ESTATE PLANNING AND CORONAVIRUS

Nothing tends to focus the mind like a pandemic. It puts everything in perspective, and suddenly makes you wonder whether your existing estate planning arrangements are as effective as you originally thought they were? All in all, a review is in order. So, what should you be looking out for?

These are the main areas that should be at the top of your list.

Lasting Powers of Attorney

If you don’t have a Lasting Powers of Attorney (LPA), then you should seriously consider one now. Lasting Powers of Attorney enable your affairs to be looked after in the event of incapacity. There are two types of LPAs – Health & Welfare and Property & Financial Affairs which allow your nominated Attorneys to look after your affairs as if you were dealing with them yourself.

Without an LPA, all decisions need to be made by the Court of Protection – a slow, laborious and costly affair even before the shutdown. With the current situation, we struggle to think about how they might be effective.

Wills

If your Will is more than 5 years old, then now is a good time to review it. The rules around the Residence Nil Rate Band came in to force in 2017, enabling couples to leave up to ￡1m free of Inheritance Tax. However, we have often found that changes need to be made to Wills to take full advantage of these new rules.

We also recommend reviewing Letters of Wishes every 3 years, to make sure that they still reflect your wishes.

Trust Planning

For larger Estates, Trust planning is still one of the most effective tools to ensure that the right money goes to the right person at the right time. With today’s increasingly complicated families, many parents and grandparents want to make sure that any inheritance goes to their bloodline, rather than the person that their child or grandchild no longer chooses to live with.

Trust planning enables the funds to be used exactly as you wish during your lifetime but enables a high degree of control upon death.

Many types of assets can have Trusts placed around them, including pensions, businesses, as well as the residual estate.

Does the current lockdown prevent any new planning?

New planning has definitely become more difficult, but there are ways to get new planning in place.

The Law Society and the Ministry of Justice are currently discussing ways to shake up the current rules around the signing of Wills and registration of Lasting Powers of Attorney. Currently, a Will must be signed by the Testator in the presence of two independent witnesses not named in the will. 

With the current rules on social distancing in place getting external attendance for such a signing is proving a challenge.

However, there are several methods that are already being used elsewhere on the table for reform, including an Australian-style approach giving judges more flexibility when deciding what constitutes a Will; a European-style system where testators can write their Wills by hand without witnesses; and a process where Wills could be witnessed electronically.

How is the current crisis affecting the families of the deceased?

We do anticipate that the Probate process will take longer as both HMRC and the Probate Registry experience staff reductions due to self-isolation in line with current Government recommendations.

Whilst we are confident that the Probate Registry will remain open over the coming weeks, it may just take more time than usual to process claims, especially if there are multiple facets involved such as needing to speak with the land registry.

What are the learning points?

Get your Wills out and check they are still relevant and reflect your wishes. If you are unsure about anything then please send your Wills over to us and we can check them for you and organise for any amendments to be made.

If you haven’t put Lasting Powers of Attorney in place yet, then this is a great time to get them sorted. Online completion of the forms has never been easier, and you could well have plenty of time on your hands over the next few weeks. There is only so much daytime TV that anyone can take.

Lastly, this could also be a great time to review everything to do with your Estate Planning with one of our Wealth Strategists. We are holding meetings via video or telephone during normal office hours. Please get in touch and we will be happy to help you.