"Once you're dead, you're made for life" - Jimi Hendrix

By Andrew Tricker, director, Lubbock Fine Wealth Management (LFWM)

Where’s the will?

Surprisingly, some people don’t get around to organising and writing their will. Among UK
over-55s, 42% don’t have a will (2018 survey by Macmillan Cancer Support). Looking at Royal London, YouGov, IRN Research and Orchard, the following interesting facts emerge:

  • 5.4m UK adults don’t know where to begin when it comes to writing a will.
  • Around 54% of adults don’t have a will.
  • Six in 10 (59%) of parents do not have a will, or have one that’s out of date.

It’s perhaps no surprise that the 27-year old Mr Hendrix hadn’t made a will when he died in 1970, but, as the litigation on his estate is still running, there’s a lesson there for the rest of us. 

Making a will

A will won’t save you tax or change the assets you own, but it can delay inheritance tax
payments and help those left behind to distribute your assets in accordance with your wishes and without recourse to expensive lawyers. As such, wills should be a first step in any estate planning exercise and should be updated every two years.

Sometimes there’s a good reason for delay, such as complex family affairs, but more often than not people like to put the whole matter on the back-burner so as to avoid contemplating their own demise. And making a will isn’t even that difficult to do.

There are various ways to go about it. First, via the recommended method of going to a
solicitor. Second, through charity schemes and third, there’s the DIY will option. A DIY
solution might be suitable for very simple estates but any significant wealth and/or assets such as businesses and properties, or in the case of unmarried couples, or couples with children, a more sophisticated will drawn by a solicitor is advisable.

Intestacy

When an individual dies without a will, the UK’s intestacy laws dictate that specific
instructions from the state must be followed. Those instructions aren’t necessarily appropriate and can cause families huge problems. For example, in the case of a married couple with two children where the husband dies suddenly:

  • The first £250,000, as well as all personal possessions regardless of value, would automatically go to the wife.
  • In addition, the wife would receive half of the remaining assets.
  • The two children would receive 50% each of the other half of the remaining assets at age 18.

It’s easy to see how this could impact even a relatively modest estate, and that’s not to mention the potential effect on family relationships.

In the case of a co-habiting couple, they are missing out on benefitting from the exemptions that marriage or civil partnership brings. To continue looking at intestacy, if one of the unmarried couple were to pass away, this would mean the ‘significant other’ would not be entitled to anything unless jointly owned. The inheritance would go in order of (1) children/grandchildren, (2) parents, (3) siblings, (4) grandparents and (5) uncles and aunts.

What about the children?

Regardless of marriage or civil partnership, what happens to minor children when both
of the couple die, for example, on holiday? If parents have not appointed a guardian, the state allocates one. And if more than one individual puts their name forward to the court, this could create a legal battle. An unknown guardian, or a battle between aspiring guardians, would have devastating effects on the already grieving children. As such, it’s prudent to appoint a guardian in your will to legislate against the untoward happening.

Lasting Power of Attorney (LPA)

As the years move on, so does our attitude towards physical and mental health. In the event of an individual becoming physically or mentally incapacitated, there are two different types of LPA. One covers property and financial affairs, the other, health and welfare. The former enables the appointed ‘attorney’ to make, or help the incapacitated individual make, decisions relating to money, tax, property and investments while the latter relates to health and daily routine e.g. washing and dressing, medical care and refusing or consenting to medical treatment. Without these in place, the court appoints a Deputy to make decisions on behalf of the incapacitated individual. It is vital to ensure that LPAs are put in place early and while an individual still has capacity, as going through the courts if incapacitated can be costly and time consuming.

Passwords, PINs and other required information

The introduction of the General Data Protection Rules (GDPR) in May 2018 means that much information (needed upon death) can’t be accessed without the right authorities in place. A way to navigate through this minefield is for estate executors or representatives to know how to access what is required post the death of their loved one.

We advise everyone to make a list headed something like: Where is everything and who to contact? The list should include all bank account details and passwords – this is particularly important for online accounts. It should also detail life policies, pensions, share portfolios and all assets together with locations and PIN numbers for all important accounts and for computers, laptops, mobile phones etc. Where possible, approximate values should also be noted. Our clients often ask us to hold a copy of their wills and letters of wishes in our safe, together with the name of the solicitor who holds the original. If you would like us to do that, please let your contact partner know.

Whilst it’s a good idea for your representatives to know where all your assets, PIN numbers and passwords are, it’s also vital to entrust this information to a member of the family or to lodge it with your will and letter of wishes. This list will need regular updates.

And finally...

Not only should everyone have a will but willsshould be regularly reviewed because family situations and relationships change over time. At LFWM we think that estate planning is important in protecting and preserving a family’s assets and no estate planning exercise is complete without setting up wills.

For further information on wills, estates and tax planning, please speak to your contact partner or to Andrew Tricker andrewtricker@lfwm.co.uk at LFWM

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