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Do you have Power of Attorney and the CORRECT Will in place?
In association with Countrywide Tax & Trust Corporation Ltd
01243 710214
Educational Videos/Cartoons
Below you can look at our easy to understand video/cartoon concepts across the following areas (transcript included):
Lasting Powers of Attorney
Make a Will
Protecting Your Assets
Marriage After Death (MAD)
Long Term Care
Divorce of Beneficiaries
Generational IHT
Creditors and Bankruptcy
Lasting Powers of Attorney
00:05 As we get older, we become more prone to illness and injuries, and the loss of mobility can make it difficult to manage our affairs. We are all living longer, but some of those later years are often in poor health, with the ever-present threat of the loss of capacity to consider. An elderly relative losing capacity is difficult enough for loved ones to deal with, without the added worry that their finances become muddled.
00:32 You might be forgiven for thinking that this doesn't apply to you as you are nowhere near approaching your dotage, but you couldn't be more wrong. What if for some reason you became really ill or were involved in an accident and were held in a coma for a period of time? How would you pay your bills and manage your affairs? The prospect of unpaid bills can cause unnecessary stress and anxiety and delay someone's recovery.
01:00 You might be thinking, well, that's okay, I have a joint bank account, so I'd be able to carry on as normal. Wrong. The banks deal with joint accounts very differently. When a joint account holder loses capacity, the account is closed for all transactions other than for emergencies, until a deputy has been appointed by the Court of Protection. This can be a long and costly process, often taking longer than nine months, with no bills being paid.
01:28 What if you had a business? Who would make decisions on your behalf? What happens to any property or other assets you hold jointly with someone and one of you later loses capacity? What if you are in your retirement and have taken out an equity release on your property and wish to make a further drawdown of cash after your partner or spouse has lost the capability to sign? Perhaps you wanted the cash to pay for their care?
01:53 Many of these schemes will not now allow you to make the drawdown if one of you is no longer able to sign. By setting up a lasting power of attorney, you can authorize someone you trust to administer your financial responsibilities on your behalf. This could include selling property, managing your investments, paying bills, even running your business.
02:16 Let's also suppose the worst were to happen and you needed someone to make decisions for you regarding your medical treatment to ensure your wishes were met. You probably assumed that, if you were unable to make these decisions for yourself, then a family member could, but you would be wrong. Without setting up a lasting power of attorney to cover your health needs, loved ones will not be able to make decisions about which health care you receive or even which home you live in.
02:46 A lasting power of attorney is a powerful document. It must be set up with someone you can totally trust with your assets and who is a responsible person. It's vital then that the document is created by someone who knows exactly what they are doing. By establishing a property and finance and a health and welfare power of attorney in advance means that you choose who makes those vital decisions for you, rather than some faceless authority.
03:13 So if the worst were to happen, you can rest assured that both your financial affairs and personal welfare is in safe hands.
Make a Will
00:05 You might think making a will is not that important. It's something you'll get round to later. But if you heard what your non-will would sound like to your loved ones, you might change your mind.
00:16 To my family and loved ones, I hereby leave to you several months, possibly years, of financial hardship and expense, whilst you go to unnecessary lengths to sort out my affairs. To my spouse or partner, I hereby leave you some, but probably not all, of what I own.
00:35 To my children, I hereby leave you the remainder of my estate, including the family home which you must sell to realize your inheritance. To social services, if my children are orphaned on my death, then I give you the power to choose who shall look after them, including sending them to unknown foster parents. To the taxman, I hereby leave you all the tax that I could have avoided paying and would have been able to leave to my family.
01:03 To the local authority, I hereby authorize you to force the sale of my house and to liquidate any investments I have to pay for my care. I realize that this could make the local authority one of the major beneficiaries to my estate. To my disabled family members, I hereby leave you funds to replace any state-funded benefits you receive so the state can give that money to others who are not related to me.
01:28 To my children and grandchildren, if you get divorced, I hereby instruct you to ensure that half of what I left you is payable to your ex-partner, so they have ample money to look after their new spouse and any children they may have. To my bank and or solicitor, I hereby authorize you to charge whatever you feel necessary to sort out the mess that I've left behind. To everyone else, I leave you nothing.
01:55 The absence of a will can cause problems, heartbreak, financial hardship and unnecessary expense for your family at the very worst possible time. Everybody needs a will. Make yours today
Protecting Your Assets
00:05 Despite the recession, house prices are still through the roof. What with the mortgage companies requiring huge deposits as well, you have to feel sorry for the youngsters today. When we bought our house, it was straightforward. There were plenty of mortgages about and you only needed a small deposit. As long as you had a good job, it was quite easy to buy your own house.
00:28 But the kids today, they have it tough. In the back of your mind, do you hope that when you're gone you can finally give them that helping hand? By then, your house should be completely paid for. When you die and they sell your house, maybe they can finally clear all those college fees and still have enough left over for a deposit for their own home, or maybe even start their own business.
00:53 But without a will your money may not end up where you hoped it would. With no will you lose control of what happens to your money. The state and the law takes over and your intended beneficiaries might just end up with literally nothing. If you have young children it gets worse. If you both die, say in a car crash, and you don't have a will, then you'll have no appointed legal guardians. Your children will be placed in the care of the local authorities.
01:21 Do you really want that for them, just after the trauma of losing you? Wouldn't it be better if they were supported by friends and family? You could bequeath their guardians some money to help with their increased bills. Congratulations if you already have a will, but wait before you feel too smug. Your money could still be at risk, and end up somewhere that you hadn't intended. Most wills are drawn up with your partner as your sole beneficiary, then your children.
