New Year – New Will?
It’s a New Year. The Christmas decorations are down, the gym memberships have been purchased, the diets have started and resolutions for a ‘new you’…
Expert lawyers from our Private Client team explain why making or reviewing your Will should be at the top of your New Year’s resolutions…
It’s a New Year. The Christmas decorations are down, the gym memberships have been purchased, the diets have started and resolutions for a ‘new you’ have been made. But when you were considering the 12 months ahead, is getting your personal affairs in order on your list of priorities?
Many of us don’t like to confront the discomfort of planning for our own death. Research has revealed that over half of the UK’s adult population has not got a valid Will. This means thatwhen they die, they will die intestate.
The rules of intestacy are fixed. Cohabiting couples are at the greatest risk if they haven’t made a Will because the rules of intestacy do not recognise cohabiting couples. Therefore the surviving partner may not receive anything at all, and need to make a court application to benefit from the deceased’s estate, which can be both costly and time-consuming, and ultimately there is no guarantee of success.
With modern family structures including unmarried couples, second families, step-children and half-siblings, it is more important than ever to legally set out who should administer your estate after your death and who should inherit your assets.
1. Certainty and peace of mind as to who will benefit from your assets when you die. You can specify who will benefit and how much they will receive.
2. You can choose who you want to administrate your estate when you die (these people are called ‘executors’).
3. If you have received or expect to receive an inheritance, and you are unsure how to manage that for your own estate and tax planning, you may benefit from advice on Deeds of Variation. A Deed of Variation can redirect your inheritance to other individuals such as your children or even to a trust so you can retain control over the funds but the money is not in your estate for your use or inheritance tax purposes.
4. With some forward planning, it is possible to mitigate inheritance tax or even negate it altogether. Inheritance tax is charged at 40% on an individual’s assets valued over £325,000. With the value of property having risen, the taxable amount on some estates could be substantial, so it is worth considering this and drafting an appropriate Will.
5. You can appoint guardians in your Will to look after any children who are under the age of 18 at the date of your death.
6. If you own a business, a Will can contain provisions specifically for this. For instance, will the business continue without you? Who would you want to run it? Should it be sold and the assets distributed to your loved ones?
In 2016 there were 525,048 deaths registered in England and Wales and the number of deaths tends to peak in the early months of a New Year. Whilst the Christmas period is a time for relaxation and celebrations, it is also a period when mortality rates are surprisingly high.
Putting aside the somewhat depressing seasonal statistics for a moment, the seriousness of the message remains; there are particular times throughout the year which should trigger a review of your Will:
• Exciting events such as the birth of a child or a marriage
• Tumultuous circumstances, such as during a separation, a divorce or even after family fallings out
• Buying a property
• Receiving an inheritance from a deceased loved one
• Taking advice on any changes in the tax rules
Your Will can be a very useful tool to “control and protect” your assets, even after your death, for the long term benefit of your chosen beneficiaries, often through simple and flexible trust structures.
Lasting Powers of Attorney
Whilst considering what will happen to your estate on death is a vital exercise, it is just as important to think about what would happen if you became physically or mentally incapable of dealing with your financial affairs in later life.
Putting in place a lasting power of attorney whilst you still have mental capacity to do so can save time, money and distress to your loved ones in the long term. If you were to lose your mental capacity and had not put in place a power of attorney, your accounts might not be able to be managed without a court order, which can be a long and complex process, and someone who you may not necessarily have chosen to manage your affairs may end up doing so. It is also possible to make a lasting power of attorney in relation to your health and welfare, so that your chosen attorney can stipulate what care you should receive, give instructions as to your medical treatment and have a say in where you should live, in the event that you were not mentally capable of making these decisions for yourself.
These matters need careful consideration and any of our specialist solicitors from the Wills, Tax, Trust & Probate department would be happy to discuss your circumstances and requirements, and help you put in place the necessary documentation. We prepare Wills and Lasting Powers of Attorney on a fixed fee basis, advising you at our initial appointment what the cost will be to give you added peace of mind.
So why not make one more resolution for 2018, and ensure your affairs are in order?
Whether making your first Will or reviewing what you already have in place, it is recommended that you always seek specialist legal advice.
James Clarkson and Hollie Marcham are both solicitors in the Wills, Tax, Trust & Probate team at Weightmans LLP.