‘I’m a money expert – you need take these three financial steps before you die’ | Personal Finance | Finance

Britons are urged to take proactive steps in their financial planning to prevent burdening loved ones with additional costs and taxes after death, as millions are believed to have no preparations in place.

Surprisingly, a recent survey by Canada Life, based on 2,000 UK adults, found one in three (33 percent) aged 55 and over do not have a Will.

Younger adults face an even greater risk, with nearly four-fifths (78 percent) of those in their 30s, and more than two-thirds (68 percent) in their 40s, admitting to lacking a will, despite four in 10 owning a property.

This means there are currently 31 million people who haven’t planned for what will happen to their assets – from the family home and pensions, to investments and personal assets when they die.

Experts at wealth management firm St James’s Place warn this lack of preparation can leave loved ones vulnerable and facing additional costs and stress during already challenging times.

Alex Loydon, director of engagement and consultancy at St. James’s Place said: “Planning for the inevitable and putting a Will or other legal instructions in place needn’t be considered morbid, expensive, or difficult to do.

“In fact, it’s one of the most responsible and caring actions you can take for your loved ones and there are a whole range of services and support available to help you get started.”

Ms Loydon said taking the first step “is always the most difficult” but once you put yourself as the benefactor in the driving seat, “you will likely feel more empowered” in the situation.

She continued: “Once you start and get comfortable communicating your intentions for your estate after you pass away, you may find you’re able to communicate these desires to your family, making them part of the process and ensuring your values are passed down along the way.

“Rather than let the fear factor creep in, try to remember that a Will not only provides peace of mind that the correct beneficiaries benefit from any estate distribution, but that it is also done as efficiently as possible, mitigating any risk of a family dispute after you have passed away.”

Ms Loydon shared three “essential” steps people can take to help better prepare for life’s uncertainties.

Life cover – safeguard your family’s financial future

Life insurance can protect the family’s financial well-being in the event of a person’s passing.

However, Ms Loydon said: “Simply having life cover isn’t sufficient. It’s crucial to ensure that your policy adequately reflects your family’s needs. Take the time to evaluate your current coverage, considering factors such as the rising cost of living and mortgage rates.

“Assess whether the coverage amount is enough to sustain your family’s lifestyle and fulfil financial obligations, such as mortgage payments and education expenses for your children.

“Regularly reviewing and updating your policy ensures that it remains aligned with your evolving circumstances and provides the necessary support for your loved ones, even in your absence.”

Power of attorney – empower a trusted advocate

Ms Loydon said preparing a power of attorney is “an essential component” of comprehensive estate planning.

She explained: “This legal document allows you to designate a trusted individual to make decisions on your behalf if you become incapacitated due to illness or injury. By appointing a power of attorney, you ensure that your wishes are honoured, and your affairs are managed in accordance with your preferences.”

Whether it involves managing finances, making healthcare decisions, or handling legal matters, having a designated attorney(s) can provide invaluable support during challenging times.

However, Ms Loydon noted: “It’s crucial to carefully consider your choice of attorney-in-fact and communicate your intentions clearly to ensure that your interests are protected, and your affairs are handled responsibly.”

Write a Will – secure loved ones’ futures

Drafting a Will is a fundamental step in estate planning that allows people to dictate how their assets will be distributed and their affairs managed after their passing.

Ms Loydon said: “Beyond asset distribution, your Will can outline important decisions such as guardianship arrangements for your children, ensuring their well-being and security.

“Taking the time to craft a comprehensive Will enables you to express your intentions clearly and minimise potential conflicts among heirs.”

However, Ms Loydon noted: “Estate planning is not a one-time task; it’s essential to review and update your Will periodically to reflect any changes in your life circumstances or wishes. By keeping your Will current, you can ensure that it continues to serve as a reliable blueprint for the future, providing peace of mind for both you and your loved ones.”

Ms Loydon added: “Preparing for the unexpected is not just a prudent financial decision; it’s a gesture of love and protection for your family. By taking proactive steps such as having a Will and life cover in place, you can provide your loved ones with peace of mind and security, even in the face of life’s uncertainties.”