Planning for the Future
A Client Guide on Wills, Probate, Discretionary Trusts, Powers of Attorney, & Inheritance Tax Planning
What is a Will?
A Will is a legal document that sets out your wishes on what should happen to your estate on your death.
Your Will
If you have a Will, is it time for a review?
A few important issues you should consider when planning for the future are:
- Has there been a change in your circumstances?
- Have you recently married?
- Are you contemplating divorce proceedings?
Why do you need a Will?
It is always recommended that you have a valid Will as it enables you to:
- Say who you wish to benefit from your estate
- Consider and provide financial care and guardianship for your children or future children
- Provide tax efficient planning and to create discretionary trusts where appropriate
- Avoid the complications of intestacy (where you die without having made a Will)
Reviewing your Will
We recommend you review your Will every 2-3 years. It should be updated to reflect any change in circumstances. Especially in certain circumstances including (non exhaustive list):
- In contemplation of marriage
- Buying a property in joint names
- In contemplation of divorce
Power of Attorney
A Power of Attorney is a powerful legal document whereby you give your authority to another person, to manager your affairs and to take actions on your behalf. This person is known as your Attorney. You can appoint an Attorney to carry out a specific action, for example, act on your behalf in a property transaction.
However, a Lasting Power of Attorney can be drawn up which gives your Attorney the powers to act on your behalf to do anything you can lawfully do with your estate while you are living. The Power can be delayed until certain circumstances occur, for example, should you become mentally and/or physically incapacitated.
There are two different types of LPA : a Personal Welfare LPA and a Property and Affairs LPA.
Who can make an LPA?
Anyone over the age of 18 who has the full mental capacity to understand the use and effect of an LPA.
Why would you need an LPA?
An Lasting Power of Attorney is an convenient instrument that allows:
- Your Attorney(s) to deal with your affairs including finances
- You to determine your arrangements for your future care
What happens if you do not have an LPA?
In the event that you are unable to manage your affairs personally:
- An application has to be made on your behalf to the Court of Protection
- A Receiver, usually a member of your family, will be appointed by the Court to manage your affairs
- Time consuming and costly
- This may cause inconvenience and distress to you and your family
Probate
Probate is the administration of a person’s estate upon death.
If you have a Will:
Your Executor applies for probate if the estate is over £5000.
If you do not have a Will:
This is called Intestacy and distribution of the estate is governed by Statute called the Intestacy Rules.
A Grant of Letters of Administration must be obtained.
Inheritance Tax (IHT)
No IHT is payable if the estate does not exceed the Nil Rate Band. IHT is payable at the rate of 40% on the value of your estate over the Nil Rate Band Your estate may attract tax exemptions. IHT must be paid before the estate can be distributed.
What Thomas Dunton can do for you
We will act on your behalf to minimise your difficulties and help you dealing with these matters at a distressing time. Our sympathetic staff will support you throughout and handle all necessary procedures as efficiently and speedily as possible.
