future and our family’s future.

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