The effects of the Covid-19 outbreak have been felt in every aspect of life. It has prompted everyone to reassess priorities and look at how life has changed. One area that has come sharply into focus is planning for the future, both in terms of financial security but also protecting families. Here is a checklist of what to think about:
Having a valid Will in place is the only way you can ensure that your wishes are carried out when you pass away. Without having a will in place the law decides who inherits, not you, these are known as the intestacy laws. There are a lot of misconceptions about how the intestacy laws work but it is important to note that your spouse does not necessarily receive everything if you were to die without a Will. Also, if you live together as a couple but are unmarried, your partner would receive nothing. Making or updating your Will can correct that. It is a simple, quick and relatively inexpensive process to make a Will.
Many people do not consider what would happen to them should they lose mental capacity during their lifetimes. Making a Lasting Power of Attorney allows you to choose who would make decisions for you in these circumstances. Those decisions can range from making financial decisions in relation to your property or money through to health and care decisions, including end of life matters. It is vitally important to put these documents in place to ensure you are protected. If you do not have these documents in place and lose mental capacity then your family may have to make an application to the Court of Protection for a ‘Deputy’ to be appointed to make those decisions for you. You are not in control of who that Deputy should be and the administration work and cost are significantly higher than putting in place a Lasting Power of Attorney now.
As many of us are living longer, we all need to consider how we will be cared for when perhaps we need assistance to do that. Planning for care is important and you should seek advice from a financial adviser as to how to ensure that funds are in place. Similarly you should speak to a legal adviser about how to ensure your estate is protected.
It is widely thought that the money spent by the government as a result of the pandemic will be recouped in taxes over the coming months and years. Taxes like Inheritance tax, Capital Gains Tax and income tax could be affected. Reliefs from paying these taxes may be withdrawn. It is important to speak to a legal or tax adviser to ascertain how these taxes affect you now and how you may be able to take some steps now to ensure that you maximise reliefs whilst they remain available.
Speak to your pension provider and/or financial adviser to ensure you have adequate provision in place. Pensions are always managed separately from Wills, so you will need to tell your pension provider who will receive your pension pot when you pass away.
If you are in employment and are entitled to a Death in Service benefit, then you also need to tell your employer about who you would want to receive it if you were to die whilst still in employment. Again, this cannot be dealt with in your Will. Also let the person drafting your Will know about your pension and death in service arrangements and to whom they are nominated as it may be relevant to the structure of the Will.
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