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FAQ’s – Protecting Your Wealth

Posted on May 28, 2013 in Articles & Frank Taylor & Associates & Insurance

Protecting my Wealth

1.)    Why do I need  a Will?

Without a will:

  • You cannot be sure those you would wish to benefit will actually do so
  • Your spouse/Civil partner will not automatically inherit ALL of your estate
  • ‘Common Law’ partners may not receive anything
  • Minor children could be taken into care whilst Guardians are appointed
  • There could be lengthy delays for your beneficiaries and disputes

2.)    Can I appoint family members as Trustees for my Will?

Not choosing a Professional Trustee could mean your beneficiaries lose out:

  • Where Trustees are also named as beneficiaries this often leads to disputes
  • A professional trustee is completely unbiased and will uphold the Settlor’s wishes
  • A professional trustee will ensure the beneficiaries inheritance is protected
  • A professional trustee will advise on any tax saving strategies available

The points above highlight the advantages of using a Professional Trustee, so it is normally good practice to have at least one Professional Trustee amongst your other nominated trustees.  The charges for professional trustees vary significantly so it is best to get a few quotes before deciding on who to use.

3.)    How much Life Insurance do I need to provide my family with on my death?

Typically most clients have a life insurance policy to cover their mortgage, however you have to consider several other factors, these include covering any other debts, like credit cards, personal loans, hire purchase agreements. In addition, in the event of your death you may also wish to provide a lump sum for your children’s education.  Life insurance policies should also be put in Trust, this will ensure that the proceeds are not subject to inheritance tax and can be paid out quicker.
A financial adviser can advise you of the correct cover for your circumstance.

4.)    In the event of me falling seriously ill or in a bad accident, can my Wife/Husband/Partner make decisions for me, if I can’t?

In the event of you being unable to make decisions due to being incapacitated, unless you have a Lasting Power of Attorney (LPA) in place the state would make decisions for you. This can be a very distressing situation for families.

To ensure that your loved ones can make decisions for you, you would need to have a Lasting Power of Attorney put in place, there are two situations where an LPA can be used, 1- for Health and Welfare and 2- for Property and Financial Affairs. This would give the person you nominate to make decisions for you with regards to health matters, for example which hospital to put you in or which care home to use for your long term care. Secondly, the nominated person can also withdraw funds from your account to pay for Doctors/nursing care and make decisions about your property affairs.

5.)    How can I protect my house from Care costs?

If you and your Wife/Husband/partner want to protect your house and pass it onto your children, the house would need to be owned as Tenants in Common and not Joint Tenancy. In the event of one of you dying the deceased persons share would go into their estate, which could stipulate in the Will that it is for the children. If the remaining person goes into care, the house could not be assessed for care fees.

6.)    I have a lump sum of money that I want to leave to my family and children, how can I protect it from care costs?

One way of doing this may be by the use of an Investment Bond in Trust, it’s best to speak to an Independent Financial Adviser for more advice on how to go about it.

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