Whilst 2020 has been an odd year, it has made people think a bit more about putting their affairs in order – for some that has been clearing out homes and gardens and for other this is catching up on long overdue paperwork – updating wills, organising powers of attorney etc. If you haven’t done this already, there is still time to end 2020 on a high!
If you haven’t got a will, put this at the top of your list
Two thirds of the UK population don’t have a will. Without a will, your estate is intestate and passes under rules that were written almost 100 years ago – and could omit those you care about. Don’t rely on this! A New Year (indeed decade!) is a great reason to think about making or updating wills.
If you have a will that is more than five years old, review this.
There can be all sorts of complications if you don’t have a current will. Whilst you don’t need to amend your will if addresses change, check to see that the terms are still up to date. Updating wills can ensure that those you wish to inherit will do so, without it becoming a headache.
Inheritance Tax – are you up to date?
If your will is old, it may contain out of date inheritance tax planning. An example is a discretionary trust within your will, which was vital before 2007, but less so now.
Inheritance Tax – do you need to plan to reduce this?
A solicitor can help advise on tax efficient ways to administer your estate, including:
- gifts of capital (you need to survive seven years)
- gifts of assets (you need to survive seven years and not benefit from the asset but beware other taxes like capital gains tax – often trusts can help with this)
- gifts of surplus income (you must keep meticulous records)
- preserving the residence nil rate band (£175,000), which starts to taper once your estate goes over £2m.
Inheritance Tax – have you completed nominations for life policies and pensions?
This simple task ensures that any lump sum will pay out inheritance tax free and quickly – regardless of your age or wealth. This is vital!
Have you put a Lasting Power of Attorney in place?
There are LPAs for property and finance decisions and, separately, for health and welfare decisions. As well as having in place for peace of mind that your wishes will be fulfilled, these are invaluable if you don’t share a bank account with your spouse or rely on them financially.
Why see a solicitor?
- They know their stuff: It takes an average of six years to qualify as a solicitor. Once qualified, solicitors are admitted to the roll by the Law Society. You can’t call yourself a solicitor without this. They are also regulated and insured so you are protected by the firm’s complaint procedure, the Solicitors Regulation Authority as well as professional indemnity insurance. This isn’t always the case for other legal service providers.
- They are specialists: Solicitors worth their salt tend to specialise and not be general practitioners. So, the solicitor who can help you with your will is unlikely to be able to help you with your house purchase.
- They are independently accredited: Generally, solicitors undertake further exams in the area in which they specialise and follow their code of practice. For example, I am accredited by Solicitors for the Elderly (SFE) and the Society of Trust & Estate Practitioners (STEP).
- They give advice for your circumstances: Solicitors spend time with you (either face to face or via a video platform) to understand your family circumstances and provide clear and practical advice. Such important documents cannot adequately be dealt with via an online service.