NO WILL
If you fail to make a Will and eventually die, you die ‘intestate’. Intestacy rules will apply which set out who will inherit (beneficiaries) and by how much. This will not likely be in line with your wishes. Also if beneficiaries cannot be traced your assets will pass to the Crown, meaning your loved ones will not inherit from your estate at all.
Not having a Will in place can have other catastrophic effects on your death as follows:
Single parent
children being taken into care by social services as no guardian had been appointed
Unmarried couple
the surviving partner not inheriting anything from the estate of the deceased partner
Married couple
less money/assets than intended going to the surviving spouse under the rules of intestacy
Separated couple
your money/assets going to your spouse even though you are separated
WHO SHOULD MAKE A WILL?
The simple answer is EVERYONE!
More specifically:
- Anyone who has relatives/friends that depend on them.
- Anyone who owns property or any other assets.
- Anyone who wants to decide how his property or assets should be shared
Consider the risks of a basic will or no will at all
INHERITNCE TAX PLANNING
If you already have a Will in place, CONGRATULATIONS!!
However, can you say with certainty that your Will has properly addressed any Inheritance Tax Liabilities that may arise as a result of your death.
In the event of your death, if your Estate is above the threshold which an individual’s Estate has to pay tax, your loved ones would have to pay 40% tax on the amount over and above these thresholds before they will be allowed to access your Estate.
If these funds are not readily available on your death, they will be forced to sell assets/property you have left them to pay this tax. It clearly may have been your intention, for example, for your son (who is your sole survivor) to inherit your property and to live in the property as his home with his family, however if they are forced to sell this property in order to pay an Inheritance Tax bill, your wish would not come to fruition. If you have a Basic Will in place, it is not likely that Inheritance Tax Planning considerations have been put in place.
Even if you do not have any immediate Inheritance Tax liabilities TODAY, it is always advisable to make Inheritance Tax provisions in your Will as liabilities may arise in the FUTURE.
CARE FEES
With an aging population, more and more of us are going into care on retirement. The annual fees for care are becoming more and more expensive year on year with Ageuk estimating the cost of care in care homes averaging at £600 per week and £800 per week in nursing homes, totalling £31200 and £41600 annually.
Only those whose assets total £14250 or less will receive a fully funded place in a care/nursing home. This therefore means that those who own their own home and have worked tirelessly to pay off their mortgages during their working life, would now potentially have to consider selling their home to pay for their care fees.
If you or any friends of family have any concerns regarding care fees,
LASTING POWER OF ATTORNEY (LPA)
Should a situation arise where you are incapacitated (do not have the mental capacity i.e in a coma or suffering from dementia) and unable to continue to manage your affairs, it can be invaluable having a reliable person, who is able to manage your personal affairs and remove the anxiety of having unpaid bills, at a time when you most need peace of mind.
Watch this video to consider the risks of failing to have an LPA
