Making a will is widely thought of as one of those important things one must do but somehow never get around to tackling. For many people, it takes the death of a friend or family, or the unexpected death of someone famous, which is then widely reported in the media, to spur them into action.
Over recent years, the world has lost many of its stars at relatively early ages: Victoria Wood was 62, David Bowie was 69 and Carrie Fisher was only 60. This year Shane Warne, a man widely considered to be one of the greatest bowlers in cricket history, died, at the age of 52, from a heart attack whilst on the island of Koh Samui in Thailand. Such deaths often give us pause for thought followed by a defined intention to put our estate in order.
Tackling the issue of planning one’s estate is something that should be done as early as possible. Very many people associate the term “estate” with the wealthy or ultra-wealthy. However, estate planning is important for all, not just for the rich. Everyone, regardless of family dynamics or financial status, can benefit from having an estate plan which could include wills, lasting powers of attorney and, where relevant, trusts.
It is important for you to make a will because:
- If you die without a will, there are certain rules which dictate how your money, property and possessions is to be distributed. This distribution may not be in line with your wishes.
- Unmarried partners and partners who have not registered a civil partnership cannot inherit from each other unless there is a will. Therefore the death of one partner may create serious financial problems for the surviving partner.
- If you have children, you will need to make a will so that suitable arrangements can be put in place for your children if you die.
- It may be possible to reduce the amount of inheritance tax that could be payable on your estate following your death.
- If your family or financial circumstances have changed, it is important to update your will to reflect these changes. For example, if you have separated, if there has been a family death, if you have recently married or enter into a registered civil partnership which makes any previous will you have made invalid.
Lasting power of attorney
It is easy to assume that because you have a will in place you automatically have some kind of power of attorney in place too. However, there is no overlap. A will deals with your estate on death whereas lasting powers of attorney deal with your estate during lifetime. The moment you die, your lasting powers of attorney cease, and your will becomes relevant instead.
Again, lasting powers of attorney are vital for everyone regardless of age. They can help you plan for the future in case of accidents such as the proverbial car crash and/or illnesses such as dementia, strokes and heart disease. They allow you to nominate someone you trust, known as your attorney(s), to act on your behalf and in your best interests with regard to your assets and healthcare when you are unable to make such decisions for yourself. Once you reach a point in time where you need someone to act for you, it is often too late to get lasting powers of attorney set up. They are like insurance in that respect. Once they are all set up and registered though, you can forget about them and hope they never have to be used.
Please do not assume that if you are married or in a civil partnership, your spouse or civil partner would automatically be able to deal with your assets and make decisions about your healthcare. This is not the case. Without lasting powers of attorney, they will not have the relevant authority to act for you.
The matter of trusts in the form of will trusts or lifetime trusts should also be considered when focusing on your estate plan. Discussions involving concerns over early deaths, second marriages, children from different marriages, tax planning and care fees planning are all very useful considerations not just for you but future generations.
Finally, Shane Warne had several very lucrative brand deals and was a regular commentator on Fox Sports, income streams that of course have ceased. Consideration should be given to not assuming income pours in to benefit your beneficiaries regardless.
If you are affected by any of the issues outlined here, please get in touch today. We are here to help.