Lessons from 2019. Resolutions for 2020.
As we move into 2020, make a New Year resolution to protect your family and get your Wills, Lasting Powers of Attorney and Funeral Plans in place and up to date. Here are some of my own experiences in 2019 that show you why it’s critical to get good professional advice!
Wills for Married Couples
I visited a married couple to update their Wills. They had, very sensibly, made Wills 13 years ago when they bought their first house – at a time when they weren’t married. A year later they married – which in law revoked their Wills! They didn’t know this, so for 12 years they thought they had valid Wills, but they had none in place at all! If you are making a Will and likely to get married in the near future, we can add a clause in your Will “in contemplation of marriage”, meaning your Will is not revoked when you marry. So, don’t wait – if you are planning your wedding this year, you can still write your Will now, safe in the knowledge it won’t be invalidated after you marry. Or if you haven’t updated your Will since you married – call me now!
Wills for Unmarried Couples
I had an appointment with a couple who had lived together for many years but were not married. As we talked through their assets and finances, I was able to advise on the Inheritance Tax implications of their situation.
- Did you know that ALL assets left to your spouse/civil partner are exempt from Inheritance Tax – but this doesn’t apply if you are not married?
- Did you know that if you aren’t married and you have no Will in place, your partner is not entitled to any of your estate at all?
You don’t have to marry, of course. But if you decide not too, I can help you work out what this means for you in terms of estate planning and inheritance tax. I’ve prepared a document covering some of the main options. Ask me for this when you decide to make / update your Wills.
I always ask about the home you live in and what you want to happen to it when you die – or even if you become ill and need to move into care. Most couples hold properties together and want it to pass to their spouse when they are no longer here. And most tell me they want to make sure their children eventually inherit the house. After your death, there are several reasons this may not happen:
- Your spouse remarries and doesn’t make a new Will – the property would now pass to their new spouse and not to your children
- Your spouse remarries and changes their Will – and leaves it to their new spouse
- Your spouse becomes ill and needs to go into care – and the property is part of the assessment for care home fees.
I’ve worked with many couples in 2019 to add a “Protective Property Trust” into their Will, leaving their own share of the house in trust for the children. A “life interest” for your spouse allows them to live in it as long as they need to, but your share is protected against care homes fees and ensures it will be protected for your children. And the good news is that, unlike most other companies, I don’t charge extra for adding this into your Will.
I’ve prepared a document explaining this and answering some frequently asked questions. Ask me for this when you decide to make / update your Wills.
Lasting Powers of Attorney – don’t leave it until it is too late …
Only 3% of the adult population have an LPA in place (although this is starting to rise as people realise the importance of these documents).
I visited a client who was ill and had been advised by their medical team to “get her affairs in order”, including getting Lasting Powers of Attorney in place.
The Office of the Public Guardian has a backlog at the moment, and with the addition of the statutory wait times, the LPA process is currently taking 8-10 weeks. Unfortunately, this client had very limited time left as their condition is so serious 😕 so I discussed this with the family and we agreed it really would not be worth them paying OPG and my fees at that time. We talked about how they could help in other ways in the next few weeks. They were so grateful for my honest advice. It’s not about money, it’s about doing what is right for the customer …
In another discussion with an elderly person’s family, it was apparent that they gentleman in question had a dementia diagnosis and they needed LPAs to help him with financial and health decisions. However, his dementia was now advanced, and he no longer had the “capacity” to donate these powers to his attorneys. His family would now need to apply to the courts for “deputyship” instead – incurring quite large initial and ongoing fees.
Had he done LPAs when the disease was first diagnosed, or before, this would have prevented the issues that the family faced.
Getting LPAs in place early is critical – or it may be too late.
Guardianship for children
I’ve realised that the single most daunting thing about making a Will is thinking about what would happen to your children if you and your partner are no longer here. It’s a terrible thought, but have you considered what may happen if you don’t make this decision?
If you die without a Will, the courts will determine who should be given “legal guardianship” of your children. This may not be in line with your wishes. And the courts can take time – which may mean your children may have to live with others, or even strangers while this is decided.
I have had a number of conversations with young parents and the difficulties on choosing someone. What if I choose my parents and they aren’t around? What if I choose my sister and her partner and they split up? What if I choose my brother and he moves away?
My answer is always “Do what you think is right at the moment” and “consider including substitute guardians”. You can change your Will as and when circumstances change. But you won’t have any say at all if you don’t make a Will!
