Coping with bereavement
Practical support to help with the financial impact of losing someone close
Losing a loved one is a traumatic time for families, one which can be complicated
by additional pressures due to the change in your financial circumstances. And while
only time will ease the emotional burden of grief, being prepared, and knowing what
practical help is available to minimise the financial effects, can make life a little
more bearable. In this section of the site, you can find out more about the tax
implications, support available and additional financial help you may be entitled to.
Its worth keeping your paperwork in order. Not only will it help you plan better,
but it will make it easier for those carrying out your wishes after your death. Make
sure you let them know about any policies that pay out a lump (cash) sum, or an income
after your death. It will make life easier for those you leave behind, and will give
you peace of mind knowing your partner or children will be looked after.
Understanding Inheritance Tax
Inheritance Tax, or IHT is a tax charged by the government on what is left behind
(your estate) when you die. Not everyone is liable to pay (or have their loved ones pay)
as its based on the value of what you leave. Currently, the threshold for IHT is anything
over £325,000 and the rate of tax is 40%. It has to be paid before a persons assets can
be handed to the beneficiaries of their will.
With the right advice, you can plan for Inheritance Tax and reduce its impact,
minimising the amount the taxman gets his hands on. There's a lot of free advice
available on the internet, you'll find links to this on the right. Alternatively
you may want to talk to a solicitor or an independent financial adviser who can help
you write your Will and plan for IHT.
Receiving cash or an income from an insurance policy
Losing a partner can have a dramatic impact on your household finances, not least
because you could be losing an income you have come to depend on. So being aware of
everything you're entitled to is important in making the financial side of life after
loss easier to bear. This could be cash that you will be eligible to receive through
a life assurance policy, or Death in Service Benefit offered through an employer.
Make sure you're claiming everything you're entitled to
You may be entitled to additional state benefits related to bereavement, including
help towards funeral costs, a one-off tax-free bereavement payment or weekly bereavement
allowance. Plus, if you live alone, or with a child in full-time education, you could
be entitled to a reduction in your council tax. Your local council office should be
able to provide more information on this, and the links to the right will take you to
other sites that may help.