Like many others at this time of year, you may have decided to set yourself a new fitness goal, learn a new skill or quit a bad habit. However, have you considered the importance of Estate Planning and getting your legal affairs in order?
Whilst you may have heard about some of the elements that make up a robust estate plan, for many, it can often be a daunting prospect to know where to start. We go through some of the steps you should take when estate planning and why it could be one of the most important accomplishments you achieve this year.
Am I too young to make an estate plan?
Having certain legal documents in place is vital at any stage of your life. In fact, as an adult, you are never too young to start protecting your estate, and there are specific points in your life where it can be imperative. Milestones such as buying a property, getting married or having children often trigger people to think about protecting their estate. Subsequently, if you have a change in financial or personal circumstances, these are all important life events that should encourage you to start estate planning or make amendments to existing documents. If you have recently gone through one of these new life milestones or have no legal documents in place, it is even more important to start thinking about this now.
What are the benefits of estate planning?
If you want to ensure your wishes are followed, and your loved ones are taken care of after your death, you must establish a robust estate plan that includes various legal documents. Furthermore, by planning now, you will be protecting your loved ones from additional stress or heartache when dealing with your estate. If you die without certain documents in place, your loved ones could be left with complex, lengthy and costly legal procedures. Additionally, your estate will be distributed according to the rules of intestacy, meaning only a spouse or certain relatives can inherit. The only way to ensure you control how your estate is distributed is by having the correct legal documents in place. Additionally, you can potentially minimise the tax charged on your estate with the right advice.
Some of the most beneficial elements of estate planning include:
- Make sure you have control over what happens to your assets
- Make sure you have control over who administers and manages your estate
- You can alleviate inheritance tax obligations
- You can help avoid future inheritance disputes
How do I make an estate plan?
Firstly, you should start by identifying and listing your assets and any debts, including a mortgage, for example. Divide these into tangible and intangible assets. Tangible assets may include property, cars, jewellery, art, or other collectables. Your intangible assets would be assets such as money in bank accounts, pensions, shares, or insurance policies. Other items such as digital assets are becoming more popular, including social media accounts, music and photograph libraries, or email accounts.
Even though some of these do not have any financial value, they could have considerable sentimental value to loved ones.
When your assets list has been completed, you should then think about how you wish your assets to be distributed when you die, how you want your estate to be managed, and by who.
If you have young children, whilst challenging to think about, it is essential to consider who you would want to take care of them if you were to die while they are still minors.
Each estate and one’s circumstances are unique, so you must tailor your estate plan to your situation to protect you and your loved ones. To ensure you have considered all the various options open to you, taking expert advice from a regulated professional will ensure all factors are considered, and you are aware of all the different legal documents that can be included.
What legal documents are included in an Estate Plan?
Your estate plan can include various detailed wishes and legal documents. Typically, what to include will depend on what collective assets make up your estate and your estate planning goals. Some of the most crucial elements of your plan can include:
- Creating or updating a Will
- Setting up a Lasting Power of Attorney
- Setting up a Trust
Can I create these legal documents without a Solicitor?
Various legal documents, such as Wills or Lasting Powers of Attorney, can be set up using online DIY services without legal assistance. However, this approach can be risky, more complex, and costly to fix in the long run. Mistakes are easily made, which can invalidate the document, resulting in undue distress for loved ones or end up causing a dispute.
If a Will is not legally valid, the rule of intestacy will decide how the estate will be shared out and will not necessarily follow the wishes expressed in your Will. You may be concerned about the cost of seeking legal advice to assist with your documents but doing so will help establish if an estate is simple or complex and the most appropriate solutions for you. You should also ensure you receive the proper advice regarding Inheritance Tax rules (IHT). It is vital to establish if they apply to your estate and the options open to you to mitigate any tax implications.
Whilst you might assume your estate and how you wish this to be distributed is relatively straightforward, having the guidance of a regulated professional help you through the process of setting up your documents can give you and your loved one’s peace of mind that everything is in order and has been done correctly.
Speak to Jarmans regarding Estate Planning
From the most basic requirements where you leave your belongings to your spouse or partner to more complex arrangements involving trusts, provision of business assets, and foreign elements, we can help.
Our experienced Wills and Estate planning team work closely with you to provide practical and supportive guidance for your end of life plans, including Wills and Trusts.