How does the current cost of living crisis affect those going through Estate Administration?
Death is undoubtedly a difficult time for everybody. This is true even before we consider the responsibilities that come with settling a loved one’s estate – responsibilities that often evoke further confusion, sadness, and stress for grieving individuals.
These complexities have the potential to be seriously detrimental to personal wellbeing, especially when cost pressures are taken into consideration. Last year’s Bereavement Index research, compiled by Exizent, taught us that these cost pressures are often a reality, with 25% of people suffering financial difficulties when administering an estate. This is because, while the deceased’s estate can be used to pay for any expenses, the costs surrounding the bereavement process still cost those left behind an average of £2,630.
Amidst an increase in case delays and high rates of inflation, it might come as little surprise that now 1 in 4 people suffer financial difficulties when dealing with an estate. These are figures that cannot be ignored, particularly considering that of those who struggled financially, 86% also saw a negative impact on their mental wellbeing, showing a direct correlation between cost pressures and declining mental health.
To add to these pressures, 2% of estates are still left in debt when someone passes away and, unsurprisingly, the value of estates being left behind is decreasing. The average estate has decreased by nearly £13,000 in 2022, according to Exizent Bereavement Index research, leaving less behind to pay for any expenses.
This decreasing estate value, combined with the current increase in the cost of living, is serving to make things even more financially precarious for some following the death of a loved one. At Tower Street Finance we have conducted research that has identified a 12% reduction of individuals who expect to leave an inheritance to family, friends or other beneficiaries when they pass away compared to 2021. As the cost-of-living crisis continues to put individuals under financial constraints and uncertainty, 60% of those surveyed believed the current cost of living crisis will impact how much inheritance they can leave when they pass away.
Luckily, the majority of individuals will only have to deal with the probate world once or twice in their lifetime but does becoming an executor to someone’s estate have to be a crippling financial burden and a strain on an individual’s mental health?
With the technological solutions in play today, professionals should be able to work together more effectively to overcome challenges in the bereavement process that hinder them, saving time and money.
Solutions such as Exizent can save a legal professional up to 3 hours compared to standard formats by automating Inheritance Tax and Court Forms, with the case data already entered, helping to support their clients and provide a clear picture of the stage of their probate process throughout. What’s more, by automating Estate Accounts, users can save time spent on calculations and reduce the risk of errors through automated residual distribution calculations.
Alongside these technology advancements, there are now financial options available people who might otherwise struggle with the costs associated with estate administration, from helping individuals to access their inheritance sooner to providing help with funding of inheritance tax, funeral costs, legal fees and other expenses. At Tower Street Finance, we have created a range of probate lending solutions, removing the stress and worry of financial concerns many individuals face.
With these services like these the industry can work together more seamlessly, reducing costs where appropriate and, more importantly, easing the process for the bereaved.