Posted by As we age, we inevitably begin to consider how we will provide financial support for our loved ones after our death. However, how can you begin to safeguard the financial future of your family? In this post, we examine a few strategies for providing financial security for your family in later life.
Create a Will
Contrary to what you might believe, wills aren’t just for the rich; they are for everyone who wishes to have one and wants to ensure after they pass on everyone gets what they rightfully deserve. I’ve seen it within my own family, my grandma didn’t have a will and while she had no money, she had many possessions that held value that left my mother and her nine other siblings fighting over.
With a will in place, you can ensure that each of your kin is left with what you wish to be fair and to avoid any conflict in the future. But it’s also good to have in place in case you die before you thought you would.
In order to provide your executors with guidance on where to find your financial assets after your death, you can list them in your will, including bank accounts and life insurance policies like executive income protection and so forth. A letter of wishes, which might instruct your loved ones on how you’d prefer your money to be distributed after you’ve passed away, is another option to think about.
Name a Legal Guardian
Of course, protecting your family’s financial future isn’t the only reason to draft a will. You have the chance to designate a legal guardian who will take care of your children in the event that you pass away if you have any children under the age of 18.
The duties of a legal guardian encompass a wide range of financially related obligations, such as housing, food and nourishment, and emergency financial assistance. It’s worth noting that grandparents, siblings and stepparents have no automatic legal responsibility to your children, so you will need to write clear legal instructions on what should happen to your children should the worst happen.
It’s never a pleasant thought, but it happens and having a plan just in case of that event, you can rest easy knowing that your children are going to be in safe hands.
Appoint a Power of Attorney
This person could be a child of yours, a close friend or even your own parents, this is subject to change as you wish. Your power of attorney is usually someone you trust to make important decisions on your behalf, whether you are in a critical condition or are at some point not in sound mind. This could include what you do with your property, where you live and much more.
Read: The Hidden Price Of Bad Financial Guidance
Gift Money
While this might not be an option that is widely available to everyone, gifting money is the perfect way to dodge inheritance tax. It’s not fair that you work all your life and finally want to give your family the headstart you weren’t so lucky to have and it is cut in half just because you’ve passed on. Look into gifting your family money before you pass it on and this way you and your family can reap the benefits.
With an annual exemption, you can gift up to £6,000 pounds within a two year period.
Consider Life Over 50s Life Insurance
With a maximum payout of £10k, over-50s life insurance may not be enough to guarantee your family’s financial stability, but it can be used to cover burial expenses, a little gift, or some outstanding debts. However, it might not pay for the entire funeral expenses. You have the option to upgrade to the Funeral Benefit Option, which would give you an additional £250 to help with funeral expenses. Your funeral arrangements will be handled by a Dignity Funeral Director, and the funds will be sent directly to Dignity Funerals Limited.
Additionally, you can guarantee that your family receives the money promptly and without having to go through drawn-out legal proceedings when you pass away. To ensure this, transfer the life insurance policy into a trust. As it won’t be deducted from the value of your estate, this may also reduce the amount of inheritance tax they must pay.
Look Into Business Insurance Policies
Depending on what sector you work in and your status within the company, you could look into securing your family’s future in case of any sudden and unforeseen circumstances. In modern society, it definitely takes two incomes to raise a family so when one just stops, it can have huge implications for the family.
Look into policies that your company or insurance companies may offer, such as keyman insurance or relevant life insurance, where a lump sum is paid to your family so they can navigate their lives.