Estate planning may not be your top priority, and many feel it is not something that needs to be considered till later in life. Some even assume it is not relevant to them. However, regardless of your age or relationship status, getting your legal affairs in order could be one of the most beneficial endeavours you achieve this year.
Like any well-laid plan, knowing where to start is often the most daunting prospect. The Private Client team at Bridge McFarland LLP have put together some steps you can take and provide answers to a few frequently asked questions on why an estate plan is so important.
What age should you make an Estate Plan?
When it comes to estate planning, it would be sensible for anyone over eighteen to think about how to protect their estate or who they would trust to make decisions for them should they lose mental capacity. Although, there are certain milestones where it can be particularly important. Buying a property, moving in with a partner or getting married, having children, getting divorced, starting a business, or suddenly having a change in financial circumstances are just some of the critical life events that would make estate planning worthwhile. Have you recently gone through one of these new milestones? You should consider this now if you do not have any existing legal documents.
What legal documents are included in an Estate Plan?
Depending on your circumstances, the assets you currently own and your estate planning goals, your estate plan can comprise of various legal documents and detailed wishes. Some of the most important of these include:
- Creating or updating a Will
- Setting up a Lasting Power of Attorney
- Efficient inheritance tax planning
- Setting up a trust
Your estate and circumstances will be unique to you, so you must tailor your estate plan to your situation to protect yourself and your loved ones. To ensure you have considered all the options open to you, taking expert advice from a regulated professional will ensure all factors are considered, and you are aware of all the legal documents that can be included.
Why should I have an Estate Plan?
Some of the most beneficial elements of estate planning include:
- Make sure you have control over what happens to your assets.
- Make sure you have control over who administers and manages your estate.
- You can alleviate inheritance tax obligations.
- You can help avoid future inheritance disputes.
These documents are not just ‘good to have’ or only needed later in life. They are crucial legal documents that will ensure your wishes are followed and your loved ones are taken care of in the event of death or incapacity.
If you die without a Will, your assets will be distributed according to the rules of intestacy, meaning only a spouse or certain relatives can inherit. Another fact to consider is that there is no such thing as a common-law marriage. Consequently, regardless of how long you have been with your partner, if you are not married or in a civil partnership, and if you do not have a Will, there is a real possibility they would not benefit from your estate as you would have intended.
Furthermore, if you lose mental capacity – due to a sudden illness or accident, for example – and you do not have a correctly registered lasting power of attorney – contrary to common belief, your spouse or family members do not automatically have the legal authority to make decisions for you or manage your affairs. Therefore, the Court of Protection will appoint someone (a deputy) to do this for you, and you will have little to no say in who this will be. Find out more about deputyships and the court of protection.
Having appropriate legal documents in place that are drafted correctly by an experienced professional will provide peace of mind. Moreover, these documents will make it less stressful for your family and loved ones in the long run and will ensure that your wishes are met.
What should I do first, and can I create an Estate Plan without a Solicitor?
You could start identifying and listing your assets into tangible and intangible assets so that an effective estate plan can be put together. Tangible assets may include property, cars, jewellery, art, or other collectables. Intangible assets include money in bank accounts, pensions, shares, insurance policies or cryptocurrencies. Other popular items are your digital assets, including social media accounts, music, and photograph libraries.
You can compile these lists and start thinking about how you would want them distributed or looked after without legal help. However, putting this into a robust, legally binding plan should involve specialist legal assistance.
While there are services that allow you to create online DIY Wills or Lasting Powers of Attorney, this approach can leave you vulnerable to costly mistakes. It is always advisable to seek specialist legal advice from a regulated professional. Mistakes are easily made, which could invalidate the document, making things extremely difficult and costly for loved ones to resolve.
Also vitally important is ensuring you receive the proper advice regarding Inheritance Tax rules (IHT). Mistakes could leave you open to costly tax implications without understanding if these rules apply to your estate and the options open to you.
Regulated Estate Planning Solicitors
Even if you think your estate and how you wish this to be distributed is straightforward, our experienced legal team will talk you through the most sensible options available.
The specialist team of Estate Planning solicitors at Bridge McFarland LLP can support you by offering advice and guidance concerning your estate and helping you set up your documents, providing peace of mind that everything is in order and has been done correctly.
Our Private Client Services
We offer a range of services relating to your Will and Estate Planning, including: