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The importance of making a Lasting Power of Attorney (LPA)

According to Alzheimer’s Research, the UK’s leading dementia research charity, the number of people with dementia is projected to increase rapidly in the next few decades, mainly due to increases in life expectancy – many of us living longer but with associated health issues.

It is estimated that one million people in the UK will have dementia by 2025, and this will increase to two million by 2050.

These are certainly worrying statistics and it does appear that we may be heading towards a crisis. The figures quoted are scarily large and brings with it a host of concerns and issues, caused by the gap between the rising number of us facing incapacity (due to age and conditions like Alzheimer’s and dementia), compared with too few people taking action to plan ahead for loss of capacity by making a Lasting Power of Attorney.

Health is a lottery, none of us know what conditions we may be diagnosed with in the future, the same way we can’t predict or foresee an accident. However we all run the risk of becoming incapacitated, and everyone should have a Lasting Power of Attorney in place so that in the event of it happening to us, we have nominated someone that we choose to step in and look after us in our moment of need, be it a relative, family friend, spouse or partner by taking control and making a Lasting Power of Attorney you have a say as to who can act for you

With 12.5 million people in the UK over the age of 65 and only just under 1 million LPA’s registered with the Court of Protection, we should all take this research seriously and take control to ensure we have the people we trust making decisions on our behalf.

Did you know the Inheritance Tax Rate is a huge 40%?

And that the tax bill needs to be paid before your loved one inherits? This can often cause unnecessary worry and stress at a time of grief and bereavement.

To makes things worse Inheritance tax receipts for December 2022 totalled £545 million, up from £474 million in the same month a year ago. For the final quarter of the calendar year, the tax take hit £1.8 billion – the highest total on record and up from £1.4 billion last year.

Its looking likely the Treasury will collect a record amount of cash from inheritance tax this financial year with forecasts predicting nearly £8 billion will be raised. The troubling part is that many families simply are not aware that the level of their assets trigger a liability to tax, often until its too late.

inheritance Tax is an avoidable tax and only paid by those who fail to plan for it, the tax liability is calculated on the total value of your estate after all applicable allowances. A combination of factors, such as the freeze on the nil-rate band and rising property prices have contributed to the hike in tax.

In addition the fact that new reliefs have to be claimed by executors rather than granted automatically like the NRB (nil rate band) puts additional strain on non-professional executors who may often simply overlook the additional reliefs available and pay more tax then is necessary.

How you structure your assets again plays a huge part, indeed more than 6,000 estates have paid inheritance tax (IHT) on life insurance policies which could have been excluded if their policy was written into a trust, according to HMRC data. These policies were worth a total £709m, meaning that more than £280m of IHT may have paid out on them. However, if the policies were written into a trust, they would not normally form part of the deceased’s estate and would therefore not be liable for IHT.

It is this combination of factors that sadly continues to increase the levels of Inheritance tax being paid, often unnecessarily. It should serve as a reminder of the importance of regularly assessing the value of your estate which includes getting an up-to-date valuation of any owned property and investments. It is pointless to focus solely on growing your estate and doing nothing to protect your IHT level as your are simply growing your assets only to give it to the tax man on your death.

Our Professional advisors will help you work out the total value of your estate, calculate how much tax you may be likely to owe and understand what options you have to manage that tax bill.

With the right Will and Planning in place, you can protect your loved ones and secure your family’s inheritance.

Going into care- should you be concerned?

Nobody likes to think about going into care; for many people, it’ll be years before they even have to consider it, and some people won’t ever need to go into care at all. But is it really something you can afford to put off thinking about?

Let’s take a look at the facts. Care fees are more expensive than ever before;  an average of £30,000 per year. To make matters even worse, the cost of care is rising ten times faster than average pensioner income, and with interest rates at record lows it’ll be impossible for most pensioners to pay for care whilst also leaving something behind for their loved ones. It is estimated that close to 200,000 homes are sold every year so that their owners can afford to pay their care fees.

