Five difficult conversations about dying we all need to have

Here are some of the subjects all of us need to discuss with those we love to provide peace of mind that all the practical and financial aspects of dying have been dealt with.

Have you set up a Lasting Power or Attorney?

A lasting power of attorney (LPA) enables you to appoint someone to act on your behalf if you’re no longer able to manage your finances or welfare yourself. It must be arranged while you still have mental capacity, or it won’t be valid. If you don’t have an LPA in place, and become incapacitated, your family or loved ones will have to apply to take charge of your affairs through the Court of Protection, which can be both costly and time-consuming.

You can set up an LPA yourself or get a solicitor to help you. If you’re considering enlisting the help of an expert, it’s worth comparing several different services to see how much they charge and what exactly you’ll get for your money.

Do you have an up to date will?

If you haven’t written a will or reviewed yours recently, you potentially risk leaving your loved ones facing a serious financial and administrative headache when you die, as your estate will have to be divided according to set rules, known as intestacy laws. Under these rules, only married or civil partners and certain other close relatives can inherit.

If you are living with someone but are not married and you die, they have no automatic right to inherit anything at all from you. Writing a will not only enables you to leave your estate to whoever you want, but also to appoint executors you trust to ensure that your assets are distributed in line with your wishes.

What are your funeral wishes?

Unless you’ve been explicit about your funeral wishes, and whether you want to be cremated or buried, your loved ones could end up worrying that they haven’t given you the send-off you would have wanted.

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Make sure you talk to them about your wishes, and jot down any special requests. You can include these in your will but it’s worth discussing them too.

Are your funeral costs covered?

Funeral costs can be expensive, so you may want to think about covering them in advance. Some people do this using a pre-paid funeral plan, but if you’re considering this route, make sure you understand what their plan does and doesn’t provide, and whether there are any extra charges applicable. Over-50s cover is another way to ensure funeral costs are covered. In return for paying monthly premiums, you’ll receive a lump sum when you die, typically ranging between £1,000 and £10,000, which your loved ones can put towards your funeral costs. Y

ou don’t have to have any medical checks to take out this sort of cover, and as you pay premiums until you die, a payout is guaranteed. The main downside of this type of insurance, especially if you take it out in your early 50s, is that there’s a risk you might end up paying out far more in premiums than the policy will provide you with when you die.

Have you thought about inheritance tax?

Rising property prices in many parts of the UK have pushed more and more estates above the £325,000 threshold at which point Inheritance Tax becomes payable at a rate of 40%. The threshold is £650,000 if you’re married or widowed.

There is also an additional ‘main residence nil rate band’ which is worth to £175,000 per person. However, not everyone will be able to benefit from this allowance, as you can only use it if you are passing your home to your children or grandchildren.

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There are steps you may be able to take reduce any potential IHT liability for your loved ones, for example, by making use of annual allowances. These include being able to give up to £3,000 away free of Inheritance Tax each tax year, and you can also make as many £250 gifts per person as you want each tax year. Estate planning can be complicated, so it’s worth seeking professional advice if you’re unsure.

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