Some people don’t need to worry about making a will, such as young adults with no children or assets, just yet; however, a large proportion of people in the UK not only need to make a will but also need to consider estate planning lawyer if they have a number of valuable assets.
Whether your estate is reasonably straightforward or more complex, such as an extensive property portfolio of assets in foreign countries, using an estate planning lawyer enables you to incorporate several aspects pertaining to your estate under one roof.
What is estate planning?
There are several aspects to estate planning, including making a will, which incorporates every aspect of planning who gets what, where, and when upon your death, as well as who makes decisions on your behalf, if required during your lifetime. Let’s look at the different aspects of estate planning:
- Making a will – a will is a legal document that lists all your assets and their relative value, states your beneficiaries and what you have decided they will receive upon your death.
- Powers of Attorney (POA) – a POA gives permission to a person of your choice to make certain decisions on your behalf should you be in the position of losing your mental capacity to make the decisions yourself or will be out of the country for a long period of time, or you are seriously ill for any reason. However, there are three forms of POA:
- A continuing power of attorney gives permission regarding your property assets and financial matters.
- A welfare power of attorney is only used when you do not have the mental capacity to make decisions on your medical care or about the treatment you receive, and even about where you live.
- A combined power of attorney brings together the above two POAs so the person of your choice can make decisions about your financial matters as well as about welfare and health.
- Planning business succession – if you run a business, an estate planning lawyer will help you plan the running of the business when you want to retire or upon your death, including:
- Who takes over the business’s operations?
- Where do the business’s profits go, i.e. equally to beneficiaries or reinvested back into the business?
- Does your death impact a partnership agreement?
- If you’ve appointed an executor, are they experienced in selling a business?
- Trusts – a trust is a method to manage your finances and assets for your beneficiaries, and they can help reduce the impact of inheritance tax and capital gains tax.
What’s included in your will?
There are four forms of wills – simple, joint, living, and testamentary trust – which one you choose largely depends on your circumstances and your estate. Whilst there are also handwritten wills and oral wills, known as ‘nuncupative’ wills, let’s look at the four main types.
- Simple will – the most common, a simple will is the choice of many people. It details your assets, who will receive them, names guardians for your children under the age of sixteen. A simple will often forms the basis of other wills.
- Joint will – also known as mirror wills, they are signed by more than one person but culminate in separate wills for each testator. They are usually made by spouses where the executor, beneficiaries and other matters are the same. The drawback of joint wills is that should the surviving spouse’s wishes change, they can’t change the joint will.
- Living will – this type of will isn’t to do with distributing your estate on your death but is to do with your wishes should you become incapacitated. Similar to POAs, you can specify who will make decisions on your behalf and what your wishes are should something happen to you.
- Testamentary trust – this type of will puts certain assets into a trust, such as property, for your beneficiaries to benefit at a later date, i.e. minor children. You will need to name the trust’s trustees – the people who will manage the trust – in the testamentary trust will.
Before you carry out any estate planning or make a will, you will need to take an inventory of your assets. An estate planning lawyer will be able to help you with this task and review your assets to work out the most tax-efficient way in which to pass on your assets to your beneficiaries.
Your will needs to include:
- Physical property, such as buildings and land.
- Intangible property, such as stocks and shares, bonds, patents and copyrights, intellectual property and businesses owned, or any interest in a business that you have – you will need to specify who will take over your part of the business.
- Unproductive property of value, such as jewellery, artwork, cars and furniture.
- Cash, including money in your bank accounts and savings accounts. Don’t forget that your spouse and family will require cash to pay any outstanding debts as well as taxes upon your death.
However, there are some things that shouldn’t be included in your will, such as:
- Property that is held as a joint tenancy, i.e. a property that is jointly owned with someone else. The reason is that the property will transfer for the other joint owner automatically.
- Any insurance policies, trusts or other retirement plans that already state a beneficiary. However, it is possible to change your beneficiary, or beneficiaries, on any of these, as well as pensions and life assurance policies.
- Any stocks, shares or bonds that are already set up to transfer to someone else upon your death.
- Digital assets are also not included in wills, at the moment, so cryptocurrencies may be a difficult asset to place in a will. However, an estate planning lawyer will be able to advise you accordingly.
The more concise and accurate your estate planning and will be, the smoother the transition for your family and beneficiaries.
At Probates Online, we offer a professional probate service online that is efficient and affordable. If you are an Executor of a will or close relative of a deceased person, and you need to apply for a Grant of Probate or would like to take advantage of our entire Estate Administration service, visit our website for more information or contact us today.