The unexpected death of a spouse is a devastating event and if the surviving partner is not fully aware of the state of the family's finances, it can lead to considerable financial problems. All too often, couples do not fully discuss the implications of the death of a spouse or partner and this can create additional stress that could easily have been avoided. So take some time out and consider the following areas of your family's finances.

Bank accounts
* On your premature death, a joint bank account should carry on as normal. However, watch out for money held in an individual bank account - this could be held up in probate, even if the surviving partner is the named beneficiary in a will.
Loans and debts
* Your spouse cannot be held directly liable for credit card and personal loans in your name, but on your death these debts will be deducted from the estate, thereby reducing what is left to your spouse, partner or other beneficiaries. Are you both clear where you each stand on loans secured on the family home? Do you have sufficient life cover to ensure that the family home is never put at risk?
The family home
* Firstly, how is the house owned between you and your spouse? In most cases, it will be on a joint-tenancy basis, which means that when one of you dies, the deceased's share in the property will automatically revert to the surviving spouse. If you are in a second marriage, is your ex-spouse's name still on the deeds? If so, get it changed now, otherwise your current spouse could lose all rights to stay in the family home.
Family protection
*  In addition to policies that you have each purchased yourself, gather together any paperwork relating to insurance provided through your employer and any additional life insurance provided through your pension. You should make sure that your life cover is written in trust.
Inheritance tax (IHT)
* If you own your home on a joint tenancy basis and are married, there will be no tax liability on the first death, because anything left to a spouse isn't subject to IHT. The same applies when you each own half the home as tenants in common and each of you leaves your share in your will to the surviving spouse. However, a surviving spouse must be UK domiciled for an unlimited amount to be IHT free, otherwise a reduced amount is IHT free. 
But tax could be a problem once the second spouse dies. Under the tax rules for the 2003/04 tax year, once an estate is worth more than £255,000 the excess becomes subject to IHT at a flat rate of 40%. 
If an inheritance tax bill looks likely, it is more sensible to make some provision to meet it, otherwise your heirs may be forced to sell the family home or other assets simply to raise enough money to pay the tax bill. A popular solution is the purchase of a whole-of-life insurance policy written in trust and designed to pay out when the surviving spouse dies.
Pension provision
* You also need to consider what would happen to your current and previous pension arrangements if you were to die prematurely. If you have an occupational pension scheme, is it based on a percentage of your final salary with provision for a widow or widower or is it a money purchase scheme? Check and make sure that your spouse and/or children are named on the benefit nomination form. 
Investments
*  Provided you say so in your will, investments, such as unit trusts, investment trusts and shares can revert to your spouse when you die, although in some instances the tax advantages of certain investments may be lost. If you have a substantial investment portfolio, it may be advisable to bequeath these in your will directly to your children or grandchildren to make use of the IHT nil rate threshold of £255,000 (2003/04), provided you leave enough for your surviving spouse to live on. 
Also, dividing ownership of assets between you and your spouse will allow each of you to make full use of your annual capital gains tax exemption, against which you can set your investment profits.
Wills 
* Don't assume everything will automatically go to your spouse or partner when you die. Ensure that you have a properly drawn-up will. Ask someone else as well as your spouse or partner to be an executor and, finally, don't forget to tell your spouse or partner and other family members where they can find a copy.