Making a Will

A Will is a document (or documents) which outlines what you want to happen with your assets and affairs after you die. It should also appoint executors – the person or persons responsible for administering the Will – and identify who you wish to act as guardian to your children if they have no other parent.

A Will only comes into effect when you die and can be changed or revoked at any time before that.

In order to make a Will, you must be of legal age (18 in England and Wales – or younger, if you’re in active military service in a time of war). You must also be of sound mind: in other words, capable of understanding what you are giving away, who to and in what circumstances.

For a free copy of our detailed factsheet about making a Will, Click Here.

Inheritance Tax Planning

The sharp rise in property prices in recent years has meant the Inheritance Tax rules now affect many more people. It’s therefore important to plan your affairs in the most efficient way – to ensure that your family doesn’t lose a large percentage of your legacy.

These are the basic rules:-

• For UK residents, any property that passes between a husband and wife (or between civil partners) during their lifetime, or on death, is free of Inheritance Tax.
• There is a fixed tax-free allowance, known as the nil rate band (currently £300,000), which can be used every seven years or on death. Amounts over this may be subject to Inheritance Tax at either 20% or 40%.
• There are other allowances and tax exemptions, such as gifts to charities – but the majority of gifts over and above the allowance will be subject to Inheritance Tax.

However, there are a number of ways to plan your affairs more effectively, so that you can reduce any potential inheritance tax liability on your estate.

For a free copy of our inheritance tax planning factsheet, Click Here.

Enduring Powers of Attorney

An Enduring Power of Attorney, or EPA, allows a person to choose who will act for them if they can no longer act for themselves. Essentially, it’s a safeguard, in case accident or illness should disable someone to the point where they are no longer capable of managing their own affairs.

(It’s also significantly less costly and time-consuming than the alternative, which is for family or friends to apply to the Court of Protection for a Receiver to be appointed.)

The person appointed to act as Attorney should be a trustworthy relative, friend or professional advisor - and the document should be lodged safely at home or with a solicitor.

For a free copy of our factsheet about Enduring Powers of Attorney, Click Here.

Living Wills

A Living Will (also known as an Advance Directive) is a formal document, in which people set out in advance the kind of treatment they do or do not wish to receive, in the event that they subsequently become incapable of communicating their own wishes.

It normally covers three situations: -

• Permanent physical illness.
• Permanent mental illness.
• Permanent unconsciousness.

It can also record particular types of medical treatment which a person may or may not wish to have, such as artificial breathing or feeding.

A Living Will is only concerned with medical treatment and does not deal with a person’s property or funeral requests (these should be dealt with in an ordinary will).

For a free copy of our tax factsheet about Living Wills, Click Here.

Trust for Lifetime Use of Property

This kind of Trust is most useful in two situations:-

• When you’re balancing the interests of a new family and an existing one. For instance, if you have children from a previous marriage, you might be concerned that those children would not inherit, should you die before your new partner. However, you might also be concerned that, if your share were to go directly to your children, your new partner might be forced to leave your home. A Lifetime Use Trust can help to ensure that these interests are balanced as you would wish.

• Guarding against losing your home to pay for nursing care. Every year, an estimated 70,000 homes are sold to fund care costs or generate additional income in old age (Source: Liberal Democrat Party 2003). A Lifetime Use of Trust could help to prevent this happening to you.

For a free copy of our tax factsheet about Trusts for the Lifetime Use of Property, Click Here.