E20: What to do when someone dies with Simon Levy, Justin Harper and Jaypee Soule
The following’s a transcript of our monthly podcast, The Pension Confident Podcast. Listen to episode 20 here, watch on YouTube, or scroll on to read the conversation.
PHILIPPA: Welcome back to The Pension Confident Podcast. My name’s Philippa Lamb. Now, as we all know, there are only two certainties in life - death and taxes. We’ve talked a lot on the podcast about taxes. So today, we’re going to talk about the one no one really wants to talk about - death. And more specifically, how to avoid all the financial complications that your death, or the death of someone close to you, can leave behind.
Sorting out the admin when someone passes away can be a slow, expensive business if they didn’t have good arrangements in place. So, we’re going to talk about how you can streamline that process by doing a few simple things in advance, right now. And to talk us through that we’re joined by three expert guests.
First up, with the Free Wills Month campaign coming up in October, what better time to speak to one of the solicitors involved? Simon Levy from Frank Brazell & Partners. Welcome Simon.
SIMON: Hello, nice to be here.
PHILIPPA: Next up, Justin Harper, CMO of the independent life insurance broker; LifeSearch. Nice to have you with us.
JUSTIN: Hello, delighted to talk about this important topic.
PHILIPPA: It is, isn’t it? And finally, from PensionBee, we’ve got the Head of Second Line Compliance and the former Chairperson of the company’s Death Committee, Jaypee Soule. Hi Jaypee.
JAYPEE: Hi, lovely to be here.
PHILIPPA: The Death Committee sounds very sinister. I think we’re gonna have to ask you about that later. It’s not as bad as it sounds?
JAYPEE: It’s not as bad as it sounds.
PHILIPPA: The usual disclaimer before we start, please remember that anything discussed on the podcast should not be regarded as financial advice. And when investing your capital is at risk.
Just to open with, I have personal experience of this myself. I had to organise my mother’s funeral last year. I was amazed by how expensive everything was. Have any of you had experience of this?
JAYPEE: I have, last year as well.
PHILIPPA: Sorry to hear that.
JAYPEE: And it’s really, really expensive.
PHILIPPA: Yeah. Justin, have you ever had to do this?
JUSTIN: Yes, I have. When my father passed away. So, it was expensive and you don’t realise what other expenses are incurred at the same time. It’s not just a funeral. There are other things, too.
PHILIPPA: Yeah. According to SunLife, it can all wrap up to about £9,200, which is a lot of money, isn’t it Simon?
SIMON: It’s a lot of money. We’re sometimes appointed executives, so we have to arrange funerals for people. And there was one person I arranged for, from a hospice. He had hardly any money. The cheapest funeral we could arrange, because he had hardly any money to leave, was about £2,500 and that ate into most of what he had.
FINANCIALLY PREPARING FOR YOUR OWN DEATH
PHILIPPA: Yes, we’ll talk more about funerals later. First though, thinking about how you can prepare in advance. Should we start with what we can do to help out our loved ones? How can we make their lives as easy as possible, basically, from a financial perspective? Justin, we hear this term ‘estate planning’ used a lot, don’t we? When we talk about leaving things behind. What does that actually mean? What’s your estate?
JUSTIN: Your estate, very simply, is everything you own. So it’s the money you have, your property, which is usually your home, your possessions and your investments. Everything you own, that’s your estate. Estate planning’s around how you want to organise your estate and who you want it to go to when you die.
PHILIPPA: Ok, and Simon, can we have a definition right at the top of executor and beneficiary, because we hear those words a lot too.
SIMON: If you write a will, you have to appoint somebody - one or more persons and sometimes an organisation if you like - to administer the will and to put into effect your wishes. That person’s called the executor, or the executors, because they execute your wishes. The people who you leave things to - who you leave your Picasso to if you like - would be the beneficiary.
PHILIPPA: Got it. Ok, always good to kind of get the basics out of the way. Keeping all the paperwork organised is really the first step, isn’t it?
SIMON: Yes, my first instruction to everybody I write a will for is - don’t lose the will! It sounds silly, but you’d be surprised. People think that once you’ve done your will, that’s it and they forget about it. And then 20 years later, either they want to change it and they can’t find it, or they die and nobody else can find it.
