Hiding money under the mattress sounds like something granny might do, but not you, right? Wrong. Recent research reveals we’re not all as financially savvy as we think.
Almost half of us have a secret stash and more than a third of us store cash at home, but few have planned for what happens to it if anything happens to them.
Many people have savings their loved ones don’t know about – a rainy day fund if your other half is bad with money, for example – but would still want it to go to them in the event of their death.
If you don’t have a record of it and no one else knows though, it makes things a lot more difficult.
What happens to my assets when I die?
Our study of 2,000 Brits found more than a third of people with a secret stash kept it at home, a habit which may have grown since the financial crisis as many lost their faith in banks. Mattresses aren’t the strangest hiding place either – I remember a client who had £30,000 in a carrier bag tucked under his U-bend and another who hollowed out the bricks around his fireplace to fill with cash.
Aside from the obvious risks that it will be lost or stolen (or water damaged if you’re like the gentleman above), if you die or lose capacity there’s every chance that money won’t end up where or with whom you intended. The same applies to any valuables not listed in your will such as jewellery or antiques, which could be removed without you knowing or your property could be sold before they’re found.
If your savings are somewhere more secure like a bank account, but no one else knows about it then that account will stay active until the bank realises you’ve died. This can take years and by then the balance may well be spent on tracing the heir. Whereas once there probably would have been bank statements to act as a record that accounts existed, the paperless era is likely to mean more will go undetected.
If a loved one has passed and you suspect savings haven’t been found, you can speak to whoever is dealing with the administration of the estate and undertake an asset search. We carry out very few of these, however, as the risk is it may cost more than the unclaimed assets are worth.
Why should I make a will?
Fifty seven per cent of Brits don’t have a will according to our research and the reason many people give is that they have nothing to leave. So you don’t have thousands of pounds to bestow on your nearest and dearest, but you may have sentimental items – your engagement ring, a treasured family album, a record collection – that you’d like to be looked after when you’re gone. If it’s not in writing who’s to know?
‘Common law’ is one of the most common misconceptions when it comes to what happens when you die. For example, if you’re in a relationship, but not married, and you don’t have a will, your other half won’t get anything, apart from certain joint assets, and it might pass to your children instead. If you have been married previously it could end up going to your ex.
What if I don’t want anyone else to know?
They don’t have to. Many people prefer to keep their finances private and if you don’t want to tell family and friends that’s your choice. If you do want to control what happens to your savings after your death, however, invest in a will. I also advise clients to draw up a schedule of assets, updated annually. This is confidential and kept in your solicitor’s strong-room.