The death of a partner or spouse is an emotionally challenging time, often compounded by the practical difficulties of managing finances and paying for expenses. Understanding how joint accounts work and the requirements of obtaining probate can help streamline financial matters during such times.
In running a busy Estates practice, we often see things happening where delays and extra costs are incurred when they might have been avoided. So we thought it could be helpful to identify some of the practical steps that can be taken to avoid financial difficulties after the death of a loved one.
JOINT ACCOUNTS
Having a joint bank account with your partner or spouse can be incredibly useful. On the death of one account holder, the surviving partner usually retains access to the funds without the need for probate. This access can provide immediate financial relief to cover urgent expenses such as funeral costs, household bills, and other necessities.
Regularly review and update the documentation associated with joint accounts to ensure both names are correctly listed. Ensure that the bank has up-to-date contact information and identification for both account holders.
PROBATE REQUIREMENTS
Probate is the legal permission granted by the High Court which confirms a will’s validity and the authority of the executors to administer the deceased’s estate. If your partner or spouse dies with assets solely in their name, these assets may be frozen until probate is granted. This process can take several months, potentially delaying access to funds needed for immediate expenses.
PLAN WITH WILLS AND FAMILY TRUSTS
Ensure that you and your partner or spouse have valid, up-to-date wills that clearly outline the distribution of assets. A well-drafted will can speed up getting probate and reduce the likelihood of disputes, providing quicker access to funds.
Establishing a family trust can be an effective way to manage assets and provide for your loved ones. Assets held in a trust are not subject to probate, allowing for immediate access and avoiding delays and legal complexities.
INSURANCE AND OTHER FINANCIAL PRODUCTS
Do you and your partner have adequate life insurance coverage? Life insurance payouts are typically processed quickly and can provide essential funds to cover expenses during the probate process.
Regularly review and update beneficiary designations on life insurance policies, retirement accounts, and other financial products. This ensures that the funds are directed to the intended recipients without the need for probate.
We encourage our clients to keep detailed records and maintain a list of all financial accounts, insurance policies, and other assets. Details should include account numbers, contact information for financial institutions, and any relevant passwords. This information should be shared with a trusted family member or legal advisor.
PRE-PAID FUNERAL PLANS:
Anyone watching mainstream television these days will know of the pre-paid funeral plans to cover the costs associated with the funeral and burial. For some people this can be an appropriate way to alleviate financial pressure on the surviving partner and ensure that funeral arrangements are carried out according to the deceased’s wishes.
LEGAL ADVICE:
We don’t apologise for recommending our clients to consult with a legal professional to discuss estate planning and probate processes. Lawyers and experienced Legal Executives can provide tailored advice based on your specific circumstances and help you implement strategies to minimize financial difficulties.
CONCLUSION
Taking proactive steps in financial planning and understanding joint accounts and probate requirements can significantly ease the financial burden during the difficult time following the death of a partner or spouse. By maintaining joint accounts, ensuring proper documentation, planning with wills and trusts, securing insurance, and seeking professional advice, you can ensure smoother financial management and focus on what really matters – honouring the memory of your loved one and supporting your family.