Preparing your loved ones for when you are no longer there

Since the outbreak of the Covid-19 pandemic, the virus has spread worldwide like wildfire, and millions of people have been affected by the unexpected death of a loved one. Nobody wants to think about death, but ask yourself this question right now – what if I were to die today? Would your loved ones be plunged into chaos and uncertainty and have to deal with this on top of the trauma of your passing?

In order to protect your loved ones from this harsh reality, you might want to apply the following practical guidelines while you’re still alive.

It is essential to ensure that all your affairs are in order, to avoid your spouse and family or your next of kin having to scurry around in the event of your death.

• Put together a “life file” that contains all your important documents and information, along with a full list of, for example, your assets and liabilities, credit insurance, policies, usernames and passwords, as well as your executor and financial advisor’s contact details.
• Ensure that you have a valid will in place.
• Should you not wish to be kept alive artificially you might consider having a living will drawn up. A living will is an instruction to medical practitioners and your next of kin regarding your wishes if the difficult decision to turn off the machines that are keeping you alive must be taken. If you are a registered organ donor, you can also put this fact on record in your living will.
• Your loved ones need to be aware of your wishes regarding cremation or burial, the details of any funeral cover you may have, and whom to contact when the inevitable happens.

The suggestions that follow might sound trivial, but make sure your spouse and family know how everything works in and around the house.

• Be certain that your spouse has access to sufficient funds to cover all expenses for at least six to eight months. Most of us are aware of the challenges facing the Master’s offices nationwide, and estates are taking longer to be wound up.
• Your spouse needs to start building up their own credit record in your lifetime to be able to qualify for services and utilities, a cell phone contract, a mortgage or a hire purchase agreement after your death, if not already.
• Check that beneficiaries have been nominated for all your life policies, where necessary, and that nomination forms have been completed in respect of any annuities and group insurance you may have.
• It is a good idea for your spouse to meet with your financial advisor and start building a relationship of trust between them so that the advisor can provide professional advice on your spouse’s future once you are longer there.
• Have business continuity discussions with partners / next of kin to manage continuity and risks.
• Ensure liquidity in the estate to pay administration costs, liabilities and taxes that will become due.

Using the above basic guidelines will have a positive effect and make the transition easier for all concerned.

Some guidelines for the surviving spouse to manage financial expectations:

• Adequate funds are unlikely to be a major problem for your surviving spouse if you have managed your affairs well during your lifetime. This includes having made provision for life insurance so that there will be sufficient income to cover the expenses, as well as having set up a network of competent and reliable people to provide your spouse with professional advice.
• If the surviving spouse is in the unfortunate position of having insufficient funds, careful planning must be done to provide for the basic expenses such as rent or a mortgage, as well as utility bills, food and insurance premiums.

It is important for your spouse to receive advice from a financial advisor – one with whom a good relationship has already been established – on investments, cash flow and how a basic budget (income and expenses) work. The financial advisor will assist here with a new plan to secure your spouse’s future.

• Don’t be in a rush to make major financial decisions straight away. Something that sounds like a good idea right now will not necessarily seem so wise in six months or a year.
• People are living longer and provisions must be made for the available funds to generate an adequate income. Ensure that the quantum of life insurance is determined in line with a properly prepared cash flow projection.
• A surviving spouse should update their will in order to make provision for guardians, trusts and the like.

People often make poor financial decisions during the mourning process and therefore it is important to obtain reliable professional advice ahead of time in order to help you make well-informed choices, both for your benefit and for your family’s future.

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