Wills, Lasting
Power of Attorney
etc etc
Martyn Burgess
Independent Financial Advisor In Association with John Emptage of Bright Solicitors
Welcome
Welcome to Leech & Burgess IFA LLP Independent Financial Advisers
-A Fresh look at Financial Planning
It is important that we understand the benefits of financial planning but it is equally important that we understand the need to plan for the inevitable. As soon as we have assets or dependants – it is important that we should consider writing a Will and possibly a Lasting Power of Attorney.
Statistically 2/3 of adults don’t have a Will but by the time they die 2/3 of adults think they have a Will. Note the word “Think”.
This booklet has been produced with the assistance of John Emptage of Bright Solicitors to provide an outline of the importance of Will writing and Inheritance Tax Planning. Once described as a Tax for the rich- more and more people are falling foul by not planning ahead.
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Why make a Will?
Making a Will is one of the most important things you can do to safeguard the future of your family.
Seven out of ten people die without making a Will simply because they never got around to making one. Unfortunately it often means that their loved ones face financial uncertainty, legal red tape and most importantly considerable distress at a time when their thoughts are elsewhere.
Did you know that if you die without a Will:
•You could end up paying the government far more in Inheritance Tax than you should- money that should go to your family.
•If you are not married then your partner will not be entitled to any of your sole assets.
By making a Will you:
• Ensure that your affairs are in order and that your family is protected in the event of your untimely death.
• Protect your estate and ensure that you do not pay more in tax than is necessary.
• Make sure that your partners interests are protected – even if you are not married.
A Tailor made is not as expensive as you might think but offers the peace of mind for you and your family and will allow you to plan your future with confidence. It doesn’t need to be complicated either.
Bright Solicitors pride themselves on making sure you get the very best advice possible.
Lasting Power of Attorney
A Lasting Power of Attorney (or LPA for short) ensures that if you can no longer make decisions for yourself as a result of a stroke, dementia or unforeseen injury, you can choose someone you know and trust to look after your affairs.
There are two types of Lasting Power of Attorney:
• Property and Financial Affairs
• Health and Personal Welfare
A spouse or a close family member does not have an automatic right to take over your affairs if you have not made proper arrangements.
However, if you set up a Lasting Power of Attorney you must do it before you are no longer able to make decisions for yourself.
At Bright Solicitors we believe the whole process should be as easy as possible and we always:
• Explain to whole process clearly and in detail.
• Explain and give advice on all aspects of the Lasting Power of Attorney including all of the people involved.
• Complete all of the forms and paperwork and deal with the registration if you want us to.
• Act as a Professional Certificate Provider for no extra charge.
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If the value of your total estate, including property exceeds £325,000 (the current allowance), the Inland Revenue will claim 40% above this allowance before your estate is distributed according to the wishes of your will. Married couples may benefit from a joint allowance of £650,000 but this depends on certain circumstances.
This can be a voluntary tax but careful planning in conjunction with your Solicitor and Financial Adviser can usually reduce or eliminate this tax, enabling more of your assets to pass on to your family or chosen beneficiaries.
This can be achieved by way of:
• Will Planning
• Trust Planning
• Gifts
• Life policies written in Trust
Investments held in trust can still be accessed if necessary and may provide an income.
Think about this…
Where Inheritance Tax is likely to be a problem, planning and utilising certain exemptions will help to reduce the impact of the tax upon the estate.
Ask yourself this………Who do you want to benefit? The State or your beneficiaries?
As we get older and are health is at risk we are far more likely to need some form of care. Eventually we may have to go into a care home.
If you require long term care and have assets worth more than the personal allowance as set by the government every financial year, you may be liable to pay all of your care cots unless you qualify for NHS continuing care. The family home is usually the largest asset and may have to be sold to meet the cost of such care. Other assets will be taken into consideration such as savings, investments and income from pensions.
If you transfer ownership of the property this will deemed as Deprivation of Assets and legislation provides the value of the transferred asset will be taken into account when being assessed.
As if that isn’t enough – giving away your home is a risky business and complications could arise if the person who has been given the property faces divorce, insolvency or dies before you.
You can protect your property by changing the way you own the property jointly.
Planning and advising is this area of financial planning is specialist and we are one of only a few Financial Advising Practices to hold the required qualifications.
We are also members of SOLLA- the Society for Later Life Advisers.
Paying for Long Term Care
The capital limits have increased to £14,250 (lower capital limit) and from £22,250 to £23,000 (upper capital limit) with effect from 6 April 2009. These amounts are increased each April in order to ensure that capital limits keep pace with inflation. The National Assistance (Sums for Personal Requirements and Assessment of Resources) Amendment (England) Regulations 2009 provide for the new capital limits.
Anyone with capital (including property) of between £14,000 and £23,000 may be entitled to partial State Assistance. If your capital exceeds £23,000 you will need to pay for your own care.
Many homes have to be sold each year to meet the cost of long term care. It is possible to provide cover to protect the loss of capital on the estate, should the client require long term care at home or in a nursing home. This is subject to the health of the client at outset.
We strongly recommend clients review this area of their financial planning, as failure to do so may result in assets and investments you had planned to pass on to your family being claimed by the Local Authority, with careful
planning the worst problems can be avoided and your estate can be passed on to the ones you love, not used up in care fees.
Who Needs Our Service?
• People now needing immediate long term care.
• Existing care home residents already paying for their care.
• Potential future care residents wanting to guarantee their care payments ahead of the possible need for care.
Existing or potential residents who want to ensure that their savings, investments and other assets pass to their family and loved ones on their death, rather than being depleted, or used up paying for care.
Those looking after the financial affairs of any of the above by way of acting as their “Attorney”.
Care Fees Continued
If you’re retired and living on your pension you may be considering equity release as a way of getting cash from the value of your home. If you own your own home and are 55 or over, you may be thinking about equity release because it could provide you with a lump sum, additional income or maybe both.
Before considering equity release
It’s important to check whether there are other ways you could meet your financial needs before choosing an equity release scheme.
Some ways might be to:
• Claim any benefits you might be entitled to or check to see if your local authority can help you to pay for essential home improvements.
• Trace any pensions you may have lost track of, using the Pension Tracing Service.
• Use your savings or sell your investments first, but consider getting
What is equity release?
Equity release describes a range of products only available to you if you are older, typically over the age of 55. They allow you to release the equity (cash) tied up in your home. The products have no fixed term and allow you to stay in your home for the rest of your life, unless you have to move into long term care.
These schemes can be helpful in certain circumstances but are not suitable for everyone. For example, they can be expensive and inflexible if your circumstances change in the future and may affect your current or future entitlement to State or local authority benefits.
When considering equity release, you may come across sale-and-rent-back schemes. Watch out as they are not a type of equity release.
How does it work?
You can either borrow money which is secured against your home, or sell part or your entire home. This can give you a lump sum, a way of topping up your income, or both.
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