Financially Preparing for the End



As morbid as it seems, death is an inevitable occurrence which requires serious financial preparation just as is required for various other milestones in life. By preparing, you are able to lessen the impact of your death when the time comes by minimising financial trauma for loved ones who are left behind. A study by the British Medical Journal interviewed 20 elderly people and found that 19 of them had funeral plans, and 13 had made a will – but you don’t need to wait until old age to put plans into place. The following tips for UK citizens outline the type of considerations you should be making when planning for the end. (Though steps for all people should be similar.)

Arrange a Will

Writing a will is perhaps the most important preparation that you can make and is something to consider doing even when in full heath. By organising your will well in advance, you are able to spare your family further distress in the immediate aftermath of your death while eradicating the possibility of any conflict between relatives that may arise when having to divide assets. Further to this, by taking care of your own will you can ensure that you are able to provide for those who are close to you but are perhaps not be bound by blood or marriage.

As well as organizing your will, it is also essential to collate important financial information and keep it somewhere safe so that it can be recovered securely by family when you are gone, as well as passing on passwords for all important online accounts.

Plan Your Funeral

More and more people these days are eager to define their legacy through their funeral. It may be important for some to have certain aspects of their funeral tailored to represent their beliefs and therefore it is best for these decisions to be made beforehand by the individuals themselves.

In addition to this, much like sorting your will, organising the details of your own funeral in advance will save your family from making harrowing decisions at an already difficult time. Funeral planning tends to go hand-in-hand with creating a will, with certain funeral plans combining both of these elements to ease the process.

You Can’t Take it with You

Frugality can become more entrenched with age and can be a cause of previous life experiences that have resulted in a deep-rooted saving mentality or simply hesitance to spend a hard-earned pension. However, it is important to acknowledge that you have a right to live as well as you can at every age and with pensioners enjoying better health than any generation before them, it is important to make the most of your riches while you are still well enough to enjoy them.

Further to this, having accounted for 47% of all UK consumer spending in 2015, pensioner spending massively bolsters UK economic growth and plays an integral role in keeping the British economy moving.

Financial Legalities to Consider

If you are still reluctant to spend however think you are unlikely to use everything in the bank during your remaining lifetime, it is key to plan how to distribute this wealth in advance in order to save on inheritance tax. Today, the inheritance tax threshold sits at £325,000 per person, with anything over this limit subject to a 40% tax bill.

There are, however, ways to reduce your inheritance tax bill legally with the most obvious requiring you to reduce your estate value to below the £325,000 threshold. This is why many people choose to downsize in later life and is extremely advisable if you are in a position to do so.

In addition to this, it is recommended to transfer all of your non-pension assets to fund your pension as they will no longer be included in your final estate valuation, ultimately avoiding inheritance tax. Pension pots can then be passed on tax-free to loved ones after a saver dies.

It is important for each individual to take care of their own financial decisions as far as possible however it may be worth imposing a Power of Attorney in order to prepare for a situation in later life in which you may experience loss of mental capacity. Such a position should be delegated to a trusted friend or family member who is knowing of your desires and wishes and has your very best interests at heart.

Join our newsletter


Subscribe to get the latest "Engineer Your Finances" content via email.

Powered by ConvertKit
About the author

Join our newsletter

Subscribe to get the latest "Engineer Your Finances" content via email.

Powered by ConvertKit Top Finance Blogs


SSCP   CAS-002   9L0-066   350-050   642-999   220-801   74-678   642-732   400-051   ICGB   c2010-652   70-413   101-400   220-902   350-080   210-260   70-246   1Z0-144   3002   AWS-SYSOPS   70-347   PEGACPBA71V1   220-901   70-534   LX0-104   070-461   HP0-S42   1Z0-061   000-105   70-486   70-177   N10-006   500-260   640-692   70-980   CISM   VCP550   70-532   200-101   000-080   PR000041   2V0-621   70-411   352-001   70-480   70-461   ICBB   000-089   70-410   350-029   1Z0-060   2V0-620   210-065   70-463   70-483   CRISC   MB6-703   1z0-808   220-802   ITILFND   1Z0-804   LX0-103   MB2-704   210-060   101   200-310   640-911   200-120   EX300   300-209   1Z0-803   350-001   400-201   9L0-012   70-488   JN0-102   640-916   70-270   100-101   MB5-705   JK0-022   350-060   300-320   1z0-434   350-018   400-101   350-030   000-106   ADM-201   300-135   300-208   EX200   PMP   NSE4   1Z0-051   c2010-657   C_TFIN52_66   300-115   70-417   9A0-385   70-243   300-075   70-487   NS0-157   MB2-707   70-533   CAP   OG0-093   M70-101   300-070   102-400   JN0-360   SY0-401   000-017   300-206   CCA-500   70-412   2V0-621D   70-178   810-403   70-462   OG0-091   1V0-601   200-355   000-104   700-501   70-346   CISSP   300-101   1Y0-201   200-125  , 200-125  , 100-105  , 100-105  , 1Z0-803  , 400-051   EX300  , CISM   100-105  , 000-106   400-201   642-732   220-902   70-410  , MB6-703   810-403   70-243  , CAS-002  , AWS-SYSOPS   70-462   70-410   2V0-621   LX0-103   70-461  , 220-902   1Z0-144   70-178   70-270   350-080  , 1Y0-201   1z0-808  , NSE4   102-400  , ADM-201   SSCP  , 200-125  , 640-911   000-104   640-692   300-320   350-060   000-089  , 000-017   1z0-808   700-501   1Z0-051  , 70-177   M70-101   300-209   70-461   3002   N10-006   VCP550   70-487   300-320  , 3002   700-501   NS0-157  , 1V0-601   CAS-002