Till death us do part
The unexpected death of a colleague always makes one pause for thought. If you have delayed thinking about how such an event would affect your business, perhaps now would be a good time.
Key-man insurance can provide financial support to a business on the death or incapacity of the main fee earner, but other practical matters need to be considered. For instance: Who would take control of the bank accounts and access the passwords to operate your computer systems? If your business provides a personal service to your customers, who would be available to step in and cover the essential service you provide? Have you appointed an 'alternate' for your business responsibilities and does your spouse or partner know who that is?
Your family's finances will be eased if you have made suitable provision for them in your Will. Is that Will up to date, and do the executors know where to find a copy?
If you are not married to your partner, consider the benefits and tax reliefs which will be denied to your partner on your death, including:
- The survivor of an unmarried couple has no rights to state bereavement benefits based on their late partner's National Iinsurance Contributions
- The unmarried partner may not be able to receive a pension from their deceased partner's employer, although that will depend on the terms of the pension scheme.
- Assets passed to the bereaved unmarried partner may be subject to Inheritance Tax (IHT), where the value of the deceased's estate exceeds the nil rate band of £325,000
- There is no transfer of the unused IHT nil rate band to the survivor of an unmarried couple The pension issue may be solved in advance by making a nomination in favour of a named individual and ensuring the pension trustees have a copy of that nomination. The other issues can only be avoided by marrying or not dying.