Today is National Winnie the Pooh Day, a day to commemorate author A.A. Milne’s birthday. Whilst you may not be a honey-loving bear in Hundred Acre Wood, uttering the phrase “Think, Think, Think” when faced with a puzzling problem, it is perhaps a sentiment often echoed when considering your own personal legal matters.
“You can’t stay in your corner of the Forest waiting for others to come to you. You have to go to them sometimes.”
For many, January is a month made up of detoxes and unachievable New Year’s Resolutions. However, our Private Client team are on hand to tick off the dreaded task of sorting out your personal legal matters – having fallen to bottom of the “to-do-list” again during 2020.
There is a common misconception that estate planning should only be considered by the elderly or wealthy. However, we would encourage everyone – regardless of age or the value or complexity of your estate to seek legal advice.
“A little consideration, a little thought for others, makes all the difference”
As a starting point it is important to make a Will to protect your loved ones and your assets. A Will ensures that your estate goes to the person, or people, you want to receive it and can be invaluable in avoiding potential family fall outs.
If you die without making a Will (intestate), your estate will be divided according to an inflexible set of rules that may cause your family additional pain at what is already a difficult time. The rules of Intestacy have no knowledge of the individual’s wishes or circumstances and can therefore cause unnecessary uncertainty, distress and expense for those who are left behind.
“It isn’t much good having anything exciting, if you can’t share it with somebody.”
The key to successful estate planning is not only to start early but to re-visit the plan at regular intervals so as to ensure your wishes are continually met. It is important to regularly review your Will as your family circumstances change and to make the most of the tax allowances available.
Inheritance Tax (“IHT”) is a ‘wealth’ tax and has been around since 1986. When someone dies leaving an estate exceeding the Nil Rate Band (“NRB”) then IHT will be charged on the surplus above the NRB at the rate of 40%. However, with careful lifetime planning it is possible to mitigate the tax which may become due on your estate.
There are various gifts which can be made during lifetime including, but not limited to:
- Gift of £3,000 each year free of IHT;
- Small gifts of up to £250 per person each year;
- Donations to charity; and
- Regular gifts of surplus income.
Other IHT reliefs are also available, including Agricultural Property Relief and Business Property Relief.
“They’re funny things, Accidents. You never have them till you’re having them.”
Nobody likes to think that they may not be able to look after their own affairs, but accidents and illness can happen to anyone. People often incorrectly believe that should they become incapacitated their spouse or close family members would be able to act on their behalf. However, that is not the case and we encourage all clients to set up a Power of Attorney.
A Power of Attorney (“POA”) is a legal document that allows an individual to appoint one or more person that they unequivocally trust, to be responsible for dealing with their affairs in the event that they become unable to do so. The importance of advance planning ensures that people preserve as much legal autonomy as possible.
“It is more fun to talk with someone who doesn’t use long, difficult words but rather short, easy words like, ‘What about lunch?'”
For help or advice about any matter raised in this article please contact Harper Macleod’s Private Client department. Our approachable solicitors have vast experience of estate planning and will be happy to discuss all of the available options to help you make suitable arrangements tailored to your families’ circumstances and complexities.
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