PHILIPPA: Ok, got it. So Jaypee, how about tips for the best way to keep our money and assets organised? Because it isn’t just the will, is it? It’s everything to do with our financial situation. And I’m thinking keeping your paperwork in good order right from the start has got to be really helpful.
JAYPEE: Definitely. I always say, make sure a close loved one or someone you really, really trust, knows where to find all your paperwork. Or you could use, you know, a password saver software where you can keep all of your passwords. Because I think that’s usually the difficult thing. The last thing you want is people not being able to log into your social media accounts or your bank accounts or email, and the likes.
PHILIPPA: The other thing that comes to my mind is, I mean, you touched on this a bit, is having honest conversations with family and letting them know your plans. I think a lot of people just don’t talk about it all, do they? Is that your experience?
JUSTIN: Yes, in a previous organisation I worked for, we did some research about this called The Last Word, which is about people having that difficult conversation. And very, very few people have had that conversation. So it leaves a real sense of doubt and worry for their dependents on those difficult moments.
PHILIPPA: Did you get into why?
JUSTIN: One reason is that you might be fearful of upsetting someone. There are a certain proportion who do fear they’re tempting fate by talking about death, but it’s gonna happen!
JAYPEE: It’s a very, very touchy subject to discuss because people don’t want to talk about death. So, I’d joked around before my mum passed and I kind of said, ‘make sure you get your affairs in order so that it’s easier’. And she’s like, ‘are you trying to get me out of here or something?’ But no, I just wanted her to be more organised.
PHILIPPA: Yeah, and as you say, you mentioned social media accounts and online stuff. I use a password vault for that because all my passwords are alphanumeric strings, like we’re always told they should be. And so obviously they’re impossible for anyone else to know or access. The one I use, and I’m sure it’s true for most of them, you can set up so that someone gets access to that vault on your death. But I’m not sure most people do that. Because the other question on my mind, and actually I must admit, I hadn’t really thought about this before, is email and social media accounts. What happens to them when you die?
JAYPEE: Some social media platforms do something, but you have to let them know the person’s passed away, because otherwise they would have no idea. And they give you two options. So you could either take the page down completely or you can memorialise the page. So it can be done, but I think what’s important is making sure people who are close to you can get access to your social media in order to report it.
PHILIPPA: So that’s a thing to set up in advance, isn’t it? Because there’s no way I’m logging into anyone’s social media account to do the things you’ve just described. So that needs to be set up in advance?
JAYPEE: It does, yeah.
PHILIPPA: And presumably the same thing applies with personal online stuff that, to be honest, you don’t want shared? Setting up protocols for accounts to be obliterated and erased on your death.
JAYPEE: Absolutely. Again, those are things that people don’t think about. And they probably should. Like emails - for older people or old school people, like me - your email tends to have loads of documents and other important stuff you’ve had over the years. I don’t think anybody ever goes into the email and cleans it out. You could have your entire life’s secrets, so to speak, in your personal email. Most importantly, perhaps you should write a list of things that you’d like people to do for you.
PHILIPPA: So Simon, beyond these key practical steps around data, what else can you do to prepare on the legal front? I suppose I’m thinking about things like trusts and powers of attorney, and things like that.
SIMON: Well, lasting powers of attorney are very useful tools.
PHILIPPA: Can you just explain what they are?
SIMON: Yes, certainly. A will only takes care of things after you die. Lasting powers of attorney envisages a time where, if you lose your mental faculties, somebody can look after your affairs. If you do lose your mental faculties and you haven’t got a lasting power of attorney, it’s very difficult for a spouse or children as the bank won’t deal with them.
PHILIPPA: Yes, that’s the difficulty, isn’t it? There’s two sorts in the UK, aren’t there?
SIMON: Indeed, there are two sorts. There’s finance and property, and there’s health and welfare. The finance and property one deals with monetary matters, and the health and welfare deals with things like care homes. Which care home you should go to, operations, whether you turn machines off, etc.
PHILIPPA: So, essentially you pick a person you trust. You don’t have to have both. You can have one just for financial matters or for health or for both. It doesn’t have to be the same person, does it?
