Bereavement: 5 actions your financial planner can help you take in a time of grief

7 August 2024

It is not easy to consider the eventuality of losing somebody close to you, be it your spouse or civil partner, parent, sibling, or a close friend.

But as we all know, life has its own plans, and at some point, we may have to say goodbye to someone we love.

While financial planning can’t take away the emotional hardship you may go through when a loved one passes away, working with a planner could at least bring you financial peace of mind.

It can be difficult to make any practical decisions when you’re grieving, and that’s where we can offer guidance. Both immediately after the fact and in the years that follow, financial planning could serve as a lifeline if you’re bereaved, especially if your wealth circumstances change as a result of the person’s death.

Continue reading to learn five actions a financial planner can help you take if you are experiencing bereavement.

1. Creating a plan for the immediate and long-term future

When a loved one passes away, it can be difficult to think straight.

A financial planner could help you to take care of immediate actions that need attending to, including:

• Applying for probate
• Selling properties belonging to the person
• Paying for funeral costs.

Once these short-term elements are underway, we can help you to consider your long-term circumstances. These conversations may cover:

• The windfall you have received from the deceased person, if applicable
• Whether your household income will decrease after their death, and how this might affect you
• The affordability of your future plans, including retirement and later-life care considerations.

It is important to remember that you are not alone after someone passes away. We’re here to help.

2. Calculating and paying Inheritance Tax

Inheritance Tax (IHT) is an essential conversation for families with substantial wealth.

As of the 2024/25 tax year, spouses and civil partners do not pay IHT, but anyone else who inherits money could be liable if you inherit more than the nil-rate band of £325,000. If you receive the main residence from your parent, grandparent, or great-grandparent as part of your inheritance, you could benefit from the residential nil-rate band of an additional £175,000 which means you could pass down up to £500,000 before paying IHT.

Working out which assets are liable for IHT, and how to pay it, can be complex. This is especially true if the inheritance you receive is part of a larger estate that has been split among several individuals.

A financial planner will help you calculate your IHT liability and work through any nuances with you.

To learn more about how we can help, read our recent insights into passing down property as inheritance and factors that could affect your IHT bill – or simply call us for a chat.

Please note, levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

3. Handling assets placed in trust

If the deceased person placed assets in trust for you, such as a parent, you might feel in the dark about what happens once they have passed away.

In this instance, your parent will have appointed a trustee who is in charge of ensuring the funds are distributed according to their wishes. As financial planners, we can work with you and the trustee to establish a plan for the future, which may consist of:

• When you can expect to receive the funds
• How much you might receive and over what time frame
• The tax you could be liable to pay on income from your trust.

There is nothing worse than feeling confused or overwhelmed after a loved one passes away. By establishing a trusting relationship with a financial planner, you could gain the peace of mind that your finances are in order, perhaps alleviating some stress from you while you’re grieving.

4. Obtaining a life insurance payout

If your loved one had life cover, you could be eligible for a payout after they pass away. This money could be extremely helpful for covering essential expenses, such as paying off debts or funding a funeral.

Indeed, a survey conducted by Aviva in 2023 found that 48% of employed people whose partner had passed away wanted more time off work than the bereavement leave they were offered – but many can’t afford it. What’s more, those whose partner did not have life insurance were more likely to give up their car or need to cut back on other expenses after their death.

These figures alone show how important it is to make a claim on your partner’s life insurance if they had it.

However, you might not know:

• Whether your partner had life insurance in the first place
• The provider they chose
• How much a potential payout would provide
• How long it might take to obtain the funds.

We can help you discover all the details and make a claim if you can. Although there is no guarantee that their life cover provider will pay out, Forbes reports that there is a 96.9% chance of receiving a payout if you claim. So, it’s always worth checking if your loved one had life cover, even if you aren’t sure.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

5. Gaining financial peace of mind

Nothing can take away the devastation of losing someone you love. But unnecessary stress can exacerbate the hardship you experience, especially where money is concerned.

Bespoke financial planning could lift this weight off your shoulders.

Forming a relationship with a planner early in life could mean that you already have a trusted guide to help you through the most difficult times. But if you’re recently bereaved and want to seek advice, it is never too late to gain bespoke guidance from an independent professional.

Our ultimate goal is to ensure our clients gain peace of mind so that they can comfortably strive towards their future goals.

Get in touch

To learn more about how a Depledge financial planner could help you take important steps after a bereavement, email info@depledgeswm.com or call 0161 8080200.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate trusts, estate planning or tax planning.