Overwhelmed by the idea of taking over your loved ones’ finances? You’re not alone

Although it might seem unthinkable now, there are some circumstances in life that could mean you need to help a loved one manage their finances, or even take them over completely.

These circumstances could be:

· A relative loses mental capacity, or feels they can no longer manage their money alone.

· Your spouse becomes too ill or injured to look after their wealth.

· Someone in your family passes away and leaves an inheritance to you.

Managing your own finances can be a time-consuming task in itself, so you could feel overwhelmed about the idea of taking on another person’s wealth as well. If so, you’re not alone.

Although assuming new financial responsibilities all at once can be stressful, forming a relationship with a financial planner now could help.

Read on to find out how we can help you and your family prepare for additional financial responsibilities, if and when they arise.

A Kellands financial planner can help you set up and manage these 4 essential financial documents

Being prepared for an unexpected event can vastly reduce your stress.

This is true for many things in life, and is certainly a factor when handling a loved one’s finances after an illness, injury, or death.

Luckily, being prepared for these events often comes down to having the right documentation in place. Knowing you have essential paperwork lined up means that, in a time of stress or grief, you may more easily cope with unexpected financial responsibilities.

Here are four key documents your Kellands financial planner can help you and your family put in place now, not later.

1. A Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is one of the most important documents you and your loved ones can obtain for future financial security.

A financial LPA allows you to nominate an attorney (or attorneys) who can assume control of your wealth if you lose mental capacity ­– if you developed dementia or were in an accident, for example.

Many believe that a next of kin can assume this role, but without being nominated as an official attorney, the next of kin may be locked out of someone’s:

· Mortgage

· Insurance

· Pensions

· Bank accounts.

Crucially, if you and your loved ones are yet to take out an LPA, now is the time to act. Once you lose capacity, you can’t put an LPA in place.

Remember: LPAs are individual, so each member of your family should register one and nominate a specific attorney. Doing so could offer invaluable peace of mind, knowing that if they can’t make their own decisions, someone they trust will be able to access their financial information and manage things on their behalf.

Plus, if you have your own LPA, you know that your attorney has what they need to assume control of your money.

2. A will

Of course, if a loved one dies, knowing they have an up-to-date will in place could reduce your financial stress in a time of grief.

As your family’s estate rises in value and you obtain or dispose of various assets, it’s important for you and your family members to update your individual wills regularly.

If you receive an unexpected windfall after the death of a family member, your Kellands financial planner can help you understand the details and manage this new responsibility.

3. Life cover

If your parent, grandparent or spouse has life insurance and passes away suddenly, you may be tasked with making a claim. Life insurance can provide a tax-free lump sum when your loved one dies, enabling you to pay for funeral costs and other essentials.

Your Kellands financial planner can help you and your family members:

· Take out an appropriate package of protection, including life cover, if you don’t already have it

· Make a claim if a loved one dies

· Decide how to use the windfall from a life insurance claim.

Having a trusted confidant by your side could make all the difference in a difficult time.

4. A pension “expression of wish” form

Lastly, one document many people forget about when preparing for the unexpected is a pension “expression of wish” form.

Your pension does not usually form part of your estate for Inheritance Tax (IHT) purposes. So, yourself and your family members may need to specify who should inherit your pension funds when you pass away.

Luckily, it’s easy to state your intentions through an “expression of wish” form. Encouraging family members to do this may mean that if you were tasked with taking over their finances upon their death, illness or injury, you know how they want their pension funds to be used.

Your Kellands financial planner can help you contact your providers and add this document to the list of essentials that can help your loved ones if the unthinkable happens.

In the event of the unexpected, having a trusted financial planner can make all the difference

Family financial planning can help all your loved ones put these four essential documents in place.

Then, if you have an unexpected set of financial responsibilities placed on your shoulders – be it an inheritance, or assuming control of someone’s finances while they are alive – we can help you take this on seamlessly.

Remember: forming a relationship with a Kellands financial planner now, rather than later, could be hugely important here. If you already know and trust a financial professional, and this expert knows your family well too, you could feel reassured when the unexpected happens.

Get in touch

If you’d like to discuss family financial planning with a professional, email us at hale@kelland.co.uk, or call 0161 929 8838.

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 estate planning, tax planning or will writing.

Note that financial protection 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. Cover is subject to terms and conditions and may have exclusions.

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