Most of us should prepare for the eventual transfer of assets, regardless of any tax or legal consequences. It is natural that many of us want to leave our wealth to those who matter the most.
WILLS & LASTING POWER OF ATTORNEY
Most of us should prepare for the eventual transfer of our assets, regardless of any tax or legal consequences. It is natural that many of us want to leave our wealth to those who matter the most. Having a well-managed estate can save time and legal costs in the long term, help avoid a large Inheritance Tax bill, and cushion the blow for those you leave behind. A Will maybe the most important document you write in your lifetime, because it allows you to select the persons who will receive your assets when you die.
It’s important to start with a clear picture of your goals. You may want your estate to provide ongoing income and security for dependents or to make bequests. Everyone’s circumstances are different – planning can look at tax-efficiency and maintaining access to income and capital.
One of the most important components of any financial plan is a Will. First and foremost, a Will puts you in control. You choose who will benefit from your estate and what they are entitled to. You also decide who will administer your affairs after your death.
If you don’t make a Will, the intestacy rules will decide who benefits from your estate – and that can produce undesirable results. The law sets a hierarchy of who is able to handle your financial affairs after death, and that can lead to problems if the person is not suitable because of their age, health, geographical location, or for any other reason.
Statistics reveal the importance of wealth transfer planning and lifetime gifting advice. It is estimated that around £5.5 trillion of intergenerational wealth transfers will occur over the next 30 years.
Source: ‘Passing on the pounds – The rise of the UK’s inheritance economy'. Published May 2019. Author: Kings Court Trust
Before making a Will you should consider your estate. What assets do you have and who would you like to leave them to? You will need to think about who you wish to appoint as Executors. They are the people who are responsible for handling your affairs after your death. Executors’ responsibilities include arranging the funeral, gathering all of your assets, settling your debts, bills and taxes from the proceeds of the assets and distributing the remainder in accordance with your Will.
If you have children under the age of 18 (unless they are married) you should consider appointing guardians who will be responsible for your children until they reach 18. Being a guardian involves making decisions about the children’s upbringing, education, health and welfare.
How will you distribute your assets? Do you have dependants that you need to consider? Would you like to put your assets into a trust and appoint trustees to make decisions about when and how much each potential beneficiary should receive based on the circumstances at that time?
If you are concerned about Inheritance Tax or long-term care costs, there may be something you can do in your Will to mitigate this.
Our sister company Fogwill & Jones (Legal Services) Ltd has the expertise to advise you fully on your Will requirements and to prepare an accurate document that is legally binding. Fogwill & Jones can also act as Trustees and Executors on your behalf if you wish.
A Lasting Power of Attorney (LPA) comprises legal documents that can be made for Property and Financial Affairs, as well as Health and Welfare. These documents can be put in place at any time, and it is important to consider setting them up, no matter what age you are.
An LPA sets out your wishes as to who should assist you in relation to your property and financial affairs and your health and welfare, when you become incapable of dealing with these issues yourself. You can control who deals with these and set out any limitations and guidance.
If you experience ill health or have an accident, and do not have an LPA, there would be no one with authority to make decisions for you. By making LPA’s you can control who is appointed, the authority is given while you are fit and well, and there is no delay in your chosen attorneys taking up their role if assistance is needed. If there is no LPA in force and you become incapacitated, your next of kin will need to apply to the Court of Protection to appoint a Deputy who is responsibility it will be, to manage the affairs of the person who has become incapacitated. The person the Court appoints will usually be a legal practise and the cost of this will have to be borne by the person who is not well. This process can take months and cost several thousands of pounds.
Common sense will dictate that if you need to act on behalf of someone it is likely you will need to do so at that time, not in 2 or 3 months’ time. Therefore, having an LPA in force is an essential piece of a well-managed estate.
Use this LPA to give an attorney the power to make decisions about things like:
- your daily routine, for example washing, dressing, eating
- medical care
- moving into a care home
- life-sustaining treatment
It can only be used when you’re unable to make your own decisions. You can add specific preferences, such as which area you prefer to live.
Use this LPA to give an attorney the power to make decisions about things like:
- managing a bank or building society account
- paying bills
- collecting benefits or a pension
- selling your home
It can be used as soon as it’s registered, with your permission. You can add specific preferences to this LPA such as, where you prefer to invest and charities you wish to continue to support.
You should consider who you would like to be your attorneys carefully. Your attorneys have a duty to help you make decisions. However, if you are unable to make decisions even with their help, your attorneys must act in your best interests.
A Certificate Provider, who is either someone you have known for two years or alternatively a professional, will sign the document to confirm that you understand what you are doing and that you are not under pressure to enter in to an LPA.
Once an LPA has been signed by you and your chosen attorneys, the LPAs are registered at the Office of the Public Guardian (OPG). The OPG is on hand to ensure that there is no foul play. The OPG may step in if it thinks it necessary to safeguard your position.
Making Lasting Powers of Attorney gives peace of mind, enabling those appointed to help when needed.
Our sister company Fogwill & Jones (Legal Services) Ltd can help with the preparation and registration of Lasting Powers of Attorney. We will liaise with you, your attorneys and Certificate Providers to sign the document before assisting in the registration process.
Fogwill & Jones can also act as an Attorney on your behalf if you wish.
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