New year, new will... time to get all your affairs in order
PUBLISHED: 13:47 11 January 2019
When you were thinking about the year ahead, did you consider making or updating your will? Many people have good intentions of making a will, but put it off in the midst of other distractions, says Kiri Nichols, of Spire Solicitors LLP.
WHY MAKE A WILL?
By making a will you can ensure your wishes are carried out correctly when you are gone. It can also prevent the stress and worry for your family at the time of your death.
A will is particularly important when you want to:
■ Provide for your spouse/partner.
■ Provide for your children.
■ Provide for an elderly or disabled relative.
■ Make provisions for special friends.
■ Make a gift to charity.
With a will you can appoint legal guardians to care for your underage children and to provide a mechanism for ensuring that those guardians can access your estate to maintain your children to the standard you would expect.
Compared with 10 years ago, family structures are now very diverse.
A will can be a helpful way to balance the needs and circumstances of all your beneficiaries. An example would be a second marriage where you have children from your first marriage.
There are a number of mechanisms you can include in your will to provide for your new spouse while seeking to protect your estate for your children.
In addition, a will can provide for vulnerable beneficiaries such as disabled adults or children. It might be that they are unable to manage an outright monetary gift without help or support and your will can put this structure in place for their ongoing benefit.
A will is also an effective opportunity to consider tax planning, particularly for inheritance tax and capital gains tax purposes.
Your advisor can consider with you what tax would be payable as a result of your death and by whom it is payable. Furthermore, they can consider with you any options to limit a tax liability.
WHAT SHOULD I INCLUDE IN MY WILL?
The appointment of executors and trustees is very important and they should be specified in the will. Any gifts that you wish to make should also be included; these can include personal belongings, legacies of money and gifts to charities.
You can also include a clause setting out your request for funeral/ burial arrangements and organ donation.
What if I do not make a will?
Many people presume that their next of kin will automatically receive the whole of their estate; however, this is not always the case.
When a person dies without having made a will, the laws of intestacy will apply and your estate will be divided according to this fixed set of rules. This means your estate might not be divided the way you expect, or want.
There is often the temptation to also seek a self-written will, perhaps from a stationer. While a will can, on the face of it, seem simple, there are a number of pitfalls for the untrained eye.
Unfortunately, the impact of those pitfalls often does not come to light until it is too late. This can lead to difficulties for those left behind.
REVIEWING/UPDATING YOUR WILL
It is important to update your will whenever there have been changes within your life such as a marriage, remarriage, divorce, separation, births or deaths.
As a guide, it would be suggested to reconsider the terms of your will every five years.
If there are minor changes, these can be done by making a “codicil”, a legally binding document to amend part of the will already in place.
LASTING POWERS OF ATTORNEY
While considering the importance of making a will, you may also want to think about making a Lasting Powers of Attorney (LPA).
There may come a point in the future when you are unable to manage your own affairs. This may occur at any stage in life and may be brought on by physical illness, mental illness or simply old age.
To avoid uncertainty and to ensure that your affairs are in order you should consider making a Lasting Power of Attorney.
There are two types of LPA:
■ A Property & Financial LPA allows you to appoint one or more people (your attorneys) to manage your finances and property. This will allow your attorneys to deal with day-to-day correspondence, obtain money for your use, collect your benefits, pay your bills and sell or rent your house. You can appoint your attorneys to look after matters while you still have capacity.
■ A Health & Welfare LPA allows your attorneys to make decisions regarding your personal health and welfare. This could include making decisions about your day-to-day care, medical treatment and whether you should go into residential care. It also gives attorneys the right to accept or decline life-sustaining treatment.
Choosing your attorneys
The people you choose to act for you are called your attorneys. You should choose people whom you completely trust, as ultimately they will be making decisions on your behalf.
You can appoint one person to act on your behalf or name more than one person and specify different areas that each can make decisions about.
You can also specify that decisions should be made jointly by both attorneys if that is your preference.
WHAT HAPPENS IF I CHOOSE NOT TO HAVE ONE?
If you do not have a Lasting Powers of Attorney and you lose mental capacity, many problems can arise.
If this situation occurs it may be necessary for an application to be made to the Court of Protection for an appropriate order to be made to enable someone to act on your behalf and administer your affairs.
This article is sponsored by Spire Solicitors. If you would like to discuss further any points in this article, please contact Spire Solicitors LLP on 01603 677077 for all your legal needs.