In later life, it is common to assess your Will and conduct further estate planning. This is especially true if you have taken out financial services such as a lifetime mortgage plan which will affect your estate and beneficiaries.
There are many reasons it can be worthwhile to take the time to revise an existing Will and create a new, securely stored Will whilst you are able.
This could be directing your assets into a Trust to protect your estate against generational inheritance tax (IHT), divorce of your children, protection of assets against bankruptcy and care home fees.
Additionally, and very importantly, by implementing this planning, you can be assured that your wishes are preserved after death and that your estate will go to your intended beneficiaries.
Will writing, LPAs and inheritance planning are not regulated by the Financial Conduct Authority.
Do I need to pay inheritance tax (IHT)?
Estates under the nil-rate band are not liable for Inheritance Tax. The nil-rate band in the UK currently stands at £325,000. It is possible to make gifts up to £325,000 in total, and there will be no IHT to pay. However, this will use your nil-rate band and if you should die within seven years of the gift. There is an additional nil-rate band of £175,000, which comes into effect if your primary residence is due to be passed on to a direct descendent. Any unused nil-rate band can be passed onto a living spouse or partner. Please see the Government’s website for more detailed information.
Lasting Powers of Attorney (LPA)
We hope it will never happen, but there can be circumstances, regardless of your age and ability, which result in you being unable to make critical decisions for yourself. These decisions could include matters of healthcare, finances, or legal issues.
It is crucial, therefore, to consider a Lasting Power of Attorney. This will allow someone you trust to act as your representative if you are incapable. An LPA is brought into action if you lose mental capacity.
If you should lose mental capacity, your loved ones are not able to make decisions on your behalf as you would think. All bank accounts are frozen (including any joint accounts and assets you may have) and are not accessible until you can take legal action.
Someone called a Sheriff will be nominated from the Office of Public Guardian, and this person is the only person that will be able to make decisions on your behalf until the LPA can be obtained retrospectively, which can typically take over a year and cost thousands of pounds.
The costs for setting up and registering your LPA will be detailed to you. In addition, you will need to pay the Office of Public Guardian (OPG) for the registration of your LPA.
All costs for the LPA are one-off costs, and there are no further hourly charges for time taken to work through your estate planning needs, which is the case with Solicitors.
Please note, however, the cost of storage is charged per annum to keep all your documents in the secure storage facility.
The first stage is a discussion so your current situation and your estate can be assessed. Each area of the planning will be outlined in detail alongside costs.