SIMON: It’s a bit like executors - you can have as few or as many people as you like.
PHILIPPA: I mean, this sounds great in the sense that we never really know what’s ahead for any of us, do we? So it sounds like a smart idea. And as you say, it makes things so much easier for our family because they know they can look after us properly and access money for whatever it might be. So, I’ll tell you something else I came across and that was a letter of wishes form - what’s that?
SIMON: A letter of wishes is exactly what it says. It tells people what you would like to happen. If you have something which is very valuable -
PHILIPPA: So, say it’s your Picasso?
SIMON: Yes. You want to make sure it gets to your favourite person and if it’s in the will, then they can sue if it doesn’t come to them. But a letter of wishes is different. If you have personal effects, which aren’t particularly valuable, but you’d like them to go to somebody and you don’t want to specify everything in the will - you keep a list that says ‘I would like this to go to this person’. But nobody can legally enforce those wishes.
PHILIPPA: So, thinking about my earring collection. It’s not valuable, but I like them. If I wanted to leave them all to specific nieces or something, that would be a letter of wishes thing, rather than doing a long list in my will?
SIMON: If it’s not that valuable, I’d think it’s probably easier to just put it in a letter of wishes. You can write that you want these earrings to go to this person - otherwise the will becomes long.
PHILIPPA: Got it.
JAYPEE: Also, I think a letter of wishes can cover things like how you want to be buried or say, the type of casket that you want, or what you want to wear.
PHILIPPA: Music at your funeral, that sort of thing?
JAYPEE: Music at your funeral, sitting arrangements, all the things that you wouldn’t put in a will.
PHILIPPA: Ok, well since you mentioned funerals, what about prepaying for your own funeral? I’ve got some data from the Financial Conduct Authority (FCA) that says over 200,000 people prepaid for a funeral plan in 2021. Has anyone around the table done that? I’ve not done that.
JAYPEE: No, but I think it’s a brilliant idea.
PHILIPPA: No downsides?
JUSTIN: There are some things you need to think about. First of all, you need to have the money up front. One thing to be aware of is, if you’re going to move or move abroad, then sometimes your plan won’t come into effect. And also, you’re choosing a funeral director, typically. So, you’re working with them and choosing your funeral with them. Although some have a network of funeral directors across the UK. So one to be wary of, but a very good idea to make sure that legacy and debt, as such, doesn’t fall upon your loved ones.
PHILIPPA: And again, I think it’s important to tell someone. There’s no point doing that if your family doesn’t know you’ve done it.
SIMON: It’s worth noting as well that, if you die and there’s money in your bank account, the banks will allow you to pay for the funeral from those accounts.
PHILIPPA: Ok, so it’s not as if the people left behind have to struggle and think, ‘well, I just don’t have the money for that’.
SIMON: These days most banks will release money to pay for the funeral.
PHILIPPA: Ok, that’s good to know. Justin, it seems to me this might be a good time to talk about the pros and cons of life insurance. I mean, what exactly is it? I know it sounds like a basic question, but how does it work? Why should we consider it? Because, obviously, it’s a thing you have to pay for.
JUSTIN: It is indeed. So we’re all gonna die, we know that. The wonders and benefits of life insurance are simple. You pay a small amount of money every month and then at the end, either when you die or at the end of the term, you get some money back. The insurer pools all the different premiums from all the different policy holders. So they have that big money in case you die. So, you can take out a policy today and if you die tomorrow, as a result of an accident, it’ll pay out the full amount. Those are the sort of things you can’t save for, so insurance plays a valuable role.
PHILIPPA: Simon, I want to talk about tax, which is the other certainty in life. Because this brings us to inheritance tax, doesn’t it? Obviously, it’s lovely when you’re left something from a loved one. But, who has to pay inheritance tax? How does that work?
SIMON: Anybody who has an estate under _iht_threshold doesn’t have to pay inheritance tax.
PHILIPPA: So this is everything? Everything you own that adds up to that?
