Dealing with finances causes mental health problems for 40% of bereaved

Major flaws in the process make finalising financial affairs after a death a ‘brutal’ experience

Almost 80,000 more people died last year from any cause in England and Wales and the probate system is rife with delays and inefficiencies (Getty/iStockphoto)

This week’s lockdown easing feels, at the very least, like the end of the beginning.

But as we re-emerge, the true impact of the pandemic on our financial affairs is only just becoming clear. Nowhere is that more stark than when it comes to dealing with the financial implication of death.

Around 600,000 people die every year in the UK but in 2020 alone we had one of the highest rates of excess deaths in the world.

In England and Wales, almost 80,000 more people died last year from any cause than we might expect in a typical 12-month period.

With warnings of further waves of this disease, fears for the next flu season, and grave concerns over delayed diagnoses and treatments for other conditions and illnesses, the numbers are set to remain high for many years.

Thousands more people are trying to navigate the closing down of the financial affairs of loved ones and managing the distribution of their assets or estate.

An executor is the name given to the person dealing with the estate of someone who has died. They are named in the will and usually have to apply for the legal authority to deal with everything from finding paperwork and closing bank accounts to settling debts and tax bills on behalf of the deceased.

Up to four executors can be chosen by the deceased and although they must be over 18, there are few other restrictions on who these individuals can be. Though some are named because of their professional background and previous relationship with the deceased, executors are often family members or very close friends.

An administrator is someone responsible for the estate when, for example, there is no will or the named executors can’t or won’t take on the responsibility. Around half of UK adults don’t have a will.

But often with little knowledge and limited support, these individuals are coming up against a system rife with delays and inefficiencies at the worst possible time.

The result, according to new research, is a marked deterioration in the mental health of two in every five people.

A quarter suffered financial difficulties as a direct result of a role that typically lasts around five months but takes more than a year for one in ten estates.

“Organising the financial affairs of a close family member who has passed away is extremely upsetting,” says James Armstrong, who lost his wife, father-in-law and both parents within a six-year period.

“You are already grieving, your emotions are all over the place, so the last thing you need is a complicated legal process to exacerbate things. But sadly, that is exactly what happens.”

“I have had to go through it a number of times, including  for my wife, Vivien, who died at just 43,” he says.

“Trying to organise the administrative side of the process when I was struggling with my own grief – and trying to support our children – was just horrible. There is really no reason why the admin side has to be difficult too.

James Armstrong with his daughters Martha and Libby (James Armstrong)

Legal professionals themselves are well aware of the problems; 88 per cent think probate – dealing with the estate of someone who has died – is “slow and inefficient” and 52 per cent admit the time it takes is unreasonable, according to probate service Exizent, which works with businesses involved in the process. 

Solicitors rely on the knowledge of the executor and the documentation they provide to verify assets and liabilities but a third of executors admit they were clueless about the process when they started. One in seven only found out they were named as the executor after the person had died.

A lack of experience may not be an insurmountable problem if the paperwork is up to date but barely half the population has financial affairs in order at the time of their death.

It means a third of financial accounts only come to light during probate, for example, and legal professionals report that one in 20 cases starts with no details at all, which leads to many of the delays.

“One of the most frustrating and upsetting parts for me about the probate process was the endless phone calls and letters with Vivien’s bank,” says James.

“I can’t remember how many times I had the same conversation with bank staff, explaining why I was calling. Despite all of this, they still kept sending letters addressed to her and people would call asking to speak to her. It was hugely distressing and even worse for the girls.

“Things like this means the whole thing becomes very painful. And while those involved are sympathetic, you can see that the processes they are working within are hugely inefficient.

“Something has to change to ease the process. It’s so convoluted and complicated, nobody really understands it. It should be frictionless.”

Appropriately serving bereaved customers or their relatives falls under the financial regulator’s existing rules on dealing with vulnerable people.

But calls are now growing for better, more timely communication from financial institutions and an easier asset discovery process.

Meanwhile, Citizens Advice and the Money Advice Service provide guides on what to do when someone dies.