Making sure those left behind will be able to access deposits or policy benefits in the event of your death
This is not something we want to think about but taking some simple steps now could make things much easier financially for your next of kin in the event of your death. The last thing they need is the worry of finding money to pay bills and expenses, particularly when they know the money is there in deposit accounts, insurance policies, investment policies and pensions.
And yet, following a death, it often proves difficult for the surviving spouse, partner or next of kin to get access to the money needed to simply pay the family’s bills until probate goes through.
There is a way of speeding it up. With a little planning, proceeds due from policies such as life assurance, and investment and pension funds can be released to pre-selected beneficiaries, your spouse or partner, say, more quickly than otherwise.
Here is a brief outline of what happens with the various policy types:
Bank, building society, credit union or post office accounts
If accounts contain less than €25,000, the financial institution will release monies to the next of kin once the relevant paperwork has been provided. Institutions differ on the amount they will release so you should check this out with your account provider.
Where amounts on deposit are over €25,000 it can occur that the surviving spouse, partner or next of kin does not get access to the money on deposit until probate is taken out or even completed. This is to protect the financial institution in the case where there may be subsequent claims on the funds.
There is a way around this. You may be able to nominate (subject to financial limits) a person who may receive the proceeds of an account in the event of the death of the account holder. This needs to be arranged with the financial institution prior to death and not every bank, credit union or post office will facilitate these requests. The monies will pass to that nominated person, regardless of what is specified in the will.
Insurance and investment policies
If an insurance or an investment policy is structured to name a beneficiary in the event of the death of the policy holder, the beneficiary may claim the pay-out directly from the insurance company when the assured person dies by producing the death certificate and completing some simple claim forms.
If there is no named beneficiary, as is often the case, then the proceeds form part of the overall estate of the deceased and are distributed with the other assets, normally during the course of probate or at its completion. So, it’s important to name a beneficiary to speed things up.
You can name a beneficiary to a policy by adding a Simple Trust or a Letter of Wishes to the policy. Getting a payment from the life company or investment provider may be as simple as producing a death certificate. The provider will require a short period to process the payment but these simple additions to a policy may reduce the potential claim period by 18 months to 2 years, which is very useful to the grieving family.
We are happy to advise you as to how to apply this to an existing or new policy. My contact details are below.
Personal pensions, PRSAs, occupational pension schemes
Revenue rules and the scheme rules of the pension may vary considerably. They also vary pre- and post-retirement. This is most definitely an area where specialist advice should be taken from a qualified financial adviser.
In general then, it is a good idea to name a beneficiary on any policy you expect to pay out on your death to make things easier for those left behind.
If you would like any further detail, or to organise a chat please feel free to email me on firstname.lastname@example.org or call me on 01 4587576.
MB Planning Ltd. T/A Clear Financial is regulated by the Central Bank of Ireland. Registered in Ireland No. 494837. Registered Address: Rathcoole Premier Office Centre, Main Street, Rathcoole, Co Dublin. Directors: Michael Bradley (MD), Ciaran Shanley.