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Is your partner going to be okay for cash when you die? I’ve been surprised.

I’ve been financial planning for over 20 years now and a key part of this is taking care of survivors financially after death. While on paper I think I’ve done a good job, I have recently been wrong-footed by the practicalities. Firstly- the obvious things: 

  • Hopefully, later in life, you’ve got assets that will take care of your spouse after you go. Early in life you should have life insurance- it’s cheap, effective and easy to arrange. 
  • You should have a will and possibly ‘Lasting Powers of Attorney’. Again- pretty cheap to sort out and while a bit fiddly they last forever.

What caught me out when a long-standing client suddenly died last year were the practicalities: 

  • As a couple they were very well off and organised- he had a multi-million pound pension left to his wife, an up to date will, a valuable property, investments, ISAs and cash. 
  • The problem was cashflow. It turns out the pension took about 6 months to transfer to his wife and his other assets more like 9 months. 
  • During this time his wife only had access to their joint account and her ISA. In this case it was more than sufficient but in many cases it wouldn’t be, and that would be miserable at such a tough time. 
  • Fortunately I was there to guide her through the process. If you don’t have an adviser make sure there are clear instructions as to how the survivor can get hold of money should they need to. Just having assets on paper isn’t enough! 
  • Recounting this to my other clients it seems that most of them have ‘Post It’ notes up around their studies with my name and number on saying ‘If anything happens- call here!’

Action point – Think about how each partner would pay the bills for at least 6 months should anything happen to one of you. 

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