Most of us have no idea how our deaths would affect our families, and assume that everything would be sorted out by grieving family, who would presumably arrange a funeral then receive whatever’s left of our estate.
Unfortunately a death in the family is rarely that simple even with a will, and probate takes a typical six months! Paying for a funeral is a major cost (an average of £7,000) and the immediate family usually have to pay for it out of their own pocket, hoping that there are enough funds in the estate to cover it.
All personal accounts are frozen, (sometimes joint accounts if they have an associated overdraft or borrowing) and a spouse or partner will have to find out which utility or mortgage payments are affected and find another way of paying them, only once they have the death certificate. Any outstanding debts or un-transferred mortgages would be taken before probate allocates funds as stated in any will, and the payout is often far less than the waiting family have bargained for. Many bereaved families take out a loan to cover the initial costs involved, then hope that their inheritance will cover their borrowing.
An easy way to protect your family is by having life insurance, protected with a trust document. The trust document ensures that the policy pays any sum straight to the recipient, giving them some funds whilst they wait for probate on the estate of the deceased. Even a relatively small sum can pay for the funeral, and their utility bills for six months, enabling them to care for dependents and grieve without financial pressure.
As Commercial and Referrals Director at Vital Insurance Services I deal with a lot of different businesses, from a huge range of industries.
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