What happens when I lose a loved one?

If you were to die, organising your financial affairs could be a difficult process, especially when those close to you are grieving.

That’s why our financial advisers recommend you set up a detailed plan in the event of your death.

A plan can prevent disagreements and conflict amongst your family members and ensure your intentions for your money and estate are carried out.

If in doubt as to how to proceed with making sure your last wishes are carried out, our Independent Financial Advisers including our Wills and Lasting Powers of Attorney practitioner can help you formulate a plan for your legacy.

If you are person who has had someone close to you pass away without a plan in place, here are four steps you can take to put their finances in order.

1. Don’t do it alone

Coping with the sadness of someone close to you dying can be a stressful time. The last thing you might be thinking of is your loved one’s money and property. You will probably just be missing them and wishing they were still with you. Enlist the help of a family member or friend to be by your side when going through the tough time of dealing with the practical side of someone dying.

Remember, you don’t have to deal with your loss alone. Financial decisions are almost always tied up with life changes and can be emotionally and psychologically challenging. Our Independent Financial Advisers can help you navigate areas such as Inheritance Tax, Wills and Lasting Powers of Attorney (LPAs), and put together a financial plan on how to manage any inheritance you may have received.

2. Request copies of the death certificate

When a loved one dies, you will need multiple copies of Death certificates which serve as legal proof throughout the process of managing the finances of the deceased. You can obtain them through the Registry Office

A death certificate will be required for:

• Closing financial accounts
• Transferring property
• Applying for insurance benefits

3. Financial documents

You will need to collate the following financial documents:

• Bank and investment account statements
• Retirement account statements
• Insurance policies
• Mortgage and loan statements
• Tax returns
• Utilities and bills

As many statements and communications are issued online, gathering the documents cited above may be tricky. People sometimes keep a record of their passwords and usernames in a safe place which can help when tracking down and closing bank accounts and reoccurring subscriptions. A copy of the death certificate is vital in the event you don’t have the necessary information to access accounts and statements.

3. Declare the death to the relevant organisations

You will need to report the death to the following bodies:

• Employer of the deceased
• Insurance providers
• Bank or Building Society
• DVLA (if they held a driving licence)
• HMRC
• HM Passport Office

4. Deal with any debts

Co-signed loans

Mortgages and car loans often fall into this category. In most cases, the person inheriting the assets such as a home or car will continue to make the repayments or sell the assets and clear the debt.

Unsecured loans

Credit cards and some unsecured loans are often paid off by the estate but if the deceased hasn’t left sufficient funds to pay the balance of the loans (this often applies to credit cards), the debt may be waivered by the loan provider.
If you have co-signed the loan or hold a joint account with the deceased, you will still be responsible for paying the debt. In all cases you will need to stop using the credit cards (if you are one of the authorised users) and notify the credit card providers about the death of your partner or family member.

Student loans

When the borrower of the student loan dies, the Student Loan Company cancels the loan regardless of how much is owed. You will need to provide them with evidence of the death with the following:
• The deceased’s Customer Reference Number
• Evidence of the death

We recommend you get advice from an Independent Financial Adviser as to how to manage any debts that might be outstanding.

If the information provided has been of interest and prompted you to think of your own finances when you pass away, our Independent Financial Advisers can help you make a plan to pass on to your loved ones in the event of your death. It may be an uncomfortable conversation to have with those closest to you but preparing for all eventualities can be the best gift you give to them, when you depart.

Lloyd & Whyte (Financial Services) Ltd are authorised and regulated by the Financial Conduct Authority. It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. We cannot assume legal liability for any errors or omissions it might contain.