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22 May 20
Five things to do in lockdown to ensure your legacy planning is up to date
Death is something that we don’t like to talk about. However, if you don’t have a plan in place for what will happen to your property and assets after your death, then you risk them not going to those you intended. Poor legacy planning can make an already distressing time much worse for your family.
Why not take advantage of the extra time on your hands in lockdown by making sure that your legacy planning is up to date? Here are five things to check off your list to make sure that your wishes are carried out after your death:
1. Have you got power of attorney in place?
Did you know that most couples (whether they are married, in a civil partnership or cohabiting) are not automatically allowed to manage one another’s affairs if their partner becomes unable to? This means that if one of you is the main bill payer or holds the financial strings then the other partner may be unable to access those resources when the other is unable.
A Lasting Power of Attorney (LPA) is a legal document that appoints one or more trusted people to act on your behalf if you become unable to make your own financial and health decisions. This means that if you have an accident or illness and are no longer classed as having ‘capacity’ to make your own decisions, then there is someone who is appointed to make them for you. Without an LPA, then the process is lengthier, and will be an added stress that your loved ones won’t need at such an upsetting time.
2. Have you got a Will in place?
Many people assume that if they die without a Will (dying intestate) then everything they own will go to their spouse. This is simply untrue and it depends on the value of the estate. This can obviously cause uncertainty and is far from ideal. Ensure that you have a Will in place to make sure that your wishes are carried out after your death.
3. Consider creating a Will Trust to ensure that your assets go to those you intended
A Will Trust is similar to a will but with more benefits and greater certainty as it will enable each partner to decide how assets such as the home should be protected and shared on first and second death. This means that each partner can choose who is to benefit from their share of the joint assets. This will apply whether you are married in a civil partnership, cohabiting or in a subsequent relationship with a partner who has their own children. Do you want to ensure that your share of your assets only pass to your family or bloodline? A Will Trust allows you to to protect any asset (savings, investments, artwork, antiques etc) that you hope to pass on to your family and will help prevent sideways disinheritance. Sideways disinheritance is where your assets can pass to another family or person due to circumstances at the time of your death. If you have a more complicated family situation then a Will Trust can help to avoid sideways disinheritance and ensure that your wishes are respected and your partner protected. Please note Inheritance Tax may still be payable on your estate as Will Trusts do not automatically mitigate Inheritance Tax liabilities.
4. Update your beneficiaries
Are the right people still listed on your life insurance policies, retirement accounts and any other accounts that name a payable on death beneficiary (such as your employers Death in Service benefit)? It’s so easy to overlook small details like this when circumstances change, so double check that everything is up to date and correct.
5. Make sure you have planned for Inheritance Tax
Inheritance Tax can significantly reduce the value of your estate after your death. Make sure you fully understand the impact that this tax will have on your estate if it is over the Inheritance Tax threshold and speak to an Independent Financial Adviser to explore your options in this regard.