Death is not a subject that we like to consider or discuss, however, planning ahead is more important than ever to ensure your affairs are in order before your passing. Regardless of your age, wealth, health or status, planning for your future can guarantee your wishes are followed and ensure your loved ones get the full benefit of your legacy. Taking the necessary steps and precautions during your lifetime can also eliminate any unnecessary stress that your loved ones may face when administering your estate when the times comes.
This blog post offers some guidance on the importance of estate planning and ensuring your affairs in order.
Keeping an up to date Will
Our research paper, ‘A changing landscape’, which looks at the Will writing industry in the UK, revealed that 61% of UK adults still do not have a Will. We predict that this figure has decreased slightly due to the uptake in Wills reported during the start of the COVID-19 pandemic. However, that’s still a remarkable amount of people that do not have a Will, which is particularly concerning when you consider that our ageing and wealthy population is arguably more focused on later life planning than ever before.
First and foremost, it’s important to remember the value of having a Will and updating it regularly. If you pass away without a Will, your estate will be distributed following the intestacy rules which may not reflect your wishes and cause inheritance disputes between your loved ones at an already difficult time. Your Will should clearly outline your wishes and be kept up to date as life events, such as marriage, divorce or a new addition to the family, may trigger a need to update your Will.
A well-written and well-thought-out Will
When drafting your Will, there are a few important factors that you should keep in mind, so the right arrangements are put in place. These include:
- Selecting your Executors carefully. Many people are unaware that the role of an Executor comes with a great deal of responsibility, so it’s important to ensure your chosen Executor(s) are aware of what the role entails and would be happy to accept the position or find a professional to administer the estate. It’s recommended to name more than one Executor in case your chosen Executor cannot or does not wish to act at the time of your passing. You can name up to four Executors in a Will.
- Considering appointing a professional Executor. Many people choose to write a professional Executor into their Will so their loved ones can pass the administration to an experienced professional. This can save the family a great deal of time and unnecessary stress that can be caused by the probate and estate administration process. Kings Court Trust are happy to be named as a professional Executor and can advise on clauses to be included in the Will.
- Naming beneficiaries individually by using their full names, rather than their relationship to you e.g. naming your grandchildren individually and rather stating “all of my grandchildren”. This can sometimes cause confusion, especially when families lose touch.
- Sharing your family makeup and history with your Will Writer as they may be able to pre-empt situations where a person may object due to lack of provisions in the Will. A good Will Writer will ask questions about the family and why you have chosen to distribute your estate in a certain way, outline your wishes clearly and try to avoid any inheritance disputes.
Discussing your Will in advance
It is not always enough to just have a Will as it could be contested under the Inheritance (Provision for Family and Dependants) Act 1975. However, some precautions can be taken to reduce the risk of disputes. Discussing the contents of the Will and explaining how the estate will be distributed to loved ones can take away the element of surprise and help relatives to understand the wishes in the Will. There are no legal obligations to discuss the contents of your Will and you can keep it private if you wish. Although, this open and transparent approach is recommended when someone has been left out of the Will or you are not evenly distributing your assets. For example, if one child is expected to receive more inheritance than another child.
It is also important to ensure your Executors know where to locate your Will. If your loved ones struggle to locate your Will, your estate may be mistakenly identified as an intestate estate. As well as being one less thing for your Executors to worry about it, it can also help to speed up the beginning of the estate administration process.
Financial advice and effective Inheritance Tax planning
We also recommend seeking financial advice to ensure you maximise the inheritance your beneficiaries will receive. Financial Advisers and Estate Planners can offer advice on effective Inheritance Tax planning to ensure your estate pays as little Inheritance Tax as possible. They may also advise how you can utilise and invest your money during your lifetime, whilst leaving a suitable inheritance for your beneficiaries.
Inheritance Tax is payable at 40% once the value of your estate exceeds the government-set threshold. There are some allowances that estates can utilise before they need to pay Inheritance Tax. The current threshold is £325,000, so if your estate is below this value, no Inheritance Tax will be payable. Additionally, if you pass your home to your children, your threshold may increase to £500,000. If your estate is worth less than your threshold and you are married or in a civil partnership, any unused threshold can be added to your spouse or civil partner’s threshold when you die. This could result in your spouse or civil partner’s tax-free threshold being as much as £1 million.
By seeking professional help, they will be able to advise how you can utilise the allowances to ensure you don’t unnecessarily pay too much Inheritance Tax.
Digital estate planning services
In today’s modern digital age, there are even digital services available that can be set up during a person’s life that will make things easier for Executors and loved ones after your passing. These include tools to put all the important information your Executor(s) will need in one place and even leave messages for relatives or friends beyond the grave.
Firstly, some services allow you to store the information your Executors may need upon your death. It’s important to ensure your Executors have all the information they need to administer your estate and any relevant information about your assets and accounts, especially for digital assets such as cryptocurrency that can hard to retrieve. An example of this type of service is Life Ledger’s ‘Register a life’ service which will securely store your data. You can register yourself or someone else, add a partner to transfer household accounts or insurance to, log a copy of the Will, add details of Executors, and add your accounts by sharing account/policy numbers and email addresses.
Additionally, services allowing you to leave messages beyond the grave are now available. For example, Death.io’s Iternal service aims to bring your unique story to life to help you be remembered and share memories with your chosen loved ones. You can upload photos, voice notes and videos, sharing your memories with loved ones through a secure, encrypted platform. Is this the future of leaving a legacy?
Kings Court Trust is an award-winning probate and estate administration provider who provide support to families at the difficult time of losing a loved one. We offer a range of services that can take care of parts or the full estate administration process, relieving loved ones of the administrative burden. If you’re looking for practical, impartial and informative advice about the next steps following a bereavement, please do not hesitate to call our expert team on 0300 303 9000 or email ClientServicesTeam@kctrust.co.uk.