Key considerations when making plans for later in life
When Daphne Burgess died in 2009, at the age of 80, she left behind an estate worth £120,000. By the time her three children’s legal dispute over her will is decided in the Court of Appeal, legal costs will mean that almost none of it remains.
The dispute centres round the exclusion of Mrs Burgess’ son, Peter, from her will. Whether or not she truly intended to not pass any money onto him, it’s seems highly doubtful she would have wanted to see her children’s squabble leave them all with nothing.
Her case, and countless others, is testament to the importance of making solid plans not only for later in life, but for death. Read on for an introduction to some key considerations.
Inheritance tax is a controversial imposition, with many seeing it as a tax on death. But there is no way round it if your estate is worth more than £325,000.
Luckily there are means by which you can maximise relief, such as charitable donations and ‘gifting’ property and financial amounts before you die.
It’s essential you speak to a specialist solicitor and accountant about your rights and next steps, but do it quickly as gifts must be made more than seven years before your death to be exempted.
Power of attorney
It is a sad fact that, as we get older, the spectre of reduced physical and mental capacity looms for many of us. In these instances, having the right people to care for you, your estate and your rights is essential.
Power of attorney is really an extension of that support. A Lasting Power of Attorney legally enables a person or persons that you trust to manage your medical care and financial matters. You should look into this today, as it is your right to set out rules that your attorneys must follow, meaning you can be happy your loved ones will be protected.
Write a will
The fact Mrs Burgess wrote a will did not keep her offspring from entering into a dispute, but it undisputable that it’s far easier for inheritances to be dealt with when there is a will to execute.
Not only that, if you are a single parent, or have been widowed, and your children have not reached adulthood, you have no direct control over who cares for them if you die without a will.
If you don’t have a will, the inheritance you leave will be administered through the rules of intestacy, meaning those closest to you may miss out. Only married partners are protected under these laws, so even if you have been with your partner for years, they may receive no inheritance. Even husbands and wives will only receive up to £250,000, so if your estate is worth more than that, it’s even more critical.
Writing a will also enable you to decide who will take on the responsibility of executing your will. Where a will has been written, the executors are granted the right of probate, which is a legal authority to execute an inheritance. Where no will is written, your next of kin will be granted probate. This may not present any problems, but it could also lumber the wrong person with the exacting responsibilities of the executor.