If you make your Will with me and take the enhanced storage package for your Wills and other important documents, you get free Will updates from me. So, there is no worry about the costs of changing your instructions later. Don’t hesitate – make your Will now and protect your children.
Failing to take professional advice can leave your estate at risk. I spoke with a couple who had purchased the “Couples Will Kit” from a well-known high street store. The lady had been advised that this was sufficient for the needs of her and her husband, and that it would be advisable to leave a copy with her executors.
She filled in both forms, but with exactly the same information on both, and gave one to her executors. In effect she had only made one Will – for herself – and there was no Will for her husband. So, for many years they had thought that they both had valid Wills in place and actually only the wife had a Will!
We discussed what they really wanted, and I made sure they both had new, updated and validated Wills – stored securely in the National Will Archive.
Much like DIY Wills, doing a Will yourself and failing to take professional advice can leave your estate at risk – or can cost you a lot of additional money! I spoke with a couple who had made their Wills online with a company who had advertised their Will service for £19.99.
They filled in the online form and then were subjected to several calls from the Will company, advising them they needed “a number of trusts” includes in their Wills, plus additional services including adding the Will company as Executors in their Wills. The cost rose from £19.99 to several hundred pounds – with the Will company also potentially earning several thousand more after death for dealing with their estates.
It’s easy to be led into buying additional services if you are guided by “experts”. What seemed a bargain can cost you a lot of money!
I can guarantee you I will only offer you what you really need and would never add my company as an Executor (although I can recommend reputable companies if you do feel you need professional probate assistance).
Lasting Powers of Attorney and Care Homes …
Care homes will ask if you have LPAs in place when you first come to stay with them. That is because normally the “decision-maker” (the person who will make the best interests decision for someone who lacks capacity to make it for themselves) is the person who will carry out the action, whether it’s delivering the personal care, giving the flu jab, or carrying out surgery.
However, if you have chosen someone to have decision-making powers, then it’s your attorney (or attorneys) who have that power, make a best interests decision to consent to or refuse that care or treatment. So, it’s important to get LPAs in place so that you choose who make decisions for you.
But you can only give “authority” while you still have capacity to do so – and leaving this until you need to be in care can often be too late.
I view LPAs as an insurance policy – you may never need them but having them in place for when the time is needed can be important. And making them before losing capacity is critical –
Did you know that although these are advertised as “free”, they can actually cost the charity money?
I spoke with a client who had already her Will, through a solicitor, via a charity. She had made a donation to the charity – which was very much expected when she attended the appointment – and felt good about. However, she didn’t realise that the solicitor was getting paid by the charity for doing the Will, and she was also advised that as her needs were “more complex” she also paid the solicitor additional for a “non standard Will”, and included them as Executors – so they would earn additional fees at a later date.
Charities pay for the services of a solicitor (albeit at a reduced rate) and hope that you will make a donation in return for your “free Will”. If you don’t donate, they lose out. And because of the fees they pay, they don’t get your full donation as you may have thought.
We don’t participate in the “Free Wills” scheme, but we do donate 5% on all Wills invoices to our local Cancer Care organisation. And we don’t “upsell” either!
Funeral Plans – are all costs covered?
Funeral costs have almost doubled over the last 10 years and are forecast to continue increasing. The main reason is that burial and cremation charges are rising – in fact by an average of 3% in 2019 alone. You can read more about the costs in this report from Royal London.
Many people are purchasing a Funeral Plan which fixes the cost at today’s prices, regardless of future increases. However, not all plans cover everything that was expected. There is are new laws coming into place over the next 2 years to regulate the industry …
I visited a lady who had recently lost her father. He had a Funeral Plan in place to make sure his wishes were known and pre-pay for the cremation and services. He had purchased this over 10 years ago as he wanted to ensure that his family were not financially affected.
When the lady visited the funeral directors, she was told that the plan purchased only covered £500 towards the cost of the cremation – which would cost, at today’s prices, £1200. So, she was still left with a bill to pay – something her father was trying to avoid!
We work with the UK’s largest Funeral Plan provider – the Co-op – to help you plan and pay for your own funeral in advance. We do this because the Co-op is one of the very few companies that guarantees to cover the full cost, rather than a fixed contribution. They also have the widest network in the UK.
If you’d like to discuss how you fix the cost of your funeral now, contact me for a discussion. You can also find more information here.
Do it in 2020!
I hope some of these Lessons from 2019 and real-life examples are useful for you and help you to understand how important Wills and LPAs are in 2020.
Contact me to discuss your own personal situation – and arrange a visit in the comfort of your own home at a time convenient for you and your family.