A Will is a legal document that sets out your wishes on what should happen to your wealth, possessions after your death.
The main purpose of your Will is to look after the people you leave behind. Setting out your wishes makes it easier to distribute your wealth and property, relieving stress for your family at an emotional time.
People often believe that, without a Will, their partners will just inherit everything. But that’s not necessarily the case, especially if you have children. If you die ‘intestate’, without a Will, intestacy laws apply. These are designed to be fair but may not suit your situation:
- Your estate is shared between your partner and children
- Your partner isn’t recognised if you’re not married or in a civil partnership
- Other family members or ex-partners can make a claim
- It takes much longer for your estate to be shared with loved ones
No. Your Will is designed around your personal situation and your wishes. The wording is very important – it must be clear and unambiguous.
Types of Will include:
- Simple Wills
- Mirror Wills – for partners and spouses
- Trust Wills
Your Will must be kept up to date. Important times to review and update your Will include:
- When you get married
- If you divorce
- Following bereavement
- When you have children
- To change Executor – e.g. following a death or change of relationship
- To change or add beneficiaries
- To make specific gifts of your property and assets
Case Study WILLS
Client Details – Wendy Timmis, 74
- Property Value: £400,000
- Sole Owner
- Equity Release of £84,000
- 3 Children and 9 Grandchildren
- Divorced
What were the key requirements?
Wendy wanted to put her property into a Trust, as her friends were doing it, to help avoid third parties interfering with her property after her death.
Option A
- Transfer house into a Discretionary Trust during life
- Pay £30,000* in tax to do so
Option A means the Equity Release company, has to agree to the transfer. They will not agree as this will delay them getting their money back by up to 125 years!
Option B
- Standard Will
- No immediate tax
- Able to claim additional Inheritance Tax allowances
Option B means no upfront tax payments, an uplift of up to £175,000 for tax allowances and certainty of where the property is going.
Wendy picked Option B.
clients are fictitious and used to illustrate an example only
More Than Financial, How? Wills and Estate Planning and HoneyPro are professional partners in wills and estate planning. HoneyPro provide advice via the online review and application, or if preferred via an online meeting.
By clicking on one of these links you are departing from the regulatory site of More Than Financial. Neither More Than Financial nor Quilter is responsible for the accuracy of the information contained within the linked site.
Will writing is not part of the Quilter Financial Planning offering and is offered in our own right. Quilter Financial Planning accept no responsibility for this aspect of our business.
Inheritance Tax/Estate Planning/Trusts and Will Writing Is not regulated by the Financial Conduct Authority.
Why everyone needs a LPA
LPA stands for Lasting Power of Attorney. It’s a legal document that lets you appoint people you trust to make decisions for you, if you ever reach the point that you can’t make them yourself. There are two types of LPA:
- Property & Finance: managing bank accounts. paying bills, collecting benefits, selling your home
- Health & Welfare: making decisions about your medical care and your daily routine
- If you need someone to handle important decisions and processes in the future, the GDPR data regulations stop institutions and organisations disclosing personal data even to your partner
- Having an LPA in place allows loved ones to access your personal data as part of managing your affairs
- An LPA must be put in place whilst you still have ‘mental capacity‘
Causes of people losing mental capacity include:
Dementia, accidents, mental illness, a stroke or the side effects of medical treatment
If you were to lose mental capacity, your family would have to apply to the Court of Protection for permission to make decisions for you. This takes time and can cost thousands of pounds
- All bank and financial accounts may be frozen – including joint accounts
- Your loved ones have no authority to pay bills, loans or credit cards
- Your loved ones have no authority to collect benefits or your pension
- Your loved ones won’t be able to renegotiate mortgage terms or sell your property or deal with tenancy agreements
- Your family can’t decide who looks after you, or where you receive care
- Social Services will make all the decisions about you and your care
- Your family get no say in major decisions, like whether to give you life-sustaining treatment
- Healthcare professionals may not be aware of, or respect, your beliefs or wishes
- When you’ve made your Lasting Power of Attorney, you’ll need to register it before it can be used. You register the LPA with the Office of the Public Guardian. This involves signing your completed LPA form and sending it off
- There is an £82 registration fee for each LPA payable to the Office of the Public Guardian
- It takes up to 20 weeks to register an LPA
Case Study LPAs
Client Details – Mrs Phillipa Collins
- Age: 82
- Widowed
- Mortgaged home worth: £180,000
- 2 Children
- Collects State Pension and a Workplace Pension
What were the key requirements?
Mrs Collins’ husband passed away 3 months ago, whilst he was resident in care. When Mr Collins entered care, it was a heart-breaking experience for the whole family, they all felt so powerless when Mr Collins was placed in a residential home over 70 miles away.
Whilst Mr Collins was in care, Mrs Collins was left to organise the mortgage payments each month, organise the payment of the bills and had some assistance from her children, namely John and Sandra, who both live nearby. Now however, Mrs Collins is tired with having to deal with all of the bills and talking with each service provider and wants her children to be able to manage this for her instead. As Mrs Collins is relying on her state pension and her workplace pension, she really needs to keep costs to a minimum. Her and her husband had remortgaged the home 4 years ago, on a 5 year fixed term mortgage and Mrs Collins is terrified that she may forget to remortgage and she’ll have to pay the much higher variable rate.
When Sandra entered the Post Office, to collect her mother’s pension for her, the Post Office had refused to hand over any money to her, because she didn’t have any authority. It was always Mrs Collins’, Sandra and John’s assumption that family members and next of kin could collect the pensions for Mrs Collins, however the Post Office are asking for written consent each and every time, or a Lasting Power of Attorney.
What did they choose?
- Mrs Collins approached Honey to get her Lasting Power of Attorney for Property and Finance done, so her children could collect her pensions for her
- Mrs Collins learned that if her husband had set up a Health and Welfare Power of Attorney, she could have decided which care home he was to live in and it would have meant he could have been a lot closer to her. One of Mrs Collins’ regrets was not visiting her husband as often as she would have liked, simply because the 140 mile round trip each time, really exhausted her. She really does not want her children to experience this should she need to go into care
- Mrs Collins told Honey that she would like John and Sandra to take over with managing her responsibilities and was surprised to hear that without the Property and Finance LPA, her mortgage couldn’t be renewed onto a cheaper fixed-term, should she have lacked the necessary mental functioning to enter into such an agreement
- With both of her LPAs put in place, Mrs Collins has felt, for the first time since her late husband had gone into care, more at ease that the heartache that the whole family suffered, would not be repeated
clients are fictitious and used to illustrate an example only
More Than Financial, How? Wills and Estate Planning and HoneyPro are professional partners in wills and estate planning. HoneyPro provide advice via the online review and application, or if preferred via an online meeting.
By clicking on one of these links you are departing from the regulatory site of More Than Financial. Neither More Than Financial nor Quilter is responsible for the accuracy of the information contained within the linked site.