It's time to get your financial planning in place by Alice Beer
Death, Divorce or Dementia! Well this is going to be a jolly read isn’t it?
The truth is that you are a lucky person if more than one of the three doesn't hit you and if you are a similar age to me, there are times when it seems like they all might be happening at once.
We all have emotional rollercoasters lurking around life’s corners and sadly those tough times are going to be made even tougher if we haven't made some basic financial preparations.
I am not in a position to lecture, I am very good at telling other people how to organise their lives but I haven't exactly had my finger on the pulse when it comes to making serious financial planning. Over half of cohabiting couples and over two-thirds of married couples have a senior financial partner in their relationship. Meaning, one person in the couple has handed over the financial reins to the other. This is most likely to be the woman as she takes time out of work for children…. Outdated but true. This too was me, when I took a break from work. I was so busy trying to be good at all the parenting stuff that I was very happy to hand over all the money matters. Many, many clever and capable women who have brilliant minds and maybe at one point brilliant jobs, take a financial backseat when children arrive. From financial independence to taking a “household salary”, it’s great whilst things are sailing along but if something happens to the person whose name is on the bills and bank accounts, then you will have a mess, that you are probably not strong enough to face, ahead.
So here we go with some absolute no-brainers to do as soon as possible if the above rings true to you.
HAVE THE CONVERSATION
While you are both fit and well. “Let's get our finances all sorted so we both fully understand and can control where we stand”, does not mean, I’m leaving you or I’m about to give you a shove off a cliff. It just means we need to look after each other now for the future.
MAKE A FINANCIAL DOCUMENT
A factsheet listing all accounts, pensions, loans and subscriptions….. Everything! There will be more than you think. You should both know how to access all of them and be aware, which are in just one name and which are joint.
IF YOU ARE NOT MARRIED
And that’s me too, then it is outdated but we need to protect ourselves. Recent research carried out by the insurance company Direct Line showed that more than one third - of cohabiting couples living in the UK were unsure of what their rights would be should their partner pass away without leaving a will, and that one in ten cohabiting couples wrongly believed that they would be automatically entitled to inherit their partner’s share of any property that they lived in together. You must know that a surviving partner will only inherit if this is stated in the deceased partner’s will. It doesn't matter if your relationship has outlived most marriages, you have very few rights.
MAKE A WILL
More than half of married people living in the UK have drawn up a will, whereas with unmarried people who live with a partner the figure is only 26%, just over a quarter. There are far too many cases of people having to sell properties and uproot at the most upsetting time simply because wishes hadn't been made clear.
Often you can make a will for free if you leave some money to a charity. Otherwise, use a solicitor. It costs very little and is usually a very straightforward process. You can store it with the solicitor or at home if you like, just don't go at it with a Sharpie when you have a row!
CHAT TO A FINANCIAL ADVISOR
This doesn't have to be an expensive process and it will probably save you lots of time and money later. They can help you navigate names on the deed of the house, life insurance policies and cohabitation policies.
There we go. That wasn't that painful was it? It’s not a pleasant or thrilling thing to do but you will feel so reassured once it is all sorted and believe me, you will never regret it. Who knows, in your organisation, you might find a long-forgotten bank account with enough for a small splurge in it!
Alice Beer is a consumer journalist and presenter for ITV's This Morning.
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