SIMON: Whereas if you live in London and you own a garage, you’re probably over the _iht_threshold limit. So, once you become liable for inheritance tax, you’re taxed at _higher_rate. Now there are exemptions. If you leave any money to charity, that’s not taxable. If you leave money to a spouse, that’s not taxable either. When Mr Osborne was Chancellor, instead of raising the level, because it’s been that _iht_threshold level for over 10 years now, it’s been frozen until 2028, so more and more people are caught by it.
PHILIPPA: As house prices rise?
SIMON: Yeah. So, instead of raising that level, he brought in this idea that if you leave your property, in which you have resided in, to a direct descendant, then you get basically an extra £175,000. So your inheritance tax limit can be up to _higher_rate_personal_savings_allowance,000. And it’s important to know that if you leave it to a spouse and you don’t use up your level of inheritance tax, then that rolls over. So if you have a house which you’re going to leave to your children and your spouse has died before you, then there’s in effect a £1 million exemption.
PHILIPPA: Ok, but how about legacies? If you think, ‘I’m going to divide up what cash I have on my death between my loved ones’ and you want to leave, say, _starting_rates_for_savings_income or _money_purchase_annual_allowance, whatever it is. If you want to leave it to someone, do they have to pay tax on that?
SIMON: Normally speaking, the tax is paid from the estate and then you divide up the legacies afterwards.
PHILIPPA: OK, got it. Jaypee, pensions are important here, aren’t they? Because they fall outside of your estate. You can’t put them in a will, is that right?
JAYPEE: Your pension isn’t usually covered by your will. It sits outside of your estate. So, it’s important to make your pension provider aware of what you’d like to do with your pension if you pass away. At PensionBee, you can log into your online account - what we call The BeeHive. In your account settings, you should be able to put down who you’d like - and it could be one or more people - to get your pension. You need to make them aware, because the decision of who your pension goes to is at the absolute discretion of the pension provider. So, it’s important to go and add your beneficiaries to your account. Make sure we know who you want your pension to go to.
You can mention your pension in your will if you want to eliminate any doubt over your wishes, but it’s recommended that you still contact your pension provider to add your beneficiaries to your policy.
PHILIPPA: And you can leave your pension pot to more than one person, can’t you? It doesn’t just have to be one.
JAYPEE: Absolutely, you can leave it to as many people as you like.
PHILIPPA: So what happens if you don’t do that and you die? And there’s your pension pot, which might be a very considerable sum of money, if you’ve had a pension for a long time. Where does that money go?
JAYPEE: It remains unclaimed.
PHILIPPA: In your experience, are there lots of occasions where people haven’t specified who they want their pension pot to go to?
JAYPEE: Absolutely. I think the majority of people don’t think about it.
PHILIPPA: You’re kidding me! So, people save their whole lives and the money just sits around when they’re gone?
JAYPEE: If you haven’t specified a beneficiary, it doesn’t mean that the money’s gone. We’ll wait to hear from a family member and that’s why it’s important to have experts in the committee, because then we do a fact finding exercise to make sure that we can gather as much information as possible to figure out who you’d have wanted your pension to go to.
PHILIPPA: Yeah, so again, it’s another instance of where, if you’ve got a pension, you need to be telling your loved ones that you’ve got one.
JAYPEE: Absolutely, you need to let them know you’ve got one. I’d say just add their names and make sure you keep it updated. That’s very, very important.
PHILIPPA: Just back to tax, Jaypee. What are the tax implications of leaving your pension to someone?
JAYPEE: If you’re younger than 75 and you haven’t started drawing down from your pension, then all of your pot can go to a loved one completely tax-free. If you’re 75 and above, then you get charged tax on the marginal rate of the beneficiaries income tax.
PHILIPPA: Ok, so if the person getting the pension pot’s paying tax at the minimum rate, that’s what they’ll pay tax on?
JAYPEE: That’s right.
PHILIPPA: Ok, and if they’re a higher rate taxpayer, that’s what they’ll pay?
JAYPEE: That’s what they’ll pay.
WILLS, WILLS, WILLS
PHILIPPA: Let’s move on. Let’s talk about wills. Simon, as I understand it, only 44% of people have one. I’m confidently expecting that everyone around the table’s got one. Yeah, everyone’s nodding. That’s good! I’ve got one. But lots of people don’t have one. Can we just start with a legal definition of what a will is? What counts as a will?
