Estate planning is not simply the act of writing a Will for when you pass away; it is about planning ahead and protecting your assets for both you and your loved ones.
The changing family structures in England & Wales will have an impact on the way you plan ahead for your later life.
Many couples are now cohabiting, with or without children, and are not married. Partners are not legally entitled to each other’s estate under the laws of intestacy. Therefore it is important to create a Will to ensure your assets can pass to your partner after you have passed away. Partners do not receive some of the inheritance tax benefits available to married couples, which is another reason to discuss estate planning to ensure you can pass assets tax efficiently.
If couples are married, with children, and do not write a Will; under the laws of intestacy, the spouse will only be legally entitled to a portion of the deceased’s estate. This could lead to the survivor being forced to sell their home and possibly out them in financial difficulties. In extreme cases the surviving spouse might have to sue their own children’s inheritance.
Lasting Power of Attorney (LPA)
The most common form of informal care is provided by your spouse, partner or family. However you cannot assume that your family will have the means or authority to care for you.
Many couples are now having families later in life meaning your children may not be old enough or responsible enough to manage your affairs. It is important to consider who can and cannot aid you with your finances; with an LPA document you can appoint a professional to assist with your affairs until you feel your family is able to act.
Geographical locations will also have an impact on your family’s ability to provide care; creating an LPA will allow your family to assist with your property & financial affairs without having to travel to you. Once an LPA is registered with your financial institutions, your nominated attorneys (usually your children) will be able to assist you from their own homes. The LPA will give them the authority to discuss your confidential information direct with institutions; this may be your bank or it may be a utility provider.
People are living longer but they are living alone; this makes their assets, particularly their homes, vulnerable for local authority assessments if they require care. There are home protection plans available, they are designed to minimise the local authority’s ability to include your home in care fee assessments.
Divorce in later life will also have an impact on your estate planning; divorce does not just result in people living alone but can also weaken relationships with children. If you already have a Will or LPAs it will be important to review them after a divorce.
There are an increasing number of mixed (sometimes known as blended) families in England & Wales; second marriages may result in complex relationships between children and step children. With effective estate planning, you can protect your assets from sideways disinheritance, ensuring “your” family inherits the assets “you” want them to.
If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here. Don’t delay ~ Act today!