BEREAVEMENT

At such a difficult and distressing time, it can be hard to think clearly about practical matters. That's why we've put together guidance on claiming support and handling the estate of a family member or friend.

If you are a customer of Scottish Widows and need to let us know someone has died, we're here to help. Find practical information about what you need to do, things you may need to consider and documents that you might need to have to hand on our bereavement page.

You can find a step-by-step guide on what to do when someone dies on the government's website.

Is there a will?

Find out whether a will was left behind. It could have instructions for how your loved one wishes their funeral arrangements to be made. If you don't know where the will is, get in touch with their accountant or solicitor – they should be able to help.

If you're not the executor of the will, you need to notify the executor as soon as possible about the situation, as they will be dealing with the estate. A solicitor can help you to do this.

If there is no will, which is known as dying 'intestate', an administrator will need to be appointed to manage the estate. You can find lots of information on how this process works in different parts of the UK on the government site.

Consider funeral arrangements

After registering the death, one of the first tasks is organising the funeral. The cost of the funeral is one of the first financial considerations with a bereavement, and can cause a significant, unexpected pressure on finances.

The average funeral costs over £3,000, according to analysis from MoneyHelper. This cost can often be paid from the person's estate, or might be covered by a pre-paid funeral plan. The executor of the will takes care of paying for the funeral. If the estate can't cover the cost of the funeral, then friends and family might be required to pay. However, there is government support available if you need help to pay for a funeral you're arranging.

If you are a Scottish Widows customer, we may also be able to offer you support, as we’ve signed up to the Funeral Pledge. If no other arrangements have been made and you don’t have the money available to pay for the funeral upfront, we can advance money from the individual’s Scottish Widows pension up to £10,000 to a funeral director if there are delays in closing accounts while waiting for probate. Get in touch to find out more.

It is important to note that workplace pensions do not legally form part of the estate, so this does not apply to those with a Scottish Widows Workplace Pension policy.

Managing the estate

When looking to manage the estate, the first step is to identify if the person has made a will – it should simplify the overall process.

Inheritance tax will impact some estates, so it is important to review the current rules on the government website. Current rules state that normally no tax is to be paid if any of the following applies:

• The value of the estate is below the £325,000 threshold (known as the nil-rate band)
• A spouse or civil partner gets left everything above this threshold
• Everything above the threshold is left to an exempt beneficiary, such as a charity.

In addition, if the person's home is left to their children or grandchildren, the threshold can increase to £500,000.

Inheritance tax planning is not straightforward, so if you are in any doubt about whether you need to pay, seek professional advice from a tax specialist. You will normally have to pay for this advice. Moneyhelper offer A guide to Inheritance Tax (moneyhelper.org.uk)

Sorting out an estate can be complicated, and many people use solicitors to manage the process. In less complex circumstances, you might want to manage the process yourself to keep down costs. MoneyHelper has a detailed guide on how to go about it this way. It is important to note workplace pensions do not form part of an individual's estate.

A nomination of beneficiaries form will help guide the pension provider about who should receive the funds from a pension. While the pension provider will always take note of your nomination form, in order to ensure the funds are not subject to inheritance tax, the nomination can’t be binding. Although pension funds are generally not subject to inheritance tax, sometimes the value of death benefits may be subject to tax charges. As this is a complex area you should contact your adviser or tax office if you need further guidance.

When dealing with a bereavement, general money considerations and finances may be one of the last things on your mind. However, it’s crucial to consider your financial options if the death of the person affects you and your family.

If you’ve lost someone who shares the financial commitments with you, make sure to review all your bills. Identify those where your partner was a joint or sole policy holder. Open any letters addressed to your partner to make sure no payments are being missed which could be accruing interest or late payment fees.

You’ll need to contact providers to ensure they’re aware of the change in circumstances. For example, if your partner was the main driver on your car insurance or joint policy holder on home insurance, you’ll need to update your policy with your provider. Where your partner paid for a bill from their own account, you may also need to update the bank details to get this switched over to your account.

You should also review and inform providers of:

• Bank accounts
• Loans and credit cards
• Mortgage or rent
• Pensions
• Life insurance or income protection policies
• Car payments
• Council tax and any benefits

MoneyHelper outlines the bereavement benefit you may be entitled to if you lose your spouse or civil partner. If your household has suffered a severe loss of income following a bereavement, there’s also details on how Universal Credit could help support you.

Support services available to you:

National bereavement charity, Grief Encounter, offer services including a freephone helpline. They also provide 1:1 counselling, groups and peer-support activities for children, young people and their families.

The government Tell Us Once service helps you let key local and government agencies know about a death over the phone or online. Once you've registered the death, the staff will explain how it works. They'll tell you which of the below departments will be told:

• DWP
• HMRC
• DVLA
• Passport office
• Local Authority

NHS Bereavement Support explains some ways to help deal with grief following a bereavement.

Cruse Bereavement Care Support offers counselling, education, advice and information following a bereavement.

More information about funeral directors

National Association of Funeral Directors

The National Society of Allied and Independent Funeral Directors (SAIF) .

It can be uncomfortable thinking about the future following the loss of a loved one, but there are some steps you can take to help support you and your family through what comes next.

You may need to review what happens to your own estate after you pass if the loved one you have lost is included in your own will. Similarly, for your workplace pension benefits, which do not form part of an estate, it’s important to review and update your nominated beneficiaries.

You might receive some income from the estate. It’s important to manage this money and collection of assets carefully. We would recommend speaking to a financial adviser to help discuss what may be the best next steps for you. Find an adviser at Unbiased. You will usually get charged for any advice you receive.

Your goals for retirement may look different now. To understand what this might mean for you in terms of how much you might need to save for your retirement, take a look at the Pension and Lifetime Savings Association (PLSA).