Planning for later life is an important part of protecting yourself and the people you care about. At Regenerage, we’re passionate about helping people access the information and support they need to make informed decisions. In this blog, we’ll look at wills and estate planning, why they matter and how we can help.
What is a will?
A will is a legal document used to ensure a person’s belongings and assets are distributed according to their wishes once they pass away. Often, wills contain information about houses, cars, and money that the person may have left behind.
Wills are very important, as the outcome can be less favourable if you pass without one. Not only do you risk your assets not being distributed as you wish, but it can also cause increased stress for your family, friends and loved ones.
If you die without a valid will, your estate is distributed according to the rules of intestacy. This means the law dictates who manages your estate and exactly who inherits it, meaning that you have no say over your own assets.
What happens if you don’t have a will?
- Unmarried partners: Unmarried partners do not automatically inherit under the rules of intestacy, regardless of how long they have been together. This can leave a surviving partner in a difficult financial position if no will is in place.
- Statutory Legacy for spouses: If you pass away married or in a civil partnership without a will, your spouse or civil partner will inherit your personal possessions and a statutory legacy amount set by law. Any remaining estate may be shared between your spouse and children according to the rules of intestacy.
- A spouse but no children: In this scenario, where there is no will, the spouse inherits all of the estate.
- No living relatives: If there are no living relatives following your passing, the entire estate goes to the crown, known as bona vacantia.
The process of passing without a will
When someone dies with a valid will, the named executor is responsible for administering the estate and ensuring assets are distributed in accordance with the person’s wishes. When there is no will, it introduces a more complex process for your loved ones.
As there is no named executor of the will, a relative or other person must apply for a Grant of Letters of Administration to manage the process. This can take a long time and can increase stress for your loved ones who are already dealing with loss.
What is estate planning?
Estate planning is the process of arranging how your assets, finances and personal affairs will be managed if you lose mental capacity and how your estate will be distributed after your death. The process helps to protect your loved ones, minimise taxes and ensure your wishes can be followed. Read more about the early signs of memory concerns.
Estate planning process
Are you looking to start estate planning? There are several steps you can take. We’ll outline the most important steps.
- Writing a will: This sets out how your assets and possessions should be distributed after your death.
- Appoint guardians: If you have children under 18, appointing guardians in your will allows you to state who you would like to care for them if you die before they reach adulthood. These should be trusted individuals, and it’s your choice who you pick, but you should also make them aware.
- Set up a Lasting Power of Attorney (LPA): An LPA is a legal document that allows you to appoint one or more trusted people to make decisions on your behalf if you lose mental capacity. There are separate LPAs for property and financial affairs, and for health and welfare decisions. Again, you must choose someone you trust.
- Mitigate inheritance tax exposure: Inheritance tax can affect the value of the estate passed on to your loved ones. Understanding available allowances, exemptions, and gifting rules may help reduce tax liability where appropriate.
- Create trusts: Trusts can protect wealth for young or vulnerable beneficiaries, including family members.
- Outline your wishes: Estate planning is your way to ensure they are honoured. You can outline how your assets should be distributed and make any funeral plans you want.
Benefits of comprehensive estate planning
Estate planning offers many crucial benefits, from ensuring you have greater control to enabling tax efficiency. It also makes the processes much smoother and faster for your relatives when you pass away.
Estate planning is important regardless of your financial and relationship status, and it can provide more protection for those who live with their partner but are not married. Without these plans in place, your loved one may have no automatic inheritance rights, which could leave them in a difficult situation while grieving your loss. Read more about financial planning.
Why does this planning matter?
These steps matter because they prevent your assets from being distributed in line with government rulings, rather than your own preferences.
- Protects your partner’s financial position (if unmarried): Unmarried partners do not automatically inherit under the rules of intestacy. Without a will, a surviving partner could face financial difficulties or uncertainty at an already difficult time.
- Safeguard your children: If you have children under 18, appointing guardians in your will allows you to express who you would like to care for them if you die before they reach adulthood. Without clear arrangements, decisions may need to be made by the courts. Additionally, you can decide when they should receive their inheritance and also provide some protection for any stepchildren, who would otherwise receive nothing.
- Reduce taxes and save money: Careful inheritance tax planning may help reduce the amount of inheritance tax payable on your estate. Many estates benefit from tax-free allowances and exemptions, but professional advice can help ensure these are used effectively. It can also help to lower legal fees for your family after you pass.
- Reduces conflicts: A valid will clearly states your wishes, removing guesswork and assumptions and therefore reducing family conflicts.
- Managing your assets and health: Some people are no longer well enough to make decisions about their health and financial affairs, and planning allows you to designate a trusted individual to help you with these matters.
Do I need to create a will, and how do I do it?
Wills should be created with professional guidance from an estate planning solicitor. It’s natural to go through life thinking you don’t need to create your own will, but it’s extremely important. Proper estate planning protects you through major life events and tough financial circumstances. It means your personal belongings and business assets can be organised according to your wishes. Some people also choose to provide charitable donations within their wills.
Most adults can benefit from having a will, regardless of the size of their estate. A will generally remains valid until it is replaced or revoked. However, major life events such as marriage, divorce, the birth of children, significant changes in assets or changes to tax rules should prompt a review to ensure your wishes remain up to date.
How can we help with wills and legacy estate planning?
At Regenerage, our goal is to help older people live and age well in our community. We provide excellent services for older people, including our activity centres and at-home services.
We understand the pressure that can come with creating a will or estate plan, and we’d love to help. While Regenerage does not provide legal advice, we can help you access trusted local professionals and organisations who specialise in will writing, estate planning and related legal matters. Contact us today.
Please note: This article provides general information only and should not be considered legal or financial advice. Individual circumstances vary, so professional advice should always be sought before making decisions about wills or estate planning.
