Frequently Asked questions
- What if I Die Without Making a Will?
- Do you want the Government to decide for you?
- How do you protect your estate for your children from a different relationship?
- Why do I need a Lasting Power of Attorney?
- Why do you need a Will?
- Can I protect my property against Care Home Fees?
- The correct Will can allow you to:
- How do you keep your Will updated?
- Is my estate protected after separation or divorce?
What if I Die Without Making a Will?
Death is such a taboo subject that it's not surprising that over 70% of us risk bequeathing costly confusion to our nearest and dearest by not making a Will. Most people at some time in their lives consider putting their affairs in order, but the thought often passes without further action. There are of course the normal excuses of ‘we’re too busy’, or ‘I don’t plan on dying just yet!’ But we find for many people, the reason they had not got around to making a Will, is because they were not aware of the severe consequences to their family if anything was to happen to them, as they had just assumed that everything would be OK.
However, if you care about who inherits your estate, and you want everything to be ‘OK’, then you need an up to date professionally drafted Will.
Do you want the Government to decide for you?
This is because if you die without a Will, then the Government will decide who will inherit your estate in accordance with the Laws of Intestacy. These were drawn up in the 1920’s, and are now somewhat out of date! However, these laws state that your spouse may end up sharing your estate with your children or parents. Or if you are an unmarried couple, then your partner may not get anything.
If you do not make provision for young children, then the authorities will decide who is best placed to look after them, which may be hugely upsetting and disruptive. It can also mean that your partner (if you are not married) does not automatically become guardian of young children, even though they may be the father.
If you die without making a Will, your ex-spouse, may be entitled to claim part or all of your estate in certain circumstances! Even if your ex-spouse cannot make a claim, your children’s trust fund may fall under their control!
How do you protect your estate for your children from a different relationship?
Most people who co-own their home with another person do so as Joint Owners. They both own the whole property. On the death of a Joint Owner, the home AUTOMATICALLY becomes the sole property of the survivor - who can then do what they want with it. However this can cause problems:
If the survivor then remarries, it is possible that the whole of the house will then pass to their new spouse on their death, thus disinheriting the children of the first marriage.
The answer to this problem, is to change the way the home is owned from Joint Owners to Tenants in Common - a straightforward process that doesn't involve the mortgage company even if the property is mortgaged.
As Tenants in Common each owner owns one half of the property and, using a Will, can do whatever they wish with their share of the property on their death, including: leaving it to their (own) children so that is the surviving spouse remarries they will only own their own half of the property and can only give their own share to their new spouse.
This type of trust is called a Life Interest Trust and is sometimes marketed as a Property Protection Trust and we can help setting it up for your peace of mind.
Why do I need a Lasting Power of Attorney?
A lasting power of attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.
This gives you more control over what happens to you if, for example, you have an accident or an illness and can’t make decisions at the time they need to be made (you ‘lack mental capacity’).
If you lack mental capacity and you haven't managed to make this document then the only option left for your next of kin is to go to the Court of Protection and apply to become a deputy and get a court order, process which takes 16 weeks to get an approval (if the application runs smoothly and there are no issues) and costs 2-4 times more than making a Lasting Power of Attorney in advance!
Why do you need a Will?
A Will only gives away what has not been taken from you or what you have not spent. Understandably, people have reservations regarding this delicate matter, but the process need not turn out to be as upsetting and difficult as you might think. In fact, having made a Will gives you a feeling that you have done everything correctly and provides inner warmth that only comes in the knowledge that you have tied up all those loose ends.
But making sure that you have a Will is not enough; it has to be the right type of Will - one that is professionally drafted to take into account your wishes, and your personal and financial circumstances.
It's widely known that will writing can be done in a DIY format, and this is acceptable for some people, however for real security we recommend you seek professional advice through us.
Can I protect my property against Care Home Fees?
Most people who co-own their home with another person do so as Joint Owners. They both own the whole property. On the death of a Joint Owner, the home AUTOMATICALLY becomes the sole property of the survivor - who can then do what they want with it.
However this can cause problems: If the survivor has to go into a Nursing or Residential Home, as the sole owner of the property, the Local Authority has powers to charge the cost of care against the value of the whole house, again disinheriting the children.
The answer this problem, is to change the way the home is owned from Joint Owners to Tenants in Common - a straightforward process that doesn't involve the mortgage company even if the property is mortgaged.
As Tenants in Common each owner owns one half of the property and, using a Will, can do whatever they wish with their share of the property on their death, including:
leaving it to their (own) children so that if a surviving spouse needs care, the Local Authority can only charge the cost of care against the half of the house that they own - ensuring in either case that their children inherit at least half of the value of their home. In fact recent case law indicates that the value of half a house (providing the owners of the other half don't want to sell their share) is effectively Nil and in these circumstances the Local Authority may not be able to charge any of the cost of care against the value of the house.
We do, however, recommend that in the above situations provisions are also made in the Will, through a Will trust, to delay the gift and prevent the surviving spouse being forced out of the home and also to ensure that the surviving spouse can have access to the capital and/or income if the house is sold.
This type of trust is called a Life Interest Trust and is sometimes marketed as a Property Protection Trust.
The correct Will can allow you to:
▪ Specify whom you wish to inherit your estate, in what order and in what proportions so that you have comfort in the knowledge that your wishes will be carried out.
▪ Make specific legacies to family or friends or gifts to your favourite charities.
▪ Appoint suitable guardians for young children rather than leaving the decision to the Courts.
▪ Set up maintenance trusts for children to protect their inheritance until an age specified by you.
▪ Ensure the inheritance of your children or other beneficiaries should the survivor re-marry.
▪ Protect your share of the property from having to be sold to pay for the survivors future care fees, thus still having assets to leave to your family.
▪ Avoid paying 40% Inheritance Tax on your estate, so giving more to your chosen beneficiaries rather than the Government.
How do you keep your Will updated?
If you already have a Will, it is recommended that you review it every 2 to 5 years. Sometimes your wishes may not have changed, but the value of your assets and the law may have. As such it is very important to ensure that your Will does exactly what you want it to do; that it protects your assets and investments, and most importantly that you have taken advantage of various areas of flexibility within the law of estate planning.
Not all Will Writers are the same, based in Bexhill I am always available to visit my clients, so you don't need to worry about updating your Wills.
Is my estate protected after separation or divorce?
If you are separated your Will is still valid, so you must make a new Will, to protect your estate if anything happened to you tomorrow.
If you are divorced only the appointments which include your spouse are voided so the advice is to update your Will as soon as possible.