Whether you’re a new mother, an older mother, or even a child to a brilliant mother, Mother’s Day is a good time for reflection.
Mother’s day is a good excuse for breakfast in bed, being showered with gifts and receiving lots of attention from your family. It is also a good opportunity to stop, sit down and consider your, and your loved ones, personal affairs. While taking a time out, you can ask yourself questions such as, does my mother have a power of attorney in place? Have I appointed a guardian for my children in my will? How can I protect my assets for the benefit of my family? Planning for your future, and also the future of your family, is extremely important.
Why should I have a will?
Having a will allows you to take control of who will inherit your estate at the time of your death. A will allows you to include appropriate trust provisions for young beneficiaries (children under the age of 16) and also include instruction on who you would like to appoint as a guardian for your young children. If you die without a will (known as dying “intestate”), it is the law that decides how your estate is distributed, meaning that those closest to you may get nothing and those you did not wish to benefit may get it all. A will can be tailored to reflect your wishes and circumstances. Be it the simplest or most complex of arrangements, the result will be the same – peace of mind.
Why should I have a power of attorney?
A power of attorney allows someone else to have the ability to look after your affairs in the event you become incapacitated. This document allows someone you trust to make decisions about your finances and your welfare. Spouses and children have no default power as “next of kin” to make decisions on your behalf if you lose or have diminished capacity. While many people associate a power of attorney with old age, anyone could be in an accident and find that they are unable to look after themselves and their affairs. If you don’t have a power of attorney in place and you need one, the alternative is a guardianship order. This is a court process which is time consuming and costly.
How can I protect my assets?
As we have seen in our recent blog, there is an increase in the amount of inheritance tax being paid on death. Inheritance tax is just one reason to undertake estate planning. Another reason is asset protection. Perhaps you have children or grandchildren who you would like to make provision for, but they are too young to receive a significant amount of money. Perhaps you would like the money to be used sensibly, towards education or buying a property. Trusts can be used as an effective tool to mitigate inheritance tax and also provide protection of the assets while allowing you to retain an element of control.
There can also be very valuable benefits that we think less about such as pension death benefits or death in service through employment. Again, you would wish to make sure these are available for your loved ones promptly and tax efficiently.
If you would like to discuss any of the issues raised, please get in touch with your usual contact in Brodies’ Personal & Family department, or telephone 01224 392 242 to speak with a member of the team.
On April 2, 2019