Have you thought about your estate and what will happen when you die?
- To provide clear instruction regarding how the assets in your estate should be distributed on your death
- To appoint Guardians for dependent children
- Nearly two thirds of the adult population do not have a valid Will – this means money property and possessions could be left to someone they may not have chosen.
- Intestacy (Dying without a Will) can have a disastrous effect on those you leave behind, this may take months or even years to sort out
- Without a Will your Spouse or Partner may not automatically inherit all of your estate
- Marriage automatically voids a Will. If you have married recently your previous Will is no longer valid.
- Marriage after first death – all of the assets in the joint estate could pass to a new family Structure, or completely side step children from the relationship
- Creditors/Bankruptcy – If any of your beneficiaries are subject to creditor claims/Bankruptcy the inherited estate is fully at risk
- Care Assessment – following first death, should the surviving Spouse/Partner need Care then the whole estate including the family home would be assessed to pay for the cost of that care
- Divorce – if your children/chosen beneficiaries are subject to divorce proceedings then half of what you intended them to receive is at risk to Divorce Settlements
- Generational inheritance Tax – On Second death the remaining estate is likely directed by the Will to the beneficiaries. This then adds to their own estates and could impact their own Inheritance Tax.
Without the correct “Bloodline Planning” some, or all of your children’s or grandchildren’s (bloodline’s) inheritance could be lost.
The cost of care can vary depending on the area you live in. Your local council must calculate the cost of your care and how much you have to contribute from your resources.
If your eligible income is taken into account in a means-test you must be left with an income of £24.90 per week. This is known as your Personal Expense Allowance.
If your local council carries out a Care needs assessment and finds you need a care home placement, they will also do a means test this may take into account the value of your property if you own one as well as income and savings.
POWERS OF ATTORNEY
If you were to suffer an accident and be confined to bed or hospital, contract an illness or have a more serious accident that permanently incapacitates you or become mentally incapacitated as a result of old age or some other reason, then without an LPA in place, the ONLY way your financial affairs can be managed is by an application (by a relative or someone close to you) being made to the Court of Protection for Deputyship.
The application must provide personal information about themselves, their family, their own finances and the relationship with the person they wish to help care for. Medical evidence also needs to be obtained.
This process costs a considerable amount of money and can take anything between 12 weeks and 10 months, by which time your finances could be seriously damaged. Even worse, a Judge will make the final decision as to who is appointed as the Deputy and this may not be who you would have wished to manage your affairs.
For business owners that are near retirement business succession cannot be ignored. In some cases the business successor has already been identified.
You may have decided simply to sell the business, however many business owners prefer to see their business continuing its life even after they are long gone.
Creating a sound succession plan will provide several benefits;
- An insured agreement will ensure an agreeable price for a partners share for the business and eliminate the need for a valuation on death.
- The Life Assurance benefits will be immediately payable to pay for the deceased’s business shares.
- A Cross-Option agreement outlines the options to buy / sell shares upon death.
- A succession plan will ensure that the purchaser has the ‘means’ to buy the shares and the deceased’s family will be able to swap the business shares for cash.
- Using a Trust structure will keep the value of the business shares out of the Spouse/family’s estate for second death Inheritance tax whilst also protecting the value from remarriage, divorce, creditors etc.
- Passing shares on death to Trust for the benefit of Spouse/Family will mean the value of those shares is outside of the spouse/families estate most often Inheritance tax free if they qualify for Business Property Relief.
Get Advice Today About Estate Planning and Wills
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