Pros and cons of making a Will:
When you die 100% of your estate must be distributed.
Pros: A will allows you to choose how your estate and assets are divided, and who the beneficiaries will be.
Cons: If you die without a Will (dying intestate) the government will decide who receives your assets.
All estates must go through the probate process, with or without a will.
Pros: Having a will, however, speeds up the probate process and informs the court how you would like your estate divided. A Will also reduces probate fees of up to 5% of the estate value.
Cons : Probate courts serve the purpose of administering your estate, and when you die without a will (known as dying intestate), the court will decide how to divide estate without your input, which can also cause long, unnecessary delays. Without a will probate fees will be significantly higher.
All Estates over a certain amount will have to pay Inheritance tax
Pros: A will allows you to minimise your Inheritance taxes. The value of what you gift away to family members or charity will reduce the value of your estate when it is time to pay inheritance taxes.
Cons: if you die intestate your first next of Kin would receive all of your estate and have to pay 40% inheritance tax on anything above the allowable inheritance tax threshold.
A Lasting Power of Attorney (LPA)
If you lose mental capacity (i.e. have dementia, Alzheimer’s disease or have stroke) your bank accounts can be frozen to protect the vulnerable.
Pros: With a registered LPA in place, the people who you have appointed can legally access and deal with your financial affairs on your behalf, to access your bank accounts to pay your mortgage, rent and bills.
Cons: Without an LPA, you will be unable to pay your mortgage and your risk losing your home to repossession.
If you lose mental capacity who will look after you?:
Pros: With an LPA, your appointed attorneys can deal with all the decisions about your health and care which includes deciding where you live and who will look after you.
Cons: Without an LPA, local authorities may override your family’s wishes and decide to put you in a home.
What happens if I become unable to manage my own affairs:
Pros: With an LPA, your attorneys will be able to manage your financial and health affairs straight away which will save a great deal of money and distress.
Cons: Without a registered LPA in place, your family may seek to apply to the Court of Protection to have a deputy appointed to deal with your everyday financial and health matters. However this can be a very slow and expensive process, costing thousands of pounds just to be able to control your own finances.
A Family Asset Trust
Is my Will enough?
Pros: Assets held in the trust ensures that your assets will be protected for you beneficiaries for 125 years from the date it was set up . The Trust is flexible so your beneficiaries can withdraw assets at any time to enjoy them.
Cons: A Will can only dispose of assets that you own at the time of your death, and if the value is eroded during your lifetime, or if you go in care, there will be little if anything left for your beneficiaries.
What about the probate process?
Pros: There is no probate process or probate fees on assets held within a Trust, which means there is a potential saving of thousands of pounds by having a trust. Also by avoiding the probate process it means that your beneficiaries will receive their inheritance immediately.
Cons: Any assets not held in Trust will have to go through the probate process, and your executors will have to pay up to 5% of the estate value in probate fees to solicitors.
What happens if I go into care?
Pros: If your assets is in Trust, and you do not have a spouse or a dependant relative, you can decide if you wish to sell or rent your property. The property or proceeds from sale or rent will continue to be protected in the Trust for your beneficiaries.
Cons: Without assets being protected in a Trust, local authorities can decide whether to sell your assets to pay for care fees.
What happens if I lose mental capacity?
Pros: If your assets are held in trust, there is no court of protection control, meaning that your appointed trustees will continue to manage your assets on your behalf for your benefit.
Cons: If your assets are not in Trust, without an LPA, it could cost your family thousands of pounds to be able to manage your affairs.
What happens if I have no funeral plan, will my relatives have to pay for my funeral when I die?
Pros: A funeral plan will give you protection against the rising funeral costs which currently increase every April by 8%. A Funeral plans also prevents you leaving a financial burden for your relatives.
Cons: If you die without a funeral plan, your funeral may cost your family members thousands more than if you had taking out a funeral plan.
Why can’t my loved ones plan my funeral when I die?
Pros: A funeral plan will remove additional stress and worry from your family at what will inevitably be a difficult time. It also with give you peace of mind knowing that all of the funeral arrangements are taken care of with one phone call.
Cons: Without a funeral plan, your family will have to make numerous phones calls to plan your funeral whilst grieving and dealing with potentially avoidable stress.
Are funeral plans expensive?
Pros: Having a funeral plan freezes the cost of your funeral to the present days costs. Today’s average cost is £4000, so if you die in 20 years time when the average funeral will have increased significantly, you will save thousands of pounds with a funeral plan. There are flexible payment options available.
Cons: Without a funeral plan, your relatives may have to negotiate to hold off on paying for your funeral until probate and money is released, this may mean you will not have to type of funeral you want because of costs.
Contact Legal Minded Friends Today if you want to discuss any of the above with a professional on these matter’s there is no high pressure salesperson just a confidential chat information facts, and providing you with a service you require, to suit your needs.