Estate Planning FAQS

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Q What is an Estate Plan?

An estate plan sets out how you want to distribute everything you own to you beneficiaries (those that will inherit from you after you die).

Q What is my estate?

Your estate is the total of everything you own, from your house through to your smaller, personal possessions. In more formal terms, it’s your net worth.

Q What do I need in my estate plan?

Exactly what you’ll need in your estate plan will depend on your assets and your family situation. Options exist for people of all income levels, no matter how you would like your assets distributed following your death. Here are some of the elements of an estate plan;

  • Will – a legal document expressing your wishes as to how you want your estate to be distributed.
  • Executor – when you draw up your will, you will need to choose someone who will carry out your wishes. Careful consideration needs to be given as to who to appoint.
  • Trusts – Trusts are an effective way of avoiding the expense and delay of the probate process. They allow you to put conditions on how and when your money is distributed.
  • Trustees – you must choose people to be your trustees, usually family or close friends that you can rely on to manage your trust after your death. It is also important to consider appointing a professional trustee to ensure a totally unbiased approach is taken and that your wishes are upheld.
  • Medical Power of Attorney – a legal document that lets you appoint one or more people (known as attorney’s) to make decisions on your behalf if something were to happen to you resulting in the lack of mental capacity to make the decisions yourself (i.e. an accident or illness). These decisions include things such as your medical care, moving into a care home, life-sustaining treatment etc.
  • Financial Power of Attorney – a legal document that lets you appoint one or more people to make property and financial decisions on your behalf, with your permission. These decisions include things such as managing a bank account, paying bills, selling your home, collecting benefits or a pension.
Q Why do I need a Will?

You can put off making a Will until it’s too late and this poses all sorts of problems for the people left behind. Not making a Will could mean that some, if not all your inheritance either goes to the wrong person, or to the state. Without a Will you cannot be sure that those you wish to benefit will actually do so e.g. Your spouse/ civil partner will not automatically inherit all your estate and ‘common law’ partners may not receive anything at all.

Q Why do I need trusts in place?

Trusts are an effective way to avoid common scenarios that could result in your beneficiaries missing out on a large portion of their inheritance. Such scenarios include;

  • Divorce – If your children/ chosen beneficiaries are subject to divorce proceedings, then half of what you intended them to receive is at risk to divorce settlements.
  • Creditors or Bankruptcy – If your beneficiaries are subject to Creditor Claims/Bankruptcy then the inherited estate is fully at risk.
  • Marriage after Death – If your spouse remarries following your death then the inherited estate could be lost to the new spouse, disinheriting your children.  
  • Care Costs – Following first death, should the surviving spouse need Care, then the whole estate, including the family home, would be assessed to pay for the cost of that Care.

Setting up trusts could protect intended inheritance from all the above, and more.

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