Where there’s a will, there’s a way
While it’s a subject that some people shy away from or ignore altogether, the question of what happens to your estate when you’re gone is a bedrock of your financial planning.
Assets and investments are potentially subject to inheritance tax and sometimes lengthy delays in probate, while any children you have could be subject to much worse. That’s why these two documents are at the heart of healthy financial foundations. Wills administer your estate on death; lasting power of attorneys administer your estate on disability.
When should you make a will?
A will, I believe, is essential for everyone. If you don’t have one, you’re leaving an admin burden on those you leave behind. Even if you’re single, a will tells your parents or other family and friends what you want to happen to your money when you’re gone. Even if you have a very modest estate, a will is you deciding how it will be transferred – not someone else.
As soon as you have a spouse or children, or even a business, a will is of paramount importance. If you have children and don’t have a will, then if both parents pass away social services will take your children into care. It’s only once the Court of Protection determines the most suitable guardian, whether it’s the mother-in-law or your auntie, that the children will be released from social care. As you can imagine, that can take time – time that your children will be away from their family in a period of grief.
A will allows you to keep their routine as normal as possible in the event of a catastrophe. I’d go so far as saying that a nominated guardian in such circumstances should ideally be local to the school where your kids go, their local environment, to maintain as much routine as possible.
Power of attorney
Just as important as having a will is having a power of attorney. If you’re incapacitated for any reason and don’t have one, then again, the Court of Protection steps in. Why would you want a judge deciding on how you should be treated, rather than your wife, family or someone you trust?
Suppose you need expensive treatment that would require selling the house, or there’s a choice to bring you home and have care as opposed to going into a care facility? It’s your spouse that should be making those decisions, not a stranger.
Once these things are in place, they’re done. It’s simply good housekeeping and will provide much-needed support for your loved ones knowing your wishes in advance and being able to enact them.
And once you have a will and power of attorney in place, you should discuss them with your family. Just once is enough, so that everyone understands your wishes and knows your plans. That should ensure there’s no animosity.
After that, file them away, safe in the knowledge that you’ve taken care of all possible circumstances.