SIMON: A will, basically, is your desires after you die. And for it to be legal, it has to be dated, signed and witnessed by two people. It can be written on anything. The danger of wills is ambiguity. So you have to be clear on what you want. What you don’t want is - if you leave everything to be divided amongst your children, and suddenly somebody else pops up and says, ‘I was a child of the person’.
PHILIPPA: So you’re essentially saying you can write your own? Because obviously there’s a cost attached to getting someone else to do it. Is that a good idea, really?
SIMON: Well, I’m saying because of the problems that can arise, the answer is, I would’ve thought, probably not. Look, it can be better than nothing. But on the other hand, it can cause lots of problems.
PHILIPPA: I’m thinking of Aretha Franklin. She had a whole bunch, as I understand it, of handwritten wills. There was one stuffed down the back of her sofa or something! And there was huge amounts of conflict about which of her kids inherits this, presumably, enormous estate. That did make me think it’s probably not such a good idea. Or at least if you do write one yourself, again, it needs to be kept somewhere safe, right?
SIMON: Yes, you’ve got to know where it is.
PHILIPPA: Absolutely, ok, I’m going to ask, how did you two do your wills? Justin?
JUSTIN I did a combination. I downloaded my own and we wrote it as a family when our children were born. So, that was an important point in our lives as we needed to understand what happens to our kids should either of us pass away. And then we did seek legal advice as well, which was very affordable and gave us real peace of mind. And we have updated it as well.
SIMON: Yes, unlike puppies, a will isn’t for life. You have to keep looking at it every few years to make sure it’s still applicable.
PHILIPPA: I’m going to ask you about that in a second! But first I want to ask Jaypee how she did her will?
JAYPEE: At a solicitors.
PHILIPPA: Yeah, me too. And it wasn’t cheap, I have to say. But, there’s Free Wills Month, isn’t there? Which we definitely do need to talk about. That’s in October, how does that work?
SIMON: Well, the Free Wills Network has two months of the year - October and March - when there’s a Free Wills Month. And you can apply if you’re over 55 to get a will done for free. During the rest of the year, there are charities where anybody of any age can apply to get a will done for free. You just have to fill in a form with a solicitor and you can do that the whole year round. The caveat is that the wills have to be, what we call straightforward or simple wills.
PHILIPPA: So no complicated trust funds then?
SIMON: It’s up to the solicitor to decide what they think is complicated or not. My normal measuring stick is that it should take half an hour of instructions and then half an hour to draft. If it takes longer than that, I’d say to you that we’d normally charge this amount, the Free Wills Month will pay us that amount and this is the difference. Do you want to carry on or not?
PHILIPPA: And if people want to do this, if they’re thinking ‘ok, I’m listening to this podcast and I should definitely make a will’, then next month’s a good month to do that? They just Google ‘Free Wills Month’, do they?
SIMON: They do. There are various solicitors who join in for those particular months.
PHILIPPA: Let’s go to intestacy. People dying intestate, with no will. What happens?
SIMON: Well, there are laws of intestacy. These days, if you have a spouse, they get the first £250,000 and half of the rest of your property. If you don’t have a spouse, the rest of it goes to your children first. If you have children and they die before you, then it goes to their children. But if you haven’t got children, then it goes to your parents. If you haven’t got parents, it goes to your siblings. And if your siblings have died then it goes to their children.
PHILIPPA: I’m guessing this all takes a long time, though. Is that right, Jaypee? If people die intestate? As you say, there are protocols around who gets what. But I bet it’s not quick, is it?
JAYPEE: No, it’s not.
PHILIPPA: What sort of time are we talking about?
JAYPEE: I mean, it depends on how quickly they can get us what we require. Because our goal is to figure out what our customer would’ve wanted for their pension. At PensionBee, we’ll contact really close family members and ask, ‘what would this person have wanted?’ Was there something that they were paying off? Is there anyone that’s financially dependent on them? Because if there’s no will, then we don’t know what you would’ve wanted for your money.
