Estate planning can prove to be a difficult task, especially without legal aid. However, there are certain aspects that you can tackle by yourself to make this complicated procedure simpler.
Knowledge of what is entailed should help you to go about the process of estate planning in a much more organised way. The team at Legacy Wills have put together a guide listing the basics. Check them out below:
Why it’s important to create a Will
Most of us tend to avoid thoughts and situations that remind us of our mortality. Writing a Will is one such act that often gets brushed under the carpet.
Despite the awareness regarding the importance of writing a Will, there are many people in the UK and also worldwide, who either turn a blind eye towards this important step or who believe that they have plenty of time before it needs to be done.
Before moving on to the importance of creating a Will, here are some statistics that you should be aware of…
- 76% of people aged between 18 and 34 have not drafted a Will.
- 68% of people belonging to the age group of 35-54 are yet to create a Will.
- 36% of those aged 55 and above have not created a Will.
The statistics above indicate how a sizeable portion of society are at risk of leaving behind a financial mess after they are gone. Even if we were to excuse the recklessness that comes naturally to us when we are young, being above 35 and still not having a Will exposes us and our families to a much greater risk.
Dying intestate implies that the legacy and its distribution comes under the direct control of the state judiciary. The wishes of the estate owner no longer play an important role in determining or influencing the judiciary’s decision to distribute the assets.
Pick the right team
There are many problems that can arise relating to Will disputes when wrong individuals are entrusted with big responsibilities. This makes it important for you to appoint the right people to the right positions and put in place a team that acts in your best interests.
A good way to begin would be to make a comprehensive list of everything you own and owe. It may include investments, insurance policies, collectibles, business interests and so on.
Finding answers to the following questions should help you immensely when making plans for an estate:
- Whom do you wish to nominate as beneficiaries?
- Whom can you trust with the responsibility of looking after your children?
- Whom can you rely on to properly execute the Will?
- Whom will you appoint as the decision maker for your financial and medical affairs, should you become unable to look after them yourself?
Drafting the Will
Once you have understood the importance of creating a Will and addressed the important questions listed above, you can proceed to the next important step, which is to draft the Will. The procedure has been explained in detail here for your reference.
You have a few options. You can either get a solicitor to draft a Will, but they will whack on a hefty fee to do so! Or, you can do it yourself. You can download a free will kit template and then pay to have your Will stored safely.
Name an Executor
The role of an Executor demands that you appoint the right individual to that post. It is a huge responsibility in itself and one that can only be given to a person credible enough to handle them.
The responsibilities of an executor include handling the distribution of assets, filing of tax returns on behalf of the estate and also processing the claims received from creditors. It is possible to appoint a person from your family or a friend as the Executor of the Will, if you trust them to be responsible enough.
However, if you do not feel your loved ones can handle such a huge responsibility, especially whilst grieving, you may choose to hire a professional executor instead. It should be noted that such executors charge a certain fee in return for the services they offer.
Assign a Power of Attorney
Giving away Power of Attorney is difficult since we are almost never sure who to trust with so much power over an estate.
However, once you have figured out who you can trust to look after the important affairs of your estate, granting them the power of attorney can make matters simpler for the both of you.
By giving away this privilege, you are also safeguarding yourself against the potential problems that can arise in the event of you becoming less capable to make important decisions.
Creating a Living Will
A Living Will, also known as an Advance Decision, is a document that makes it legally binding to follow the instructions of the testator relating to the medical treatments that they wish to refuse. A Living Will is usually created citing the possibility that the testator may become incapacitated and therefore unable to make important healthcare decisions.
The Living Will prevents doctors and families from subjecting a testator to treatments he or she would not have approved of, if they were of sound mind. An important point to be remembered is that a Living Will can only include treatments that are to be refused and not those that the testator would prefer to undergo.
Health and Welfare Lasting Power of Attorney
As the owner of an estate, you have the option to create a lasting power of attorney (LPA) – there are two types: the first is the Health and Welfare Lasting Power of Attorney.
If you are concerned whether the wishes specified in the Living Will are duly executed or not, you can grant the Health and Welfare Lasting Power of Attorney to a person you trust to make the right decisions relating to your health.
Property and Financial Affairs Lasting Power of Attorney
A Property and Financial Affairs Lasting Power of Attorney on the other hand is granted to a person who can be entrusted with crucial decision-making related to the financial affairs of your estate.
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Update your Will
For those who have written their Will a long time ago, re-evaluation of the Will every six months or so is advised. Life circumstances may change and the testator must revise the written Will according to prevalent conditions.
According to statistics, 25.7 million life insurance policies are currently in place in the UK. However, it also tells us that 8.5 million people are not covered by health insurance of any kind.
By creating a Will, you may have taken a step towards protecting the future of your loved ones, but it may not be enough to make their future completely secure. It is therefore advisable to be covered with a life insurance policy that looks after your family monetarily and ensures their sound financial health, even when you are not around.
Once you have bought the right policy, you may have to list in your Will the beneficiaries who can claim their right to the policy.
If a testator wishes to be laid to rest in a particular way, then the preferences regarding this should be specified in their Will. These preferences can include the desired type of memorial service and the preferred place of burial. The testator should also make their family aware of these wishes.
If you have been running a business, then you may have to include a succession plan in your Will. This plan should be such that it ensures a hassle-free transfer of ownership, while at the same time providing you with the necessary financial relief for your retirement.
It should contain information regarding the responsibilities you want specific individuals to shoulder. Having a succession plan in place ensures that your business does not face an inconvenience of any sort in the long run.
Storing Important Documents
Ensuring that you have the necessary documents is important, but storing them in the right manner is an essential aspect that should not be overlooked. It is extremely crucial that these sorts of documents are well preserved to avoid any legal dispute.
Ensuring a fully funded Trust
Creating a Trust but not transferring assets to it can lead to its dissolution. Thus, merely establishing a trust is not enough. Once a trust has been put in place, you may have to transfer your assets into it to prevent it from becoming legally invalid.
Debts and Loans
The loss of a family member should not be accompanied with repaying debts or collecting the money owed to the creator of the Will. Necessary efforts should be taken by the testator to ensure that their family is not subjected to any inconvenience owing to loans and debts.
Legacy Wills can provide you with the necessary legal guidance that is often required in the process of estate planning. Along with assisting you with this, our legal experts can also guide you through inheritance tax planning and Will Writing too.
Contact us today and get access to the Will Writing Services that are most suitable for you.