You may not have heard of a death box before and no I’m not talking about a coffin! Picture the rather morbid scene. You’ve died suddenly in an accident and the police are at your door informing your loved ones that you have gone.
What happens next?
Whilst your loved ones are dealing with your passing there are bills to pay.
The credit card bill may be shortly due. Payment due for an item that had already been reserved. Your child expecting the gift you promised them to help buy their first home. Basically a list of financial actions that need to be taken.
You were on top of everything and knew which account money was coming out of but now you’ve gone does your family know?
This is where a death box can help.
What is a death box?
A death box is a way of storing all of the important details of your life both financial and personal wishes.
This could include things like:
- Bank accounts.
- Bills – details and how they are paid.
- Preferred tradesman e.g. plumber, electrician.
- Trusted advisers e.g. Financial Adviser, Accountant, Solicitor.
- Copies of your wishes e.g. your Will, Trusts that you set up or gifts you were planning or had made.
- Evidence of loans due back to you.
Anything that will reduce the stress and make it easier for your loved ones at a very difficult time.
Now this could all be held in a physical box/file but I appreciate there are security issues around this, so if you choose this route you may want to invest in a good safe. Make sure your loved ones know the code!
There is also the option of an electronic system that records this all for you.
In fact, we use software with clients that allows them to collate all their financial data in one place and share this with their family. It’s a quick, easy to update and a secure way for families to access what they need if the worst was to happen.
More thorough death planning
It’s always better if you can plan for every eventual scenario and there are many things you can do to make things as straightforward as possible.
#1 – Wills
Ensure you have an up to date Will in place that explains what you want to happen to your estate on your death.
#2 – Trusts
In the right circumstances setting up Trust Funds could be a great way of ensuring your estate remains in the family bloodline and avoids being partly lost on a child’s divorce.
#3 – Lasting Power of Attorney (LPAs)
Often forgotten about but a Lasting Power of Attorney will give someone you choose the legal right to look after you and your affairs should you lose the mental capacity to do so.
#4 – Pension death benefits
You should complete a ‘pension death benefit nomination form’ or ‘expression of wish’ with each pension provider you use so that they have guidance on where pension benefits should be paid on death.
Pensions are not dealt with by your Will.
#5 – Funeral costs
These are a significant cost and your loved ones may not have access to the full value of your estate until probate has completed, which is usually well after the funeral.
Funeral costs are increasing all the time so why not consider putting a pre-paid funeral plan in place to fix the costs now and have everything paid for.
#6 – Inheritance Tax
In certain circumstances you may lose nearly half of your estate to Inheritance Tax.
There are ways to avoid this with the right planning but you must act sooner rather than later.
So the death box may take a little time to put together but it could be the best bit of planning you ever did.
If you would like help putting together your death box or at least an overview of your current Inheritance Tax position then why not take advantage of our free 15 minute call. You can speak to a Chartered Financial Planner who will listen to your situation, give you an outline of what you need to consider and guide you in the right direction.
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.