A valid Will is an incredibly important part of estate preservation planning and will ensure that should the worst happen, your assets, whether they be financial wealth or possessions, are distributed in an orderly fashion to the right beneficiaries.
It’s important to make sure that after your death, your assets and possessions go to the people and organisations you choose, such as family members and charities you want to support.
Sensitive subjects for households
A Will is a very powerful document which will hopefully avoid legal wrangles and confusion over who will benefit from your estate. You can also leave a gift to charities of your choosing.
Wills, and Inheritance Tax planning more broadly, are sensitive subjects for households across the UK and are often thought of as slightly taboo topics. However, the global coronavirus (COVID-19) pandemic has focused minds and given us space to think.
Making changes to existing wills
And it seems that it’s prompted more people to take action, from making changes to existing Wills to encouraging them to think about writing one for the first time. But worryingly, new research [1] reveals over half of UK adults, 29.6 million people (56%) do not have a Will, including 36% of the over-55s.
The research also shows around one in ten people (8%) have written a Will for the first time since the initial pandemic lockdown in March 2020, and a further 14% have changed or update their existing Will in the last two years.
Types of Lasting Power of Attorney
A Lasting Power of Attorney (LPA) is a way of giving someone you trust, your attorney, the legal authority to make decisions on your behalf if you lose the mental capacity to do so in the future, or if you no longer want to make decisions for yourself.
Health and Welfare LPAs
A Health and Welfare LPA allows you to appoint an Attorney to make decisions about matters such as:
• Your medical care • Where you live • Your daily routine, such as what you eat and what you wear
• Whom you have contact with • Whether you have life-sustaining treatment – although only if you have given express permission.
Property and Financial Affairs LPAs
A Property and Financial Affairs LPA gives your Attorney the power to do things such as:
• Buy and sell your property
• Pay your bills
• Collect your pension or benefits
• Manage your bank accounts.
Emotional and Financial Pressure
A Will can provide peace of mind that not only will the correct beneficiaries benefit from any estate distribution, but also that it is done as efficiently as possible. But only 13% of UK adults have written a living Will, which is used to provide advanced decisions on refusing medical treatments if you become terminally ill or lose the ability to make decisions around medical treatment yourself. A further 6% said they had made a living Will, now more commonly called an ‘advance decision’. While no one likes to think about their own mortality, getting your house in order by having the right legal instructions can take away much of the emotional and financial pressure at a very difficult time. Taking the first step is always the most difficult but puts you as the benefactor in the driving seat. Especially important if you have children A Will can help reduce the amount of Inheritance Tax that might be payable on the value of the property and money you leave behind. Writing a Will is especially important if you have children or other family who depend on you financially, or if you want to leave something to people outside your immediate family. If you die without a valid Will, you will be dying intestate and your estate will pass to those entitled under the intestacy rules. Under the intestacy rules, your estate could pass to unintended beneficiaries and leave your loved ones in a very difficult situation at an already emotionally challenging time.
Source data: [1] Source and methodology: a sample of 2,000 UK adults aged 18+, with fieldwork by Opinium between 4–8 March 2022. Results were weighted to nationally representative criteria.
Leaving Your Legacy Behind
Thinking about death isn't easy. Talking about it is even harder. The reality of our own mortality is a tough subject, but a discussion will ensure your assets are left to the right people. If you want to be sure your wishes are met after you die, then it’s important to have a Will. A Will is the only way to make sure your money and possessions that form your estate go to the people and causes you care about. Unmarried partners, including same-sex couples who don’t have a registered civil partnership, have no right to inherit if there is no Will. One of the main reasons also for drawing up a Will is to mitigate a potential Inheritance Tax liability.
Statutory Rules
Where a person dies without making a Will, the distribution of their estate becomes subject to the statutory rules of intestacy (where the person resides also determines how their property is distributed upon their death, which includes any bank accounts, securities, property and other assets they own at the time of death), which can lead to some unexpected and unfortunate consequences. The beneficiaries of the deceased person that they want to benefit from their estate may be disinherited or left with a substantially smaller proportion of the estate than intended. Making a Will is the only way for an individual to indicate whom they want to benefit from their estate. Failure to take action could compromise the long-term financial security of the family.
To find out more or to speak to one of our financial planners, contact us on 01633 840000 or info@kymin.co.uk