Benefit from peace of mind and arrange the send-off you want by paying for funeral director services in advance, avoiding potential future increases in these costs.
Legal and Financial Matters
What would you like to happen to your money and property? Thinking about this now can help give you peace of mind.
This guide covers some key legal and financial areas you may want to consider:
- lasting power of attorney for property and financial matters
- making a will
- inheritance tax.
Lasting power of attorney for property and financial matters
A lasting power of attorney for property and financial matters is an important legal document. It gives the person or people you appoint (your ‘attorneys’) the authority to make decisions about your finances if you lose the mental capacity to make and communicate decisions for yourself.
You can specify in advance which decisions your attorney can make, and they must keep accounts and make sure your money is kept separate from theirs.
Making a will is a sensible course of action regardless of your age or health condition. Planning for money and treasured possessions to go to the people or causes you care about the most will give peace of mind when the time comes.
The process may include consideration of your money, possessions and any property and investments, including digital assets such as social media accounts, photographs, music libraries and online accounts. These are all part of your estate, so deciding who you’d like to receive each aspect could help put your mind at rest now and pave the way for a less distressing experience for your loved ones.
There are a number of different ways to make a will; lawyers, professional will writers, charities, some banks, and you can even write it yourself. However, it is worth taking advice and looking into the options before deciding what’s right for you. The more involved your will is, the more important it is to have professional guidance.
In all cases, you must get your will formally witnessed and signed for it to be legally valid.
The standard inheritance tax rate is 40% and is charged on the value of your estate above the threshold of £325,000. Usually, no tax is payable on the first £325,000.
Making a will can help you ensure you do not pay more inheritance tax than you need to. There are inheritance tax exemptions and implications that you should bear in mind when writing your will:
- If you leave everything above £325,000 to your husband or wife, registered civil partner, a charity or a community amateur sports club, no inheritance tax is payable
- If you leave your home to children or grandchildren (including adopted, foster or step-children), your threshold could increase to £500,000, so the tax would be payable on the value over £500,000
- If a husband, wife or civil partner doesn’t use all of their £325,000 tax-free limits, then any unused amount can be passed on to their surviving partner
- If you leave 10% or more of the net value of your estate to charity, then a reduced inheritance rate of 36% may apply
- Some gifts you give now could be taxed after your death, depending on the amount and when they were made.
As you can see, inheritance tax can be complicated, so seeking professional advice is often beneficial, and it can be helpful to do this when making your will.