Death isn’t something many of us feel comfortable discussing.
Like money and sex, death remains a taboo conversation. It’s understandable — no matter how inevitable it is, talking about the end of our lives is hard. And inheritance, which spans both death and money, can feel even harder. Receiving money or assets from a loved one after they’ve gone can be emotional, contributing to the shock and pain of our grief.
But we need to get better at talking about death and money.
In the UK, tens of thousands of bereaved families have lost loved ones to coronavirus.
Many more will have had friends and relatives who passed away in isolation.
Even without the extra weight of the ongoing pandemic, dealing with a will, estate administration and probate — the legal and financial procedures that follow a death — is something that overwhelms lots of us.
Thinking about wealth in the context of death is a conversation that none of us can avoid forever. But breaking the taboo about money and inheritance can improve our financial and mental wellbeing even through the most difficult of times.
In fact, talking about it can mean we — and our families — are better off and less stressed in the long term.
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The importance of planning
Speaking to Paul Coen, an inheritance specialist, here are a few things to consider when it comes to inheritance — but the linchpin of this is planning.
“If you plan properly during your lifetime, you can make sure your wealth goes where you want it to go to,” says Paul. “By having the right planning in place, you know your estate will go to the right people at the right time, be taxed efficiently and leave very few surprises for your family.”
Central to any inheritance plans will be a will. In the UK, research shows that over 35% of people over the age of 55 do not have a will, rising to 83% amongst 18–34-year-olds. A will puts you in control of who benefits from your estate and defines what happens to your legacy. It can help you preserve assets as well as make provisions for those you may leave behind.
“A will is the cornerstone of any inheritance plan,” Paul says. “Most people are apathetic about wills, but then we talk about intestacy rules and they don’t like the sound of that either.”
Talk to your family
However, planning can also mean talking about money with your parents or children.
Paul explained how, in many cases he’s dealt with, people haven’t wanted to bring up things like making a will or life insurance with their families because they’re worried about looking greedy or stepping on toes (particularly with elderly parents). They may also feel ill-equipped to talk about these topics because of a lack of financial education in their past.
However, having a conversation about things like pensions and life policies when you’re still relatively young means you have far more options for passing on your wealth or assets than if you wait until you’re 93.
For example, in one case, a brother with two other siblings encouraged his parents to speak to Paul as a financial planner when they were in their elder years. It turned out that they had a huge amount of paperwork just sitting in their garage, which was actually hundreds of thousands of pounds worth of shares. One document was from the 1920s and represented a single share worth £50,000 in today’s money. Because they found about these assets early, they were able to start planning around this “new” wealth — looking at how to support their parents and also think about grandchildren and legacies to leave behind.
Having conversations like this may seem tasteless, but they’re also invaluable after a loss. It means you know where you stand and so does everyone else. It means you’re less likely to trip up over surprise issues like capital gains or the nil-rate band. Likewise, they can help you feel in control when it comes to your money, even in the face of grief.
Talk to an advisor or financial therapist
There are also options on who you can speak to following a bereavement.
Many resources will tell you that if you’re inheriting a sum of money, you should immediately speak to a financial advisor or planner. Similarly, if you’ve inherited a home or property, a first port of call should be a surveyor (not just an estate agent) who can help you understand the value of the real estate and what your options are in terms of selling, renting or keeping as a second home and so forth.
But grief is a funny beast and knowing what to do with your inheritance can be very hard. There is so often a sense of needing to do the ‘right thing’, as if your spending or investing choices need to be made more meaningful.
Paul noted that whilst it’s possible to do many fancy things around inheritance tax — like setting up JISAs or investing in property — sometimes the most important thing is to buy something for yourself first, as a memory of that person.
“Do something financially productive for you as a person,” he says. “It’s important for planners and advisors to remember that these experiences are human, and it’s about doing what’s best for you as an individual.”
Of course, if you’re working through tricky emotions around the new wealth you have, speaking to a financial therapist can also help. Money is already fraught; grief may mean you want to speak to someone who can help you figure out your best next steps.
“Many people who suddenly inherit question their worth,” wrote Bari Tessler, author of The Art of Money: A Life-Changing Guide to Financial Happiness, for Stylist. “Why did I receive this money? I don’t deserve this? Theyworry about whether they will be good stewards of this money. They may also feel guilty about having it (when friends are struggling or in different financial situations) and may feel hypervigilant about using it.”
But the fact is that there’s no perfect way to spend an inheritance — just like there’s no perfect way to spend your usual money.
Speaking about your finances — with family, friends, an advisor or a therapist — can all help alleviate your worries and decide how you want to spend an inheritance.
The key is often to take some time away and not rush your decisions.
“A lot of the time there’s no instant fix or decision to be made,” says Paul. “You may want a cunning plan for how to meet your needs and goals. An inheritance may help you meet those goals. But you will want to speak to people who can help you along the way.”
The Financial Times has also done a useful survey of its readers to give advice on what to do if you’re the executor.
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