Expect the unexpected. Addressing estate planning and mortality.

Life is comic in texture and tragic in structure. Nobody likes to think about the certainty of our own demise. Nobody likes to think about estate planning and mortality. It goes against millions of years of evolution to consider not being around. In truth, however, as social beings, our worlds extend beyond ourselves. Those we care about, form a part of our world that persists after we die. 

Ask yourself, which is more a part of you, your loved ones or your little finger, then ask yourself which would you rather lose. 

In planning for end of life, you are taking an altruistic step for those you care about. I want here to consider some of the matters that you might open up for discussion. 

  1. Wills. In the absence of a well drafted will, there’s: i) a high chance of confusion and insecurity amongst those you love; ii) a decent chance of your estate’s ultimately being lost to care fees or a future spouse of your current partner and iii) a material chance of catastrophic intra-familial conflict.
  2. Funerals. The one people hate to think about. Where no discussion on how your funeral might be conducted, has taken place, those you love will be faced with a significant organisational burden, under real time pressure, whilst newly bereaved. They are likely to seek outlet for their feelings of loss ,in ceremony and over spend around the funeral.
  3. Lasting power of attorney. Documents which appoint those you trust to manage your affairs should you lose mental capacity. Only 2% of people have them. Those that don’t risk a freezing of shared assets; lengthy and hugely costly pursuit of court orders; inability to consent or reject medical treatments and loss of decision-making power around residential care. 
  4. Insurances. Life, critical illness, mortgage cover. In a sense, the only reason anyone works is to provide some certainty in the future for those they love. Catastrophic loss can be protected against, and I urge you to take seriously the notion of having enough insurance in place. 

 

I don’t want to quote actuarial statistics in this article, though as one in the will industry, I will say that I ask every client that I engage the question: “does any medical reason make preparation of the will urgent in the order of 14 days?”. Those who answer yes to this, number less than 2%. Notwithstanding, I find myself attending hospital beds (more recently car parks) to obtain signatures, with frightening regularity. 

Act now, it’s later than you think!

You don’t need to do anything more at this point, than make an enquiry, have the initial conversation, begin! Speak to our client advice team on 0121 202 4714 or click here and we’ll call you.

7 Reason to Write Your Will in 2022

The Estate Planning industry struggles with the somewhat unenviable notion that the services we perform require our clients to reflect on a time when they are not around. Nobody likes doing this, and we find that it is almost always an external event that gives someone pause to reflect and get their affairs in order. In any case, making a Will is a very important job and we have listed 7 reasons to write your Will this year.

 

  1. You’ve considered making a Will. This sounds trivial and implied, however, if you’re even faintly considering dealing with this ugly matter, I encourage you to guard that momentum jealously. Failure to make a Will can be catastrophic and all too often only enters consciousness when time is short, or there’s a disaster that affects you directly, when and it may be too late!
  2. We’re still in a global pandemic. Without wishing to appear pessimistic, the threat of Covid has far from passed. Restriction lifting presents a high watermark for near term risk from the disease, moreover, health services (including emergency care) are impaired (to a ‘multi-decade’ degree). Our firm has spent all together too much time meeting clients in hospital carparks!
  3. Changes to the law. Succession and in particular inheritance tax law, are in a state of perpetual evolution. The manner in which tax exemptions are applied, in particular, has far-reaching consequences for many will. Tax policies may tighten further as we seek to repay debts incurred during lockdown. By way of example, it is surprisingly common to see older wills with elements like ‘survivorship clauses’ in wills e.g. ‘if X survives me by 30 days’, such clauses have potentially serious tax implications. That’s why it’s crucial to get expert advice when making a Will.
  4. A loved one has fallen ill over the pandemic. Many of us have suffered loss over the course of pandemic. Perhaps not as a direct result. Nonetheless, this my have brought the importance of forward planning into sharp relief. It may even have resulted in an inheritance for which planning should be considered. 
  5. A major life event is in the offing or has taken place. We have seen a surge in those marrying, having children and moving house post lockdown. This may be linked to the reopening of services, rising asset prices, or pent-up demand further to government agency shutdown. You should always make a new will or review your existing one, when your circumstances change significantly and the ’20-’21 have represented pivot points for many.
  6. Following on from ‘4’ we have all gone through a period of reflection and reorganisation, if you are in a new job, a new home or other life configuration that feels unfamiliar, now may be the time to act. Once established in the day-to-day fury of a new job or family, you are unlikely to step back and deal with issues as far reaching as estate planning. Act now if able!
  7. You are able to make a will, and everyone else is! Lockdown restricted our ability to help many in need of Wills. Access to those, for example, in care homes, was limited. Face to face meetings are arguably the only way to create a robust document, albeit (untested) emergency law was implemented. Demand for Wills rose by 300% and remained high. The current period of relative normality may represent a good time to manage affairs. 

If you’re considering these issues and are thinking about making a Will, I urge you to act now, speak to our client advice team on 0121 202 4714 or click here and we’ll support you.

7 things to avoid with your Will

Will Non-exhaustively!

  1. Putting it off. People hate doing it and making a will usually enters our consciousness at a moment of existential horror. It goes against all of our hopes an instincts. If it’s on your radar, and you’ve some momentum, guard it jealously and keep going!

 

  1. ‘Sideways disinheritance’ is all too common. Mr A and Mrs A are married and have one child ‘Sophie’. Mr A and Mrs A are responsible parents and create mirror wills leaving everything to each other and then to Sophie. Mrs A dies suddenly. Mr A eventually re-marries a lady who has two children from a previous relationship. Sadly, Mr A passes away soon after remarriage, without making a new will. Marriage having revoked Mr A’s will, his entire estate passes to his new wife and Sophie is left with nothing. There is no malintent on the part of Mr A only poor luck. This situation could have been avoided with proper drafting of his original document.

 

  1. Putting gifts together in the wrong order. Possibly the most common structural problem we see with DIY wills. There is a hierarchy by which gifts are distributed. If you want to leave your house to someone, so that they can actually live in it, you need to make sure the £5,000 gift you’ve left to the dogs’ home doesn’t trigger its forced sale by executors!

 

  1. Loss of property to care fees. Local authorities are more or less destitute. Delineation of social and health-based care needs is arbitrary and political. A properly drafted will can be used to protect gifts by your will from attack by cash strapped local authorities, should someone therein need late life care. 

 

  1. Losing your Residents Nil Rate Band (RNRB). Apologies for jargon, RNRB describes £175-£350k of inheritance tax exemption, losing it can cost your beneficiaries up to £140k. You only receive this exemption to the extent an appropriately valued property is left to descendants. Failure to achieve this can occur accidentally e.g. through poorly organised gifts e.g. see ‘3’ or a misworded trust. 

 

  1. Losing your ‘transferable nil rate band’. This describes the inheritance tax relief that passes between spouses. The risk of its loss speaks to a wider point about inheritance tax exemptions, they are not automatically applied. Clear paper trails must be established for each of a couple’s deaths and exemptions applied for by executors. 

 

  1. Gifting to pets.  Not in England or Wales, in any case. You can’t give to a pet in your will. A pet is a piece of property here (unlike Singapore, where gifting to animals supports an entire area of niche tax law!)

 

If you’re considering these issues, I urge you to act now, speak to our client advice team on 0121 202 4714 or click here and we’ll call you