Price Bailey's six part Life and Estate Planning video series features Donna Mahoney a Senior Manager from the tax team. Donna guides our clients through the key considerations when planning and making decisions for your life and estate once you pass, with the key focus being on preparedness.
Despite end of life planning often being an uncomfortable and avoided conversation, it is important to ensure that those around you are aware of your wishes with the hope of minimising the difficult decisions that otherwise need to be made once you pass.
The video series focuses on 6 different aspects of end of life planning:
1. An introduction to end of life planning and why it is so important.
2. The importance of Will writing, and when you should consider writing a Will.
3. Wills for business owners and what must be communicated to ensure that the business is suitably maintained after death.
4. The importance of having a Power of Attorney (PoA) and discussion surrounding who and when to appoint a PoA.
5. Overseas assets and writing a Will in a different jurisdiