What to consider when inheriting an investment or pension?

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Losing a loved one is devastating and brings the requirement to get finances in order when the bereaved would rather focus on the difficult time at hand. Sarah Wilson-Trainor, one of our long-serving Chartered Financial Planners has helped a number of families through claims after a death and tells us about the process and the steps required to navigate this complex journey.

One of the hardest parts of my job is asking a spouse, civil partner, or family member to provide me with a death certificate and notification of the date of death. It is an important part of the process, but one which doesn’t get any easier. It is important that we have this information so that we can get in touch with the pension or investment company so that we can ask for a probate valuation as at the date of death. The probate valuation is the value of the investment or pension on the date of death and is used by the executors to complete probate. This can then be used by the executors to complete the probate process. 

Once the pension or investment company have received the death certificate they will write to the executors via our team explaining the next steps, they will confirm that they need a grant of probate and instructions as to how the assets are to be distributed. 

Our team are trained to help in this process and are equipped to ensure that the remaining spouse or beneficiaries make the right decisions for their financial futures. A good financial planner will do this sympathetically and independently, always with the best interests of their client in mind. The beneficiary may initially feel that they will want to gather all the cash in and then take their own financial advice in the future. This might not always be the best option, as often assets can be inherited, for example when spouses can inherit their deceased spouses ISA allowance. 

Likewise, money purchase pensions can remain invested or cashed in, and the right decision must be made as once it has been disinvested and paid out to the estate it cannot be undone. 

We have recently seen corrections across equity markets and generally speaking, I would not be advising clients to liquidate assets unless absolutely necessary. This is also the case for remaining spouses or beneficiaries, if you don’t need to sell the assets it may be best to keep them depending upon the beneficiary’s objectives and future financial plan.

Seeking advice as soon as possible means that the initial decisions can be made with a full picture of the remaining spouse or beneficiaries’ financial circumstances and also the tax implications of those decisions. 

I sympathise with anyone going through this, in particular at this challenging time. Stay safe, stay well.

Sarah Wilson-Trainor – Latest Blog Posts

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