Few of us like to think of our own death, let alone make financial plans. However, death can often be costly for those left behind. Whilst certain debts may be wiped off, there are still expenses such as funeral costs and inheritance tax that have to be paid for by someone. Taking measures to reduce these costs could relieve the burden on your loved ones. Here are just a few ways that you can make dying less expensive.
Write a will
A will allows you to decide who inherits your money and possessions. Without a will, your money and possessions are divided up equally amongst your close family according to law. This may not necessarily be the way you want it, which is why a will is important. Gifting certain possessions in your will can also reduce the amount of inheritance tax your loved ones have to pay. The likes of Marie Curie offer free will writing services that are worth taking advantage of.
Pre-pay your own funeral
Companies such as Heart of England Funeralcare can help you plan and pre-pay your own funeral. One of the great perks of this is that you get decide every aspect of your funeral from the coffin to the venue to the music to the type of flowers you want. Funerals can sometimes cost thousands, which is why it’s worthwhile taking out a pre-paid plan. This could be paid via a weekly or monthly scheme. Make sure to read the small print when pre-booking your funeral – the option to change your plan at any time can be useful, as well there being some form of compensation if the funeral home goes bust.
Be wary of life insurance
Life insurance can be another means of paying for your funeral as well as giving your loved ones some money to support them. This can be beneficial if you have children or a spouse that is dependant on you financially – life insurance can ensure that they have some form of extra financial support. However, rates can be high if you have a dangerous job or if you’re over 50. Specialised life insurance companies may be able to offer cheaper rates in some cases, but you may find that it’s a rip-off compared to the compensation your loved ones are likely to receive.
Pass down some savings
An alternative to life insurance could be to create a savings account that can be passed down to those left behind. You can usually add a child to a savings account, giving them access only when you die. This ensures that these savings get left to them and them only. It’s worth shopping around for savings accounts as some trusts are inheritance tax-free. You can also pass down your pension to your loved ones – this too can be made inheritance tax free.
