Estate Planning in England and Wales
We regularly see the results of poor planning, poorly thought-through planning and none at all. The Probate Department (brokers) does not prepare legal documents, but we can recommend people who will. We strongly recommend the Peace of Mind Service operated by Will Custodian Ltd. Why? Because the Law changes on a regular basis, Tax rules change even more often and family circumstances are a constant source of change in many families. Add in business interests, and there is a potent mix of issues which there is very rarely anyone taking an overview of. The Probate Department (brokers) Ltd does not prepare legal documents, but we can recommend people who will.
Surprisingly, in many cases, the choice of storage service, which seems trivial on the face of it, is the crucial factor in the long term. Find out why in Where Should I Store My Will?
So what are the main constituents (or Legal Planning as we like to call it)?
1) Last Will and Testament
The Last Will needs to be
- valid – properly signed in front of two independent witnesses who are both present when you sign it and when each of them witnesses it.
- up to date in a thoughtful sense, and
- it needs to be found by the right people at the right time. That often is not the case, Wills are often not found at all, and those kept at home may be found by the wrong people and destroyed, leaving the Rules of Intestacy to distribute your assets. So no decisions are made by you, just what the Law considers right (and it is often very far from fair in all the circumstances.) The Rules of Intestacy are inflexible, and only very expensive Court action may change their effect. Most people can’t afford to take Court action.
2) Lasting Powers of Attorney
People fondly think that their parents, partner, spouse or children can look after them if they lose the ability to do so.
Cloud cuckoo land is populated with such dreams, and they are very far from the truth. If you are over 18, it is just as likely that the Local Council will take over in such circumstances. – sound Estate Planning is essential, let us point you in the right direction.
As a real-life example, one of the firms we work with was approached by a friend of a client. Her friends’ husband had been taken into a nursing home as he had bad knees and kept falling down. The small wife could not pick him up again. She mentioned this to a counter assistant in the bank, when she was drawing the housekeeping from their joint account. The assistant fetched the bank manager, who refused the withdrawal and froze the account until such time as the husband could be produced and interviewed to check his mental capacity, or a Lasting Power of Attorney produced, authorising the wife to use the account. The alternative was to get an expensive emergency order from the Court of Protection. In this case, we tried the simple way of writing a General Power of Attorney, which the bank refused to accept. They also refused to visit the husband, who was very near where their staff parked. So the only option left was to go through the lengthy process of creating and registering Lasting Power of Attorney: at the time, that took three months, during which time the lady had no access to her money whatever, and she had to be borrow from friends and neighbours to survive.
Worse still, Lasting Powers of Attorney are currently wide open to being set up fraudulently, so leaving it could be disastrous.
We strongly recommend that you make your own choice as to who would take charge if the worst happens, and contact us to make Lasting Powers of Attorney. There is a specialist site on the subject here if you want more information.
There are two sorts of Lasting Power of Attorney:
a) Lasting Power of Attorney Property and Financial Affairs.
This type of LPA enables your appointed attorneys to deal with financial matters. That includes buying and selling your home – but not moving you, which comes under:
b) Lasting Power of Attorney Health & Welfare.
This enables your attorneys to deal with doctors, who you see, where you live etc.
As you can see, any adviser who says that you only need one type of Lasting Power of Attorney is clearly wrong! And that is quite common.
3) Funeral Arrangements
We also consider that setting up planned funeral arrangements is important (see www.PrepaidFuneralReview.co.uk). Once again, we see the family arguments where families on previously good terms fall out big time because they are emotional. And all of them have a different idea of the funeral which you would have liked, and they will fight tooth and nail to get things done the way they consider right. The problem is easily – if rarely – solved.
4) Trusts
Trusts are a very useful weapon in Estate Planning, but it is important that they are legally valid and don’t cause – rather than solve – tax problems.
Trusts are most commonly set up in a Last Will, but there may be tremendous advantages in setting them up during your life. You might care to have a look at www.HomeProtectionPlan.co.uk
5) Inheritance Tax & CGT Planning
With rising house prices, Inheritance Tax is increasingly having to be paid before estates can be released to beneficiaries. That is right, the IHT bill must be paid before probate can be granted! We don’t recommend leading-edge plans, because in most cases, less extreme and cheaper measures will do the job. And as they are within the spirit of the Law, they are a lot less likely to be challenged.
6) Business Management
If you own or have a management share in a business or partnership, you have a world of other issues which need addressing. If you have spent years building up a business, you need to spend an hour or two making sure that it not going to fall apart if your or a partner or co-director die or are unable to take part in the business for a period due to incapacity.
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Summary
Estate Planning is crucial for everyone over 18, and the earlier you start and the more regular the reviews, the better the outcomes will be for you and your ultimate beneficiaries. So get in contact today, and we can point you at someone to start to get your planning organised and reviewed on a regular basis.
See also 11 Times to Review your Legal Planning8 Simple Estate Planning Tips7 Times to ReviewHow to Keep Your Legal Planning Up to Date
Main Inheritance Tax Page. Or get in touch: