A survey conducted by Will Aid shows that around half of married couples in the UK do not have a Will. This may be because many people think that as spouses, when the first spouse passes away, the surviving spouse will automatically inherit their estate. However, this is not always the case.
Any assets that are not owned jointly between spouses will not necessarily be passed to the surviving spouse in cases of intestacy (the name given to dying without a Will). If you are a married couple with children, the rules of intestacy state that your spouse will only receive a portion of your estate with the remaining portion going to your children. The amounts distributed may not necessarily be how you would have liked your estate to be divided. To find out more about intestacy, please click here.
Tax benefits – Spousal exemption
Spouses can pass assets between each other in life and by Will to an unlimited amount without any Inheritance Tax consequences. If you are married and die without a Will then you die intestate and in certain circumstances your children will receive part of your assets and not your spouse. This can mean that your estate might have to pay some inheritance tax. So instead of these funds going to your surviving spouse they go to the tax man.
Next of Kin – Lasting Power of Attorney
The term “next of kin” is commonly used and there is a presumption that the person you identify as your next of kin has certain rights and duties. Health professionals should always consult a next of kin, but the next of kin cannot sign or consent to, for example, care plans, end of life plans or other treatment options. This is a very misunderstood area of the law. They do not have the legal authority to consent, unless they hold a Lasting Power of Attorney or obtain an order from the Court.
Most people think that there are no problems if they hold a joint bank account with their spouse and one of them loses capacity. Ask your bank “What happens with my joint accounts if I lose mental capacity?” Here as an example is HSBC’s reply: “If we are notified that you have become incapable of managing your accounts, any joint accounts you hold will be inhibited unless a third party can present us with a registered lasting or enduring power of attorney or until we receive a Court of Protection order appointing a deputy to manage your accounts. Some pre-authorised payments, for example mortgage or utility bill payments, may continue to debit the account while it is inhibited.”
If you are married you should take advice concerning Wills and Lasting Powers of Attorney. Please start this important process by booking a free appointment with one of our experienced consultants. Please click here or telephone 01732 868190.