Conversations with parents about their assets and what happens if they become incapable or die can be uncomfortable. The subject is complex, stressful and, quite frankly, facing one’s mortality isn’t something most people want to do. However, not having Wills and Powers of Attorney in place will have a huge impact on the family and every parent should address it before it is too late.
Here are ten reasons why your parents should look at their estate planning:
1. To avoid intestacy and unnecessary tax
If your parents die without a Will, the law of intestacy will govern how their estates will be inherited. This may cause the estate to be distributed in unexpected ways and even create unnecessary tax liabilities. Without a Will, there is no guarantee that their money and assets will go to who they want.
2. To prevent family disputes
Everybody knows somebody who has been through a complicated estate settlement. Your parents can avoid all of that by writing a Will and making their wishes known.
3. To keep heirlooms in the family
Your parents may want to leave specific items to specific people. They may have that classic china collection or a valuable painting or a watch which they wish to give to a chosen relative.
4. To leave the right people in charge
Your parents can choose the people they trust, who are organised and have the time to administer their estate. Even a simple estate can take around a year to administer.
5. To avoid the surviving spouse not having access to funds
By planning ahead, your parents can arrange their assets so that the first to die’s assets aren’t all frozen until the Grant of Probate has been obtained.
6. To communicate their funeral wishes
Your parents can leave guidance to family about their funeral wishes, such as where and how they would like this to take place. This helps the family ensure their parents’ wishes are carried out.
7. To protect assets
Your parents may be worried about a child divorcing. By making a Will they can set up a trust which will ring fence that child’s inheritance.
Trusts can also be helpful if your parents want to skip a generation and help their grandchildren. By including a trust in their Will, your parents can ensure their grandchildren receive their inheritance when they are mature and responsible enough to handle it.
8. To give to a charity they support
If your parents give to a charity, then they might be keen to support that charity after their death. Gifts to charity have the additional benefit of potentially reducing the Inheritance Tax liability of the estate.
Making a Will is a highly unselfish act – after all, your parents will not be around to see the benefits of their efforts. However, once their Wills are in place, they will have the peace of mind that their affairs are in order, and their loved ones will be taken care of.
10. To save loved ones the burden of making difficult decisions on their behalf
As part of their estate planning, your parents should also look at making Powers of Attorney so that they can choose who they want to manage their finances and make decisions about their health and welfare if they become unable to do so during their lifetime.
Alison Craggs / Anna Boucher