It may not be the most enjoyable topic of discussion, but if you own a business, any property, or any assets of value, then you should be thinking about what happens when youโre gone. At least, you should give it enough consideration to make sure that you provide for those you love or who depend on you. Make sure that you factor your post-life plans into your budget, but you may at some point find out that you didnโt set aside enough to pay for everything you want.
Think about your loved oneโs future costs
There are real-world expenses that your family is likely to face once youโre no longer in the picture. These can include funeral costs, outstanding debts, day-to-day living expenses, and potential care or housing needs for dependents. Taking care of your obligations now can make sure that your family doesnโt have to go out of pocket to effectively clean up any messes that you have left behind. Be sure to think about any family members that might need support for longer-term goals, whether itโs education costs, mortgage payments, or taking care of those in a care home, for instance.
Taking out the right life insurance policy
Of course, many of the costs mentioned above can be handled, in part or in full, by a life insurance policy. You may want ot set money aside for immediate access, but your life insurance policy should cover essential costs like funeral expenses, mortgage repayments, or daily living needs. There are different kinds to suit different needs, as well. Term life insurance is often the most affordable, offering coverage over a set number of years, which can be ideal for those with young families or mortgages. Whole-of-life insurance, while more expensive, guarantees a payout no matter when you die. Think about how much money your family would need to maintain their standard of living and ensure that your coverage amount reflects that, including the impact of inflation.
Handling your estate
The costs of executing your estate can vary depending on how you handle it. Perhaps most important is the cost of writing your will. DIY wills are relatively inexpensive, but also rife with potential for errors that could render them null. The legal precision offered by a solicitor like Hale and Hawthorn ensures your will is clear, legally valid, and tailored to your specific situation. If your estate is more complex, such as if youโre a business owner or have properties abroad, your costs may go up. Similarly, if you want to set up a trust or you want your solicitor to act as a witness or even the executor of your will, that will cost extra. However, many are willing to pay for the peace of mind knowing that an impartial and trusted third party is taking the stress of handling the estate away from their loved ones.
What if you donโt have insurance?
If you donโt have insurance, then you may have to put aside from your budget for your final expenses. The average cost of a funeral is rising, and can reach anywhere up to ยฃ5000, getting more expensive depending on your location as well as any special considerations you want to consider. Then there are costs like flowers, catering, and venue hire for any memorials. Setting aside money in a dedicated savings account or purchasing a pre-paid funeral plan can help you take the stress of arranging it away from your family. Just make sure that your executor knows where any funds are kept and how to access them quickly when necessary.
Keeping records
Even the most thorough financial planning can fall apart if no one knows where your documents are or how to access them. A key part of budgeting for after your death is maintaining clear, up-to-date records of your assets, accounts, life insurance, pension schemes, and outstanding debts. You may be able to find and use free options, such as with Google Docs, to keep account numbers, contact details, and key instructions safe. However, if you want to pay for a secure digital vault, then you should factor that into your budget as well.
Making sure that your loved ones are taken care of and your wishes are fulfilled should be all the incentive you need to make sure that you put aside enough money for what happens after youโre gone. A little extra research and expense are likely needed if you have any complex assets or want to set up trusts, too.
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