Virtually all of us will have home insurance, not just for the building itself, but for the contents too. Indeed, many of us will have car insurance, annual holiday insurance and even boiler insurance. Why do we do this?
Because we want to minimise the risk to our estate and family from those troublesome events that might just happen. There could be a storm, a fall off the ski lift or maybe even a burglary. We all spend several hundreds of pounds each year guarding against things that might happen. Thankfully, there's no guarantee that anything will happen, but it might.
The question is do we take as much care to protect our estate against an occurrence that will definitely happen?
There's not much in life that we can be sure of, but there is no question that we will all die. We might not want to dwell on this stark reality too much, but it makes perfect sense to ensure that our wishes are fulfilled on death and that our estate will pass in the way that we would want.
Making a will
Taking the time to put a Will in place is the only way to be sure that your estate will devolve to your preferred beneficiaries. This, unlike arranging house insurance, needn't be an annual exercise. It shouldn't take any more than a couple of hours of your time, and will likely cost less than the annual house insurance premium. It is, of course, prudent to review your Will from time to time, perhaps following the birth of a child or a divorce in the family. However, most people will do this every few years rather than on an annual basis.
Leaving a Will makes life easier for the loved ones that you leave behind. Appointing appropriate Executors gives peace of mind that the administration of your estate will be in safe and trusted hands.
Leaving specific provision in your Will means that you can be sure that your spouse or partner is adequately provided for, that your children are looked after as you would wish, and that other family, friends and even charities receive the bequests that you would want.
Completing a Will can provide a perfect opportunity to review your estate and allow the opportunity to put in place some efficient tax and estate planning measures. A Will can also be useful to ensure that vulnerable or disabled children are well cared for and that second marriage situations are handled delicately and fairly.
Failing to leave a Will is risky and can be considerably more expensive. It can mean the need for additional court procedures which can be both time consuming and costly. The law will determine who is to be your Executor, giving you no control over the selection of the appropriate person to fulfil this important role. It will most likely mean the law determining that your assets are to be shared amongst many members of your (sometimes very distant) family.
If the law determines that children are to benefit in an estate in circumstances like this, it can mean large sums falling in to their hands whilst they are still relatively young. There's no doubt – dying without a Will leaves a lot to chance.
Powers of Attorney
When contemplating the preparation of a Will, it makes sense to also turn our attentions to Powers of Attorney. Powers of Attorney can be regarded as a sort of insurance policy, and instead of guarding against the risk of storm or accident or theft, we can protect ourselves, our loved ones and our assets against the risk of losing the ability to look after our own affairs.
We all know of a family that has suffered at the hands of a life-changing illness such as dementia, or Parkinson's disease, or that has suffered as a result of an event, like a road accident. Conditions and events like this can compromise an individual's ability to manage their own affairs. There's no automatic right conferred upon a spouse or a partner, or a child to step in and look after the individual's affairs. In actual fact, things can grind to a very inconvenient and expensive halt.
Granting Power of Attorney over your financial affairs and welfare matters allows those you trust most to look after things when you need help. It can serve to give you and those closest to you peace of mind, and can assist in dealing with practical matters at what can be a fraught and emotional time for families.
Just like preparing a Will, putting a Power of Attorney in place is a simple and cost effective procedure, and should be considered by all of us, regardless of age.
Let's go back to where we started, with home insurance. We don't want to take risks with our roof tiles or our televisions, so why takes risks with our entire estate and with decisions regarding our care?
If you would like to speak to Pamela Niven, or another member of our team on any of the issues raised, please email [email protected] or call 0141 227 9662.
*This article first appeared in Tilney Bestinvest's The Bigger Picture magazine in March 2015