Everybody should make a Will, however if you have not got round to doing this yet, there are still precautions that you can take to help ensure that your funds go to those intended.
Put your Life Insurance ‘In Trust’
This is something that you can do at the time you take out the policy, or even after the policy has started. The benefits of setting up a Trust are:
- The funds are ‘outside of your Estate’. This means that whoever inherited the money would not have to pay any Inheritance Tax.
- The funds would be paid immediately on your death, rather than having to go through ‘Probate’. Probate is the legal process that happens after someone has died. It involves checking the validity of the Will, and distributing the property to the beneficiaries. The process can take months.
- If you do not have a Will – it is called dying ‘Intestate’. This process can take months or even years. Again, by putting your Life Insurance in Trust, the delay can be avoided.
- You can specify exactly who you want your Life Insurance paid out to – so you can rest easy that the right people will get the money.
You can obtain a Trust Form from the Insurance Company that issued your insurance plan. You will need to have a ‘Trustee’, who will ensure that your wishes are carried out after your death, and a ‘Witness’ to witness your signature.
Once the form is completed, it is sent to the Insurance Company, who copy it for their records, before returning it to you for your files.
There is no cost involved, just a little of your time.
Check old Pension Plans
When you start a Pension Plan, it is common to ‘nominate a beneficiary’. This means that you will have chosen who you would like the funds to go to if you die before you retire.
Make sure your wishes are up to date, or you could end up leaving your pension fund to an ex-boyfriend/girlfriend…
Make a Will
Making a Will is one of the best things you could ever do for your family.
Henrietta Oxlade is an Independent Financial Planner with Radcliffe & Newlands and MyFamilyClub’s in-house finance sage! She has been advising individual clients since March 1988, which is why many of her clients consider her part of the family. If you want to contact Henrietta, email us on [email protected] and we’ll put you in touch.