PHILIPPA: Because it’s interesting, looking at some data from the National Wills Register, which says 49% of people said their parents didn’t leave any instructions. 58% of people hadn’t talked about this at all and said they were unlikely to do so in future. Which doesn’t sound like a good idea, does it? I mean, if you’re not talking about it, you probably do need to be talking about it. And as I said, less than half of all the adults in this country have actually made a will at all. So there’s a long way to go on this, isn’t there Simon?
Actually, as we’re talking about the National Wills Register, that brings me to an interesting point. It’s all very well writing a will and putting it in a box, but what if people can’t find it? Can you register it?
SIMON: If you can’t find a will and you know there was one, there’s a presumption that the person has destroyed their will and therefore they will die intestate. It’s a rebuttable presumption.
PHILIPPA: So you can argue it?
SIMON: You can argue it. But, if you want to change your will or get rid of it, you can just destroy it and you won’t have that will anymore.
PHILIPPA: So what’s the most sensible, safe thing to do with your will when you’ve written one?
SIMON: Everybody has their own ideas on this, I think. You can store it in some places, but they’ll charge you for doing it. I can’t see the point. My old partner used to say, ‘get a tin box and put it in there’.
PHILIPPA: That sounds very low tech?
SIMON: Yeah, well he was very low tech! But on the other hand, we have a safe in one of our offices where some people ask us to store their wills. We can do it, but we can also get burgled or flooded or whatever - the same as anybody else can as well. And also, if you put it with your solicitor, how are your loved ones going to know where your will is?
JAYPEE: Quite a few people leave video wills.
PHILIPPA: This is new to me! What’s a video will?
JAYPEE: So, it’ll be a video of themselves saying this is what I’d like. I’ve heard of people doing it, but I’ve never actually processed one myself. So I wonder whether it would have the same validity as having a proper written will. I doubt it would?
PHILIPPA: That’s a good question for Simon?
SIMON: I’m sure it’ll come, that you’ll be able to do wills online or whatever, but at the moment, as far as I know, it has to be a document that’s signed and witnessed.
JUSTIN: I think it just reinforces the importance of not only making a will but also having that conversation as well. And yeah, you’re right actually, Jaypee. We don’t quite have a tin box, but we’ve got an expandable folder where literally all our documents for the household live.
PHILIPPA: I was gonna say - I don’t want to be nosy but, where’s your will?
SIMON: I think the idea of the tin box was in case there was a fire.
JUSTIN: Yeah that makes good sense.
PHILIPPA: I keep mine in a fireproof box. But I keep a copy with my solicitor too.
JUSTIN: One of the advantages of having professional advice is, at least they’ve got it. But you need to tell somebody.
PHILIPPA: What about you, Jaypee? Where’s yours?
JAYPEE: At home.
PHILIPPA: Just kicking around at home?
JAYPEE: Just kicking around, so maybe I need to think about investing in a tin box!
JUSTIN: There’s a really good idea from Age UK actually. So, they offer a whole host of guides and support, but one of the things I stumbled across there the other week was something they call a LifeBook, which is exactly that. So it’s a very simple, online, downloadable document, which you can either print off or send to your dependents. It captures all your personal details, all your financial details, your bank accounts - not the passwords - but the bank accounts. And at the end, it offers you the opportunity to leave a message to your dependents as well. All in one simple document. It’s a great tool.
PHILIPPA: That, I’ve got to say, sounds like a great idea.
WHAT TO DO WHEN A LOVED ONE DIES
PHILIPPA: We need to wrap this up. But I do want to just get into that big question of if you’re having to deal with someone’s estate and there’s no will. Maybe the admin and the paperwork is all just in chaos. What are the things you actually have to do, legally or rationally? You have to register the death, don’t you?
SIMON: You have to register the death, yes.
PHILIPPA: And where do you do that?
SIMON: At the registry for the local authority.
PHILIPPA: And then you can get death certificates?
SIMON: You’ll get the death certificate in most instances, unless there’s any problems with the death or anything.
PHILIPPA: And you have to pay for those, don’t you?
SIMON: There’s a fee, yes.
PHILIPPA: In my experience, you can do nothing without death certificates. No bank, financial institution or pension fund will talk to you until you have one. So that’s a requirement.
