Why financial advice can be important following the loss of a loved one07/10/20
When you’re coming to terms with the loss of a loved one, financial planning will be one of the last things on your mind. Yet, in the month’s afterwards, it can provide security and help you plan for the rest of your life.
Bereavement can mean you may no longer take financial advice. After all, you’ll have a lot of other areas to deal with and loss can make it seem like a task that is insignificant in comparison to everything else. Research finds that the reason almost half of widows (49%) leave a financial adviser is that they no longer want to receive advice. While it’s understandable, there are reasons to continue taking financial advice following the loss of a partner.
1. Your priorities and financial situation may have changed
For many, bereavement can mean your priorities and goals change.
Previous plans are likely to have been influenced by both parties. Once you’ve come to terms with the loss, you may find that goals previously set out may no longer match what you want. It can be a difficult process to go through. Letting go of aspirations and experiences you believed you’d tick off together can be incredibly emotional. But after a period of grieving, it’s important for you to think about what your priorities are now.
In some cases, plans previously set out will still be important to you. In others, you may want to make changes. Both outcomes are fine, but you should take time to assess where goals now lie.
In addition to changing priorities, you may find that your financial situation has changed. For example, if you relied on your loved one’s salary or pension to create an income. Financial planning can help you understand how your income may change now and what steps you can take to provide security and live the lifestyle you want. Understanding how assets have been affected and how to make the most of allowances can be complex. We’re here to explain what changes in your financial situation may mean now and in the future.
2. Providing confidence in your financial security
Following a loss, it’s natural to worry about your future. For some people, this will include how secure they are financially and what it means for their life. This can be particularly true if your loved ones used to make the majority of financial decisions.
Long-term finances can be complicated, and you may not feel confident in making decisions. Financial planning can help you get to grips with what your options are and understand the pros and cons of each with your situation in mind. There’s no right or wrong answer but the decisions you make should relate to what your priorities and goals are.
Knowing a professional financial planner has worked with you to create a long-term financial plan can deliver confidence, enabling you to pursue goals.
3. Consider your legacy
The loss of a loved one often prompts us to think about our own mortality. With this mind, your attention may turn to your legacy and what you’ll leave behind for loved ones.
The first step to considering your legacy is to understand what assets you hold and how you’re likely to deplete or add to them over your lifetime. This can help you see how your estate and its value will change over time. From here, you’re in a position to think about how you’d like your estate to be distributed. There are many things to consider, from whether you’d like to leave a charitable legacy to whether there are certain items you’d like to leave to specific people. Financial planning can help you set out priorities when it comes to estate planning.
Once you have an estate plan, you should take steps to write your will, name a Power of Attorney and take steps to mitigate Inheritance Tax if necessary.
We understand how challenging it can be to think about the future and day-to-day finances when you’ve lost someone important to you. When you’re ready to, financial planning can help you understand your finances and goals over the coming years. If you’d like to discuss your situation with a financial planner, please contact us.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate will writing or estate planning.