Putting your legal affairs in order

by BDAA Trustee Anna Molter, a Solicitor at Barcan+Kirby

An overview of the legal documents you may need

  • Will
  • Lasting Powers of Attorney
  • Trusts

What if you die without a Will?

  • Court application to appoint an Administrator
  • Funeral delays
  • The law dictates what happens to your estate
  • Your spouse may not benefit from all of your estate
  • Estranged family members may benefit
  • Distant relatives may benefit
  • Missed opportunity to mitigate Long term care fees and Inheritance tax

What to include within your Will?

  • Executors and Trustees
  • Funeral wishes/directions
  • Appoint guardians for minor children
  • Exclude estranged family members
  • Gifts – cash, property or jewellery/tools
  • What about your pets?
  • Include trusts to mitigate long term care fees/Inheritance tax
  • Include trusts for grandchildren

Mitigating future care fees

  • Leaving share of property on trust for the surviving spouse
  • Leaving cash/investments/savings on trust for the surviving spouse
  • No surrender of assets now
  • Protects assets against assessment for payment of care fees
  • Protects assets against misuse + succession if spouse remarries
  • Property trust qualifies for Residential Nil Rate Band Inheritance tax relief

Other trusts within Wills

  • Gifts to minor children (who cannot inherit until a minimum of 18)
  • Disabled beneficiary
  • Beneficiary is in receipt of benefits

Powers of Attorney

  • Enduring Power of Attorney (before end September 2007)
  • Lasting Powers of Attorney (LPAs) (since October 2007)
    • Financial Property & Affairs – with consent and if you lost mental capacity
    • Health & Welfare – only if you lost mental capacity

Why make Lasting Powers of Attorney?

  • You choose attorneys
    • Can be family/close friends
    • Position of trust
    • If two or more attorneys appointed – will they work well together?
    • Should you have an impartial attorney as well?
    • What about a professional attorney?
  • Appoint replacement attorneys
  • Add instructions or preferences within the document
  • Registered at Office of the Public Guardian before use
  • Can be revoked by choice or by the court
  • Revokes on death – Executors of Will then take over affairs

What to include in your LPA

  • Ethical investing
  • Release of Will to attorneys
  • Authorising Discretionary Portfolio Management
  • Vegetarian/Vegan diet
  • Likes/preferences e.g. Classical Music, Horror Movies
  • Style of dress
  • Religious beliefs

Lifetime Trusts and Tax planning

  • Cash or Property can be transferred into trust
  • Up to £325,000 – Potentially Exempt Transfer
  • Survive 7 years – free from Inheritance Tax
  • Inheritance tax friendly investments
  • Making tax free gifts:
    • £3,000 worth of gifts each tax year (6 April to 5 April) 
    • wedding or civil ceremony gifts of up to £1,000 per person (£2,500 for a grandchild or great-grandchild, £5,000 for a child)
    • normal gifts out of your income, for example Christmas or birthday presents – you must be able to maintain your standard of living after making the gift
    • payments to help with another person’s living costs, such as an elderly relative or a child under 18
    • gifts to charities and political parties

This is just an overview of the main areas. Please seek expert advice as needed.

Please see here for information about Lasting Power of Attorney

Please see here if you would like to leave a gift in your will to BDAA