Elements of planning

There are many elements that make up an effective Estate Plan. Here’s a simple breakdown of the type of documents that can protect everything that you own, for everyone you love.

Your Estate Planning Consultant will help you identify which combination of documents is right for you based on your personal requirements and desired levels of protection and certainty.

Last Will & Testament

In simple terms, making a Will gives you a choice over how assets are distributed so it forms the bedrock on any estate plan.

Unfortunately, there are laws in place that dictate where assets end up if you die without a Will, called the rules of intestacy, and the result may not be the way that you would have wished your money and possessions to be distributed so it makes sense to officially record your wishes.

Unmarried partners and partners who have not registered a civil partnership cannot inherit from each other unless there is a Will, so the death of one partner may create serious financial problems for the remaining partner.

For anyone who has children, it is strongly advised that a Will is made so that arrangements called Guardianships for the children can be made if either one, or both, parents die. Without this in place the courts will decide who looks after your children.

Will Trusts

Because the instructions are left in a Will, this type of Trust is created upon the death of the testator and is specifically designed to allow you to keep assets within your bloodline, offering more security and certainty than a simple Will.

The main reason why so many people include a Will Trust in their planning is to prevent their assets being diverted away from their loved ones because of an event in their life beyond their control occurring, or something that might happen or be happening in their beneficiaries’ lives they would like to protect against.

Assets leaving the bloodline is known as ‘sideways disinheritance’ and there are several causes including, but not limited to:

  • Re-marriage of a surviving spouse after first death
  • Divorce of a beneficiary
  • Early death of a beneficiary, and re-marriage of the daughter or son-in-law
  • Financial hardship of a beneficiary
  • Generational inheritance tax as assets pass from children to the grandchildren

Unlike a family trust created during a testator’s lifetime, a Will Trust will only take effect when someone passes away, so all assets will still be subject to the probate process including the associated costs and delays that can occur.

Lasting Powers of Attorney

A Lasting Power of Attorney (‘LPA’) is a legal document that is completed and signed by everyone involved, witnessed and then registered with the Office of the Public Guardian.

Once it is has been registered, the LPA enables someone you trust to be appointed to make decisions on your behalf about your finances , property and personal welfare. They will be legally able to take over should you become physically or mentally incapacitated or if you just need a bit of help.

There are two types of LPA:

Property and Affairs LPA:  This allows your Attorney(s) to make decisions on your behalf about your property and affairs, for example in paying bills.

Health and Welfare LPA: This allows your Attorney(s) to make decisions on your behalf about your personal welfare, for example in being able to talk to doctors.

You can appoint as many Attorneys as you wish and how you appoint them will determine what they are able to do for you and to what level.

Without LPAs in place, should you suffer a loss of capacity, a decision will be made for you by the state until someone you trust makes an application to the Court of Protection for a Deputyship order.

This process takes between 4 and 9 months to complete and costs in excess of £2,000.

Lifetime or Family Trust

Primarily used to avoid the burden of Probate, a Lifetime or Family Trust with a life interest is a private document between you and your chosen trustees.

Establishing a Family Trust allows you to pass property – often the family home – or other assets out of your ownership without losing control of them. It would reduce the cost and delays caused by the complex process of estate administration after you have passed on.

If you transfer your home or other assets into Trust you can remain living in your property, or have access to the assets you’ve settled but they will sit outside your estate for Probate purposes and so will be instantly available to those you care most about after your death.

Trusts have been around since the middle ages when the Knights of King Richard went with him on the Holy Crusades and wanted to protect their property whilst they were away and to ensure that, if they didn’t return, the property would be passed onto their chosen beneficiary without dispute.

To make certain this would happen they came to an agreement and created a “trust” with the monks at the local monastery who promised to look after the property, record a Knight’s wishes, and ensure those wishes would be fulfilled.

Today, we need to put a bit more of a legal framework around such a Trust and it needs to be drafted properly as an official establishment of a relationship and the details of the Trust, instead of being recorded by monks, are contained in a formal Trust Deed which acts rather like a family legacy rule book.

For this type of planning, we will instruct a qualified and experienced Barrister on your behalf.

Do it yourself

Confident that you know exactly what you need? You can use our online service to produce basic Wills and Powers of Attorney in just a few minutes at a time that suits you, without receiving any advice.

By creating a Genie account you can draft your documents using our quick on-line question-and-answer guide.

Note, that this is a self serve process and therefore, Estate Planning Pro has no responsibility for the outcome of your planning.

Let us do it for you

Not confident doing it yourself or prefer to do it with a real person?

Receive advice based on your personal circumstances to provide certainty with your estate planning. Click the link below to request a no obligation discussion that will provide you with all the information needed to make an informed decision.

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