You may think this doesn’t apply to you, because your family will look after you rather than placing you in residential care. We’d all like to think this is true, but we also have no idea what awaits us in old age. Countless problems could befall us- do you really want your family to struggle to care for you whilst trying to juggle their own lives, their careers and their families? It may be simply not possible to care for you at home- then, the only choice is care.

However, that’s not to say you should be worried. Care homes are specialist facilities designed to provide the highest possible standard of care to those who need it. In addition, despite their cost, it is entirely possible to leave something behind for your loved ones after all.

By utilising special provisions in your Will, you can place your assets into trust. This safeguards them from care authority means testing, but it must be done sooner rather than later; this may be seen as “deliberate deprivation” if done too late. It is entirely legal and has been used by very wealthy people for centuries, but you don’t have to be an aristocrat to protect what you’ve worked hard your whole life for.

Speak to Accord Legal Services today on 01744 807048 for more information or to book a free home consultation.

Guardianship and making provisions for your children in your Will

Your Will is a powerful and important documents for many reasons. The main reason often given for making one is that the Testator- the person making the Will- wants to protect their assets from losses. They may just want to give themselves greater control over what happens to their estate after they’re gone.

However, an often under-appreciated reason for making a Will is the ability to appoint guardians within one.

What is a guardian?

A guardian is the person a parent appoints to look after their young children (under 18) should anything happen that prevents them from doing so themselves. They may be close relatives such as the child’s grandparents, or even trusted friends. Crucially, the only place to legally nominate guardians is within a Will.

Why is it so important to have them?

Without making a Will, and therefore without nominating guardians, your young children may be left in a difficult position should anything happen to you and their other parent. They may be placed within the social care system whilst the law finds suitable guardians for them. This may result in your children staying in care longer than they need to, or worse- the law appointing somebody that you absolutely did not want to be your children’s guardian, such as an estranged relative!

How easy is it to do?

It couldn’t be simpler. Whilst making your Will with Accord Legal Services, you will be asked about any children you have, including their age and any plans you have for future children. If applicable, you will be asked about your choice of guardian; this will be written into your Will at no extra cost.

For advice on your Will tailored to your circumstances, call Accord today, on 01744 807048.

Planning ahead- your funeral and your Will

For many people, death can be an uncomfortable topic of conversation; perhaps this is why so many of us have yet to make a Will. However, as anybody who has lost a relative will know, losing somebody is even more emotionally challenging if the right preparations haven’t been made.

Nobody knows what’s around the corner; we’ve talked at length in previous articles about how important it is to make your Will to protect your assets and your loved ones, but did you know that you can also make funeral arrangements in your Will?

Have the conversation early

The conversation about your funeral should not be put off until it’s too late. On the surface, a funeral may seem straightforward enough, but there is much to consider; what would you like to happen to your body? Would you like to donate your organs? What are the plans for after the service?

If you know the answers to these questions already, it is in your best interests to discuss your wishes with somebody you trust, to give you the peace of mind that your wishes will be acted upon.

Your decision

If you know what you’d like for your funeral, it’s important that your voice is heard. By planning for your funeral in your Will, you are providing your loved ones with a permanent record of your wishes, one that cannot be altered or revoked by anybody except you. This ensures your funeral is your decision, and that your wishes will be heard when the time comes.

You should also record your wishes on a separate document, advising someone you trust that the document exists. This can help to give your wishes more legitimacy having been recorded separately as well as in your Will. Ensure that this document can be verified as yours!

Keep your loved ones updated

A Will should certainly be a private document, but it’s important to let those closest to you know that you have one and where it can be found after you’re gone. You could create the perfect Will that states your wishes to the letter, but if it can’t be found when the time comes, it’s useless!

Always keep your Will in a safe place; Accord can even store your Will for you, keeping it safe and secure until the time comes.

What next?

if you’ve still not made a Will, it’s vital to act sooner rather than later. If you’ve made your Will already, ensure you keep it up to date with your funeral wishes.

Whether it’s to make a new Will or review an existing one, Accord Legal Services can help. Give us a call today, on 01744 807048.

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