Asking the Hard Questions: What happens to your money when you die?
While most of us do our best to steer clear of the topic of death, it is nonetheless an unavoidable fact of life. It’s vital, therefore, to have those uncomfortable but important conversations with those you love.
What happens to your money when you die? Will your family be secure where money’s concerned – and what can you do now to set everyone up for a healthier financial future?
Read our handy guide for answers to these questions and more. Below, we’ve done our best to answer some of these (difficult) questions…
Your Bank Account and What Happens to it After You Die
Have you established someone as a beneficiary of your account? If so, in the event of your passing, some banks will release the funds to the named person. In this case, afterwards the bank will generally close the account.
If, however, you didn’t assign anyone the title of beneficiary, your family (or those in charge of dealing with your estate following your death) may find that the process is more challenging.
It’s not a task that bears thinking about now, but if someone close to you dies – and you’re left in charge of their estate – you should start looking through their paperwork to see if you can locate any bank statements.
Once you’ve found these details, you will want to notify the bank(s) the person holds accounts within. You will need a death certificate to do this.
At Unity Mutual, our policies have been designed to provide you with a way of investing your money to make it grow for your future benefit, provide a lump sum to your family in the event of your death, or to help support you in times of illness. If someone dies while holding one of our policies, a family member or solicitor representing the deceased’s estate will need to contact us to tell us what’s happened.
How to Deal with the Financial Affairs of Someone Who’s Died
Financial affairs aren’t limited to bank accounts; they are likely to also involve property and taxes too. You may also have to deal with any debts left by your loved one.
Citizens’ Advice has a useful guide, which details how to best deal with your relative’s financial affairs. It focuses on the following:
- How to deal with the property of someone who has died
- Tax and benefits
- Debts
- Probate and letters of administration
- Jointly owned property
- Joint bank accounts
- Inheritance tax.
Who Inherits Your Funds if You Haven’t Made a Will
Have you made a will? If not, who will inherit your money when you die?
If a person dies without having made a will (also known as an intestate person), their estate (property) must be distributed according to a set of rules: the rules of intestacy.
What are the rules of intestacy?
Under the rules of intestacy, only married or civil partners (and some other close relatives) can inherit a person’s funds.
Should someone die and the will is not legally valid, ‘the rules of intestacy decide how the estate will be shared out’, states Citizens’ Advice, and ‘not the wishes expressed in the will’.
These rules apply in England only; head to the link above for links to tailored advice in Scotland, Wales, and Northern Ireland.
How to Make a Will
If you want to know how to make a will, the Gov.uk site has a guide that will prove helpful. By making a will, states the site, you can make sure you do not pay more inheritance than required.
Be aware that there are different rules for Scotland and Northern Ireland, though.
Considering writing your own will? Get advice if your will is not straightforward, states the Gov.uk site, adding that you will need to get your will formally witnessed and signed. This will ensure it is legally valid.
If you’d like to make a will in a cost-effective way (or maybe even for free), many charities run a ‘Make a Will’ month scheme, including Macmillan Cancer Support, Age UK, and Mind. Find out more about them by clicking the links above – and don’t forget to do a quick Google search to see what else is available. Please note, though: not all wills are regulated; to help you find the scheme or will-writing service for you, Martin Lewis offers a handy guide that delves into the subject of will-making.
How to Update an Existing Will
To update an existing will, you will need to make a ‘codicil’ (an official alteration) or make a new will.
You will also need to get your will formally witnessed and signed to make it legally valid.
Want to build up a savings pot now?
If you want to leave a little nest egg for children or other family members – or perhaps you’d like to put some funds aside for your funeral – our Over 50s Life Insurance* could help you ensure there’s a little left when the time comes.
Again, it’s not everyone’s subject of choice – talking about making plans for when you die. That’s why we’ve made our Over 50s Life Insurance as quick and easy as possible. No gimmicks, no fuss – and you can find out more via the link above.
Have any questions?
Our friendly and dedicated team is on hand to answer any of your questions about our savings products – do not hesitate to get in touch if you have a query or two.
Until next time…
* Terms and conditions apply
