While many people do not want to consider the implications of getting older or, even less, dying, these are unavoidable events and it is important to plan so that our nearest and dearest are not left with a mess to untangle.
In the UK, it has been estimated that three in five UK adults have not written a will. The main excuse we hear is that “the missus gets it anyway”. Even if this is true, writing a will makes the whole process much easier as there is then a written authority for someone to deal with your assets rather than having to go through the convoluted process of gaining approval to act as personal representatives for your estate.
POWER OF ATTORNEY
It is also sensible to make a power of attorney to authorise trusted individuals to act for you if you become incapable of conducting your own affairs. It is important to understand that the power of attorney needs to be made while you have mental capacity as leaving it too late means that, again, it will be necessary for the relevant individuals to apply to the Court of Protection to act as your representative.
There are two “Lasting Power of Attorney” (LPA) documents to consider. One is to empower individuals to act for you in connection with your financial affairs and the other is to make health decisions on your behalf. It is possible to complete the financial LPA on its own rather than complete both.
Please also be aware that the LPA does not mean you yourself cannot make your own decisions. The attorney can only act once you lose the capability of acting yourself.
You may wish to set down in writing the sorts of treatment you would want in certain circumstances. This would cover medical resuscitation, organ donation and other such matters.
If the value of all your assets is likely to exceed £325,000 (the “nil-rate band”), you should consider taking professional advice as to your Inheritance Tax position and anything that can be done to improve this. As with wills, many people leave this too late so it is best to seek advice as soon as possible.
JOINT BANK ACCOUNT
You may consider having a bank account in joint names such that, in the event of your death, the other named account holder can still operate the account to settle bills and have sufficient cash to live off while the administration processes are sorted out.
It may be sensible to consider rationalising your investments if these are complex. While you may understand everything at present, this may not always be the case, and will, for example, your spouse be able to understand your particular arrangements?
Protect yourself from scammers who are becoming evermore sophisticated. One precaution to consider is removing all surplus cash from your main operating bank account thus reducing the amount available to bankcard fraud etc. Also think about protection from telephone scams – most providers have facilities to block unknown calls.
Before you reach your planned retirement date, find out what you could be expecting to receive. Your personal tax account with HM Revenue & Customs is available via an on-line Government Gateway account and you can easily obtain a state pension forecast from here. You should receive regular updates on the status of your other pension entitlements and you should check with an independent Financial Adviser (IFA) for any information you need.
Consider attendance allowance, personal independence payments, carer’s allowance, etc.
What do you want to happen to things like your Facebook profile and history? What about passwords for bank accounts etc. that you operate only online (for example Bitcoin only has an on-line existence). You need to ensure your loved ones are able to deal with these matters if you are unable to do so yourself.
A common piece of advice is to treat all your children the same. While this may not always be possible, you do not want there to be bad feeling between your children after you have gone. You should also ensure, as far as possible, that each is able to access the wealth you are leaving them independently of each other – for example, avoid leaving a portfolio of properties as something to be owned jointly by your children: better to break up the portfolio and give them each their own properties.
You should confide in your loved ones as to where vital information and documents are kept – for example, your will. This should also include details of passwords etc – for online accounts and investments. A “where to find” list would be helpful.
KEEP OR LOSE?
Consider old documents, letters and social media profiles.
Think about how these are going to be funded. Bear in mind that you may need to contribute to your own care costs if your assets exceed a certain value (currently around £20,000).
Think about how this should be funded and consider preparing a service or memorial plan.
Consider donation of organs etc. after your death and discuss with family members.