Fail to plan and you plan to fail!
Fail to plan and you plan to fail – this famous quote is very true of estate planning.
Planning and preparation can help reduce the level of inheritance tax taken when you die, it helps to preserve your family home if you have a surviving spouse, and you can protect at least part of it from care home fees.
Planning also makes the process for probate much easier which takes less time cost from your solicitor.To stress the importance of planning your legal affairs, we have created a short guide:
Your family home
A family home is usually a person’s largest asset, and with the rise in house values over the past twenty-five years it forms the bulk of most people’s estate. If you die after the year of 2020, a family home can be a useful tax saver, especially if you have children. The changes announced to inheritance tax in the last budget will permit an additional tax-free amount of value tied to a family home to be passed to direct descendants.
It is important to know and understand how your family home is owned.
Is it registered at the Land Registry? This is not essential but it is very helpful and if you have owned your property for over twenty-five years it may still be unregistered.
Are you joint tenants or tenants in common? This can have important implications in terms of how you write your will.
If you are unsure or have any concerns, please contact us for further advice.
Know your family
Believe it or not, it’s been known in the past that some clients – mainly men “forget” that they have children either from the days of sowing their wild oats or even from previous marriages.
Through forgetfulness or negligence, we have been known to take instructions from a client who ‘forgets’ to tell us about a child. In many circumstances, we can usually guarantee that the child will suddenly appear when their long lost daddy passes away. This will cause complications and difficulty for the family.
It is perfectly possible to exclude family members from inheriting, even after recently publicised cases of estranged daughters challenging the wills of their late mothers, but by providing supporting evidence in an inheritance act statement will usually be the best course of action to ensure that your wishes are followed.
Burial or cremation?
It is not essential to place burial or cremation instructions in your will but it is beneficial to do so.
In the past, we have heard too many times “I don’t know whether granny wanted to be buried or cremated”. We recommend you ease that pain of decision making and anguish over making the wrong decision by recording your wishes in your Will.
Who is going to look after Bruno?
Those of us who have pets know that they are part of the family. Many pet owners forget to include provision for their pet in their Will which leaves the question of who will take care of them?
We recommend that you put some provisions in your Will to cover what will happen to your pet so that you make sure they are in safe hands.
Litigation on deceased estates is on the increase. We are all extremely saddened when ‘Great Aunt Maud’ passes away, but watch the sparks fly when her eldest son is excluded from her £600k estate because he married that girl that Maud never liked and moved abroad in 1978.
If you are going to treat people in the same class (talking particularly about your own children here) then make sure you either treat them the same OR have a good reason for not doing so and back it up with evidence.
A change of heart
If after many years, you decide that the terms of your earlier Will doesn’t reflect your current wishes, then please proceed with caution. We are not saying that you cannot change your Will, but we have seen examples in the past of beneficiaries who’s share of an estate under a later Will is less than a previous one and they have alleged incapacity or undue influence in order to overturn the terms of the later will.
Keep your promises
So your leaning over the gatepost of your vast acreage with your eldest son and you say to him ’if you work hard on the farm my lad all of this will be yours one day’. In reliance of your promise, your eldest lad puts his back into helping you run the farm and his brother and sisters move away receive good jobs, marry and have families.
We have seen many cases in the past where the eldest son never marries and shoulders all the farming burdens, and the client creates a Will which splits the farm equally between all the children. This will have an impact on your eldest lad and he will have the right to ask the court to intervene and will have a chance of receiving the entire farm. Do you really want your family slugging it out in the high court for three years after you have gone?
Get a receipt
Your promised to one day give your Great Niece that Picasso that hangs in the hallway.
Your Will makes no mention of the painting, and so all of your nearest and dearest are expecting to share in the proceeds of the sale of the painting, as they all thought it was quite ugly.
Imagine everyone’s surprise to discover after your death that it is no longer hanging in the hallway and Great niece has put it up for sale with tenants, claiming that you gave it to her years before you died. It can and it does happen, recording what you give to who whilst you are alive will help to eliminate such problems and will also help those who administer your affairs to progress with matters more smoothly.
I’m not dead yet
That is great news! Whilst you are alive and getting older, it is important to think about putting powers of attorney in place, especially if you have complicated finances and are suffering from deteriorating health.
We like to think of Power of Attorneys as insurance policies – hopefully they will never be needed but imagine how much easier life would be for your loved ones if you suffered from a catastrophic stoke, developed dementia or simply couldn’t manage to write anymore.
Live for today!
Most people have suffered losses and bereavements in the past and realise that life is far too short and we should live for today!
We all know that life is not like that and if we were going to die tomorrow we wouldn’t spend today ironing or catching up with the laundry. Putting your legal house in order from powers of attorney, and preparing Wills is something that you should not put off as you never know what’s around the corner.
Our Wills & Probate team are on hand to answer any questions you may have regarding protecting your assets and planning for the future. Give them a call on 0800 160 10 10.