01:52 Good, but what happens if you die, leaving all your money to your partner and they then remarry? Now your money could be bequeathed to their new spouse and their children too, reducing the amount your children receive. Worse still, if your surviving partner then dies, their new partner could end up getting all your money, and could then write your children out of the will totally, not exactly what you had in mind.
02:18 If all goes well and your children do actually inherit everything, things can still go wrong. Suppose your child marries and then later divorces. Their ex-partner could be entitled to half your money. Are you happy with that? Or they could hit financial difficulties and your bequest could be lost to their creditors or in a bankruptcy lawsuit.
02:41 Even before you die, if you don't plan carefully, you could lose your home paying for care costs in your senior years. The result? Less cash to pass on to your children. Don't let the state take and waste your money. The next time you're in a crowded room, look around you. Two out of every three people there will have no will whatsoever.
03:03 Be the smart one that does. It's no good hoping that your wishes will be carried out. Take control, write a will. You can control your money after you die, but only if you take action now.
Marriage After Death (MAD)
00:05 You probably have clear ideas about what will happen to your estate when you die. First you want your money to pass to your partner, then eventually you want your money to go to your children. However, do you realize that even if you have a will, what you wish for may not actually happen? How does that make you feel? Surprised? Angry? Disbelief? Here's what could happen.
00:28 Following your death, you sincerely hope that your partner finds someone new. After all, you want them to be happy. But do you realize that when your partner remarries, everything you leave will become jointly owned with that new person? Consider what happens if eventually that new marriage breaks down. At least half of everything you worked so hard for could be lost in the divorce settlement.
00:54 Or what if the new marriage succeeds, then your partner dies first before their new partner? Now all your assets could be in the hands of complete strangers. If they don't get on with your children, your kids could get nothing. Picture your children's inheritance being spent by people you don't even know. Do you think that's right? Your children could be completely disinherited.
01:19 Simply setting up a trust alongside your will enables your partner to benefit fully from your assets. But more importantly, ensures your children's inheritance is fully protected. Make sure that what you want to happen actually happens. Don't let others benefit from your hard work at the expense of your children.
Long Term Care
00:04 If you are like most married couples, you probably know who you're going to leave your home to when you die. Worryingly, if you and your partner own the property jointly, then your plans may not be realized. Imagine the council taking away your home from your children after you'd slaved your entire life to pay off the mortgage. How does that make you feel? Angry? Worried? Concerned?
00:31 Owning a property jointly means you and your partner each own 100%, so when you die it will pass over to your other half absolutely. You might be thinking that's fine, but what happens if your partner later goes into care and has no money to pay for it? The council can force you to sell your house to pay for care fees, leaving your children without the legacy you hoped to leave.
00:57 40,000 people are forced to sell their homes every year in the UK to pay for care, negating all your hard work to secure the future for your family. Happily, this can all be avoided if you put the wheels in motion now, long before you need to think about going into care.
01:16 Simply by changing the ownership of your property to tenants in common and setting up a simple trust, you can protect your home from the money grabbing local authority and make sure your children and future generations benefit.
Divorce of Beneficiaries
00:04 Here's the sad thing. Even if you set up a will and you have very clear ideas regarding your beneficiaries, what you've planned may not actually happen. Like most couples with a will, you've bequeathed each other your entire estate, and then it passes on to your children. The kids grow up, marry, and later go on to have children themselves. Then in later years after you both die, your children will inherit all your assets.
00:31 Bearing in mind that nearly half of marriages in Britain end in divorce, what will happen to their inheritance if they do separate? Your child's partner will be entitled to at least half the money you left them. That's not exactly what you had in mind. Your money will go to someone else, not your children, not your grandchildren. Your first thoughts might be, well, that's life, there's nothing I can do about that. Unfortunately, what will be will be.
00:59 But this is not true. You have more power over your money. You can control what happens to it, even after you've gone. Setting up a simple trust alongside your will ensures your money goes where you want it to go. And more importantly, it stays there, with your children and your grandchildren.
Generational IHT
Here's a tax fact that may make you more than a little angry. Your children, even your grandchildren, may have to pay tax on money that you've already paid tax on. The tax is called generational inheritance tax. It's a crafty inland revenue scheme that allows the taxman to tax your money for generation after generation. If you and your partner have traditional mirror wills, then your money is under threat.
00:31 The first to die leaves everything to the other, before passing absolutely to your children. Inheritance tax is due and your children must pay it. Whilst you might not agree with the 40% tax, you can accept that it's just the way it is and move on. That's life. Well, assuming your children make similar wills, leaving everything to their kids absolutely, your grandchildren will also end up paying tax on the same assets.
00:57 The taxman repeatedly pockets your family's money as the inheritance is passed down the family through this stealth tax. You have every right to feel angry and confused. It can all be prevented though. Setting up a simple trust in conjunction with a will today can ensure the taxman only gets one bite at your children's inheritance. Make sure you maximize your family's inheritance and stop the Inland Revenue taking your money.
Creditors and Bankruptcy
00:04 When your beneficiaries inherit from a standard or mirror will, it leaves that inheritance open to attack. Your hard-earned money could be wasted.
00:14 For instance, suppose one of your children uses the legacy you left them to start a new business, and like 80% of brand new startups, it runs into trouble financially. The bank could decide that enough is enough and calls in the loan, resulting in the business closing. Or perhaps your beneficiaries can't handle large amounts of cash, burning their inheritance on fast cars and living the high life, running up huge credit card debts and short-term loans.
00:42 Either way, they could end up with a string of county court judgments or a bankruptcy suit. Not quite what you'd planned, paying off the creditor's debts using your money. Setting up a simple trust alongside your will could have protected that money from the courts, and you could ensure that your children and future generations enjoy their inheritance from your estate for years to come
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