Martin Lewis: We're all going to die - so make sure your finances are ready
PUBLISHED: 10:45 19 October 2018 | UPDATED: 10:45 19 October 2018
None of like to talk about it - but making preparations for your finances after death is essential, writes Martin Lewis of Moneysavingexpert.com.
We’re all going to die.
It may sounds like a street preacher’s placard, but it’s also a fact, and one that in our financial lives we need to accept and plan for.
Too few people do that though, and this can create nightmares for those left behind.
My aim is to be candid, blunt and unemotional. If you’re an adult, this time of year is perfect to get a will, as there are two big schemes.
And even more than a will, for many, is a power of attorney.
Where there’s a will, there’s a way…
A will is a legal document that lets you set out what you want to happen to your finances and assets when you die. Without one your affairs can be in limbo for years.
This is especially important if you live with your partner but aren’t married or in a civil partnership as common law rights don’t exist.
If you die your partner may not get the house – even if you’ve been together 37 years and have six children.
Equally, if you are married and have children from a previous marriage, your kids may miss out, as it’s the intestacy laws that dictate how your money is disbursed.
They depend on where you are in the UK, so use the tool at https://www.gov.uk/inherits-someone-dies-without-will to see.
Making a will can be costly, but right now, there are schemes that can help.
• October is Free Wills month
If you’re aged 55 or over (or, in a couple, one must be) then solicitors in over 40 locations in England, Wales and Northern Ireland will draft a will for you for free.
Enter your postcode on the www.freewillsmonth.org.uk website and call to book an appointment with one of the participating solicitors. They get busy so do this as soon as possible.
Charities pay for the solicitors’ time so expect to be asked to consider leaving something to charity in your will. You don’t have to, but do if you can. Perhaps leave at least enough to cover the solicitors’ fees– typically £100 - £150.
• November is Will Aid
This is a bigger scheme, right across the UK, open to any age.
The website www.willaid.org.uk (or call 0300 0309 558) lets you chose a solicitor to call and book an appointment.
Remember to say you’re calling as part of the Will Aid scheme.
They will ask for a donation of £95 (£150 for couples) to one of nine charities including Action Aid, NSPCC and the British Red Cross.
You can do it online before your appointment. Print out the receipt and take it to the solicitor. If you can’t afford it, you can give less.
There’s a range of other ways to write a will for less. See my guide at www.mse.me/freewills
Power of Attorney – more important than a will for many
Getting a Power of Attorney is possibly more important than a will.
When you die, the issue is dispersal of your money. But if you lose your faculties through, say, a stroke or dementia (one in three people develop this), don’t assume relatives can walk into the bank and access your money.
A Lasting Power of Attorney (LPA) would allow them to do that. You need to get one, now, while you have the mental capacity.
You nominate a trusted friend or relative to look after your affairs.
You’re not giving up control now. You choose for it to come into effect when you’re no longer capable. I’ve had one for years, and I’m 46.
If you don’t have an LPA in place and you lose your faculties, your family will need to apply to take over your affairs via the Court of Protection. This can drag on for many months and cost in the £1,000s.
If you have simple finances, you can set an LPA up yourself by filling in the online form.
• In England and Wales it’s at www.gov.uk and costs £82
• In Scotland it is www.publicguardian-scotland.gov.uk and costs £77
• In Northern Ireland it’s www.nidirect.gov.uk and costs £127.
If you have more complex affairs a solicitor can do it, though it can cost over £500.
There are some good halfway houses though and discount costs explained in my guide at www.mse.me/POA
You can also get a separate LPA specifically for health decisions, such as medical care and your daily care routine, should you be unable to make them for yourself.
• Martin Lewis is the founder and chairman of MoneySavingExpert.com.