4 minute read
Money Matters
Next Article
Wills, Legacies
AND TRUSTS
How to disperse one’s assets after death is a subject many people shy away from, but as Lisa de Silva explains, getting things sorted out in good time is both good sense and far easier than might be thought
It is estimated that over half the UK population do not have a written will. This means that around 31 million people cannot be certain who will inherit their property, financial and other assets when they die.
While writing a will can be a sensitive subject, sorting out your affairs and making a will, can help to relieve the emotional and financial pressure for future heirs. Here we look at will writing to help readers understand what is involved.
WHY MAKE A WILL? Many people make the mistake of assuming all their assets will pass to their spouse or civil partner, but if you die intestate (without a will), your estate is shared out according to the law of intestacy. This means the law decides who gets what, starting with immediate family members and moving further down the ancestry line.
Do be aware that: • If not married or in a civil partnership, the surviving partner will not inherit anything, even if you have lived together for decades. Although if you own a home as joint tenants, they will inherit that. • Without a will, the courts will decide who looks after any children under 18 years of age, unless you have specified this in a will. • Complicated domestic situations involving stepchildren and multiple marriages need careful consideration in terms of who gets what. • Making a will can help to reduce the amount of inheritance tax paid on your estate.
It is estimated that over half the UK population do not have a written will
HOW TO MAKE A WILL If your estate is complicated, take professional advice from a reputable solicitor, particularly if you have overseas assets which could be subject to different inheritance law. However, it is possible to create a legally binding document by writing out your wishes and having them witnessed, signed, and dated by two independent adults. These witnesses cannot inherit from the will or benefit from your estate in any way.
The will should also name your executors, those who will gather up
legacies are based on the ‘residue’ of the estate once all taxes and debts have been paid. If residual legacies include more than one person, you will need to specify the percentage that everyone gets.
your assets for distribution to family, friends, and charities.
LEAVING PROPERTY IN A WILL If you own your home jointly with a spouse, or with someone as joint tenants, they will automatically inherit the property. If you own it as a tenancy in common, you can leave your share of the property to someone else, who will then become a tenant in common with the other property owner.
You can also give someone a ‘right of residence’, allowing them to live in the house for a specified amount of time e.g., until they die, go into care or are no longer raising your children, before ownership passes to your named heir.
If there is an outstanding mortgage, your heirs will need to repay the loan or re-mortgage the property.
Trusts give you better control over how your assets are used and managed
LEGACIES Legacies are gifts. They include leaving a person or charity a specific amount of money, object, or keepsake. Residual TRUSTS Trusts give you better control over how your assets are used and managed. By placing your assets in a trust and appointing trustees, along with an ultimate beneficiary, you can protect against excessive spending. This allows for proper management of assets on behalf of a minor (child under 18 years), a person who has become incapacitated mentally or physically or an unreliable spendthrift.
You can specify how much and when your assets are disbursed by the trustees. There are many different types of trust, and it is wise to consult with a professional if you decide to set up a trust. l
Expert advice on paying for care
Long-term care in your own home or in a residential care home is expensive, but with expert advice from independent financial specialists, Carewise can help you to make informed decisions on choosing and paying for the right care. The Carewise care fees specialists are regulated by the Financial Conduct Authority and members of the Society of Later Life Advisers, so you can have peace of mind when discussing your finances. Carewise could also help to protect your finances for the future. Contact Carewise to find out how you could benefit.
