Financial Planning After Bereavement: A Practical Guide to the Steps That Matter

The period following the death of a spouse or close family member involves a simultaneous need to manage grief and attend to a significant volume of financial and administrative requirements. Some steps are time-sensitive; others, if delayed, can create problems that are difficult and expensive to resolve later.

This guide sets out the key financial planning considerations following a bereavement, with a particular focus on the practical steps that should be taken in the first weeks, the benefit and inheritance decisions that require careful consideration, and the longer-term planning that a surviving spouse or beneficiary should undertake.

Immediate steps: notifying institutions

Within the first few weeks, the following notifications should be made:

HM Revenue & Customs: HMRC needs to be informed of the death to update any Self Assessment tax returns, close the deceased's tax affairs, and ensure the surviving spouse's tax code is updated. If the deceased was in Self Assessment, a final return will be required.

Department for Work and Pensions (DWP): to stop State Pension payments (overpayments will need to be repaid), notify about any benefits in payment, and claim any relevant bereavement benefits the surviving spouse may be entitled to.

Pension providers: contact all pension schemes to report the death and request information on any survivor benefits (see below). Do not delay — some pension schemes have time limits for claiming lump sum death benefits.

Banks and building societies: accounts in the sole name of the deceased should be frozen, and joint accounts will typically convert to the sole name of the surviving account holder. The bank will need to see a death certificate and probate documentation (where required).

Insurance companies: home, vehicle, and life insurance policies need to be notified. Ongoing premiums for the deceased should cease. Life insurance claims should be initiated promptly.

Investment providers and pension platforms: notify of the death, request details of any nominated beneficiary forms, and establish what documentation is required for access.

Solicitors and executors: locate the will and instruct the relevant solicitors.

Tell Us Once

The Government's Tell Us Once service allows a death to be reported to multiple central government agencies in a single step, including HMRC, the Passport Office, the DVLA, the Electoral Commission, and DWP. The service is available following registration of the death at the registrar and covers England, Wales, and Scotland.

This does not replace individual notifications to private financial institutions, but it significantly reduces the administrative burden of notifying government departments.

Probate: when is it required?

Probate (or in Scotland, confirmation) is the legal process by which an executor's authority to administer an estate is confirmed by the court. A Grant of Probate is generally required where:

• The estate includes property held in the sole name of the deceased
• Financial institutions require it before releasing assets (most will require probate for accounts or investments above £20,000–£50,000, depending on their own thresholds — currently no fixed legal minimum)
• The estate exceeds the Inheritance Tax threshold (£325,000 nil-rate band, or up to £1 million with transferable and residence nil-rate bands)

Where the deceased died without a will (intestate), the administrator applies not for a Grant of Probate but for Letters of Administration, which serve the same function. The administrator is appointed in a strict order of priority set out in the Non-Contentious Probate Rules (spouse or civil partner, then children, and so on).

The probate process typically takes three to nine months for an uncomplicated estate; significantly longer where there are disputes, overseas assets, business interests, or complex trust structures.

Survivor pension benefits

Defined benefit (DB) schemes: most occupational DB schemes provide a dependant's pension to the surviving spouse or nominated dependant, typically 50% of the member's pension in payment (or accrued pension if still employed). Some schemes also provide a lump sum death benefit. Contact the scheme trustees as early as possible, as there may be documentation requirements and discretion in how benefits are directed.

Defined contribution (DC) schemes and SIPPs: lump sum death benefits from DC pensions are typically paid at the discretion of the trustees, guided by any nomination form completed by the member. The benefit is currently free of inheritance tax (most pensions sit outside the estate for IHT purposes — but note that, under the Finance Act 2026, which received Royal Assent in March 2026, most unused pension funds and death benefits will be brought within the estate for IHT from 6 April 2027, except where they pass to a surviving spouse, civil partner, or charity). If the member died before age 75, the lump sum is also free of income tax for the beneficiary. If after age 75, the beneficiary pays income tax at their marginal rate.

State Pension: the surviving spouse may be entitled to inherit some of the deceased's State Pension, depending on when they reached State Pension age and their respective NI records. DWP will calculate any entitlement following notification.

Inherited ISA: the Additional Permitted Subscription

Spouses and civil partners inherit a unique ISA benefit on the death of their partner: the Additional Permitted Subscription (APS). This allows the surviving spouse to make an additional ISA subscription equal to the value of the deceased spouse's ISA at the date of death (or the date of closure, if later). The APS is in addition to the surviving spouse's own annual ISA allowance (£20,000 for 2026/27).

This is a valuable but often missed planning opportunity. It preserves the ISA wrapper on the inherited funds, maintaining the tax-free status. The APS must be used within three years of the date of death, or 180 days of the estate administration being completed, whichever is later. The ISA provider must be notified.

Deed of variation: reshaping the estate plan

A deed of variation allows beneficiaries to redirect gifts received under a will (or under intestacy rules) to other individuals or charitable organisations. For inheritance tax and capital gains tax purposes, the varied gift is treated as having been made by the original deceased — potentially reducing the IHT liability on the estate.

Key requirements:

• Must be made within two years of the date of death
• Must be made in writing and signed by all affected beneficiaries
• Must include a statement that it is intended to have effect under the relevant TCGA and IHTA provisions
• Does not require court approval (unless a minor beneficiary's interests are affected)

A deed of variation is particularly useful where the estate passes unexpectedly — for example, where the deceased had an old will that no longer reflects the family's circumstances, or where a beneficiary has their own estate planning reasons to redirect a legacy.

Reassessing insurance after bereavement

The financial protection requirements of a surviving spouse change significantly after bereavement. Key questions include:

• Does life insurance cover remain adequate, given that the family is now reliant on a single earner?
• Is income protection in place to cover illness or incapacity?
• Has any employer-provided life cover ceased because it was linked to the deceased's employment?
• Are healthcare and dental coverage appropriate?

A full insurance review should be undertaken within six months of bereavement.

Longer-term planning priorities

Beyond the immediate administrative tasks, the surviving spouse should undertake a full financial planning review, typically at six to twelve months following bereavement:

• Update the will to reflect the new estate structure
• Review all beneficiary nominations on pensions and insurance
• Reassess cash flow requirements as a sole individual or single-parent household
• Consider the IHT position of the now-enlarged estate (the surviving spouse typically inherits the entire estate, which may have IHT implications on the second death)
• Review investment strategy relative to changed risk capacity and objectives

Compliance note

Probate rules, pension benefit structures, and tax treatment of inherited assets are subject to change. In particular, the Finance Act 2026 (which received Royal Assent in March 2026) makes significant changes to the IHT treatment of unused pension funds and death benefits, bringing most of them within the estate for IHT from 6 April 2027; the detailed administration of these rules should be reviewed when applying them. Nothing in this guide constitutes legal or personal financial advice. A specialist solicitor should always be instructed for estate administration.

How Global Investments Can Help

Global Investments supports bereaved individuals and families in managing the financial complexity that follows a significant death. From reviewing survivor pension entitlements and inherited ISA opportunities to full estate administration support and long-term financial planning, our advisers work with sensitivity and expertise. Where assets span multiple jurisdictions — as is often the case for internationally mobile clients — we coordinate with local advisers to ensure every element is addressed. Contact our private client team at a time that suits you.