JAYPEE: A death certificate is the first document that we would want to see when someone passes away, because it’s evidence that the person has passed away.
PHILIPPA: So Simon, you mentioned the Tell Us Once service. This is a government service, and I think there’s various commercial ones as well. I used this. It’s absolutely brilliant. Can you just explain how that works?
SIMON: Yes, you just go online and put in the details of the death, and it tells all the government departments with which the deceased was connected to, so the Department for Work and Pensions (DWP) and the Passport Office etc, that they’ve passed away. So you don’t have to inform them all separately.
PHILIPPA: And it also, from memory, covers things like Council Tax. So it’s anything in the public sector, isn’t it? And, obviously, when you think about it, there’s a lot of stuff. We’re all very embedded in the public sector. All those organisations - the Tax Office, everyone, they know that someone has passed away. I personally did find that incredibly helpful because tracking down how to contact those organisations, and then having to say again and again and again, ‘my mum has passed away’, it’s a really terrible thing to have to do. There’s enough people to tell as it is. But it’s important to understand there’s no equivalent for financial institutions, is there? So your banks, your building societies and utilities - that’s right isn’t it, Jaypee? You just have to phone them up. There’s no quick way that I missed?
JAYPEE: Not that I’m aware of. You just have to contact the financial service provider, let them know what’s happened, provide the death certificate and ask what the requirements are to get the proceeds paid out, and then follow that all the way through.
PHILIPPA: Legacies can’t be paid out, Simon, can they? Until you have a grant of probate. Now, what’s that exactly?
SIMON: Well, again, it depends on how big the estate is. So, if you have a very small estate - for example, if you die and you’ve _isa_allowance in one bank account. Then you probably won’t need to get a grant of probate. Because the bank will allow the executor to withdraw that money on production of the death certificate -
PHILIPPA: And spend it on a funeral or legacies or whatever?
SIMON: Provided they sign an indemnity so the bank won’t be liable if somebody else comes along and has a different claim. But, when there’s a substantial amount of money involved, the executor won’t be able to get their hands on the money without a grant of probate. The grant of probate’s just a small document saying, ‘this person has died, the probate has been granted, this is the executor, the gross estate is £1 million and the net estate is £800,000’. And that’s all it says on it.
PHILIPPA: This does make me realise, as we said at the top, that getting organised is going to save you or your loved ones a lot of aggravation when the time comes. And the conversation we’re having is really embedding that idea for me. Because it just goes to show how much there is to think about. And also, the sense I get is that most people don’t know this stuff. Is that your sense?
SIMON: Yeah, I think most people don’t know about most things until they actually come into contact with it. So if somebody close to you passes away, then you start realising what you need to do.
PHILIPPA: At the worst possible time.
JUSTIN: When you’re in bereavement, as I’ve been and you’ve both been, you’re just not in a mental state to deal with any financial or practical matters. It’s difficult enough as it is dealing with the emotions. So, by actually putting some plans in place and communicating those plans, I think you’re really looking after your loved ones once you’ve gone.
PHILIPPA: Thanks everyone. As we say, this can feel like a difficult subject to talk about. But as we said at the start, it’s one of life’s certainties, and getting organised and knowing that you’re making everything easier for your loved ones after you’ve gone, it’s a nice feeling.
Next month, we’ll be talking about building financial confidence.
Finally, before we go, please remember anything discussed on this podcast should not be regarded as financial advice on when investing your capital is at risk. Thanks for listening.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
Period | Market Event | FTSE World TR GBP (%) | 4Plus Plan (%) |
|---|---|---|---|
4Plus Plan’s inception – 6 Sept 2013 | QE Tapering, China Interbank Crisis and its aftermath | -5.44 | -2.41 |
3 Oct 2014 – 15 May 2015 | Oil price drop, Eurozone deflation fears & Greek election outcome | -5.87 | -1.77 |
7 Jan 2016 – 14 Mar 2016 | China’s currency policy turmoil, collapse in oil prices and weak US activity | -7.26 | -1.54 |
15 June 2016 – 30 June 2016 | BREXIT referendum | -2.05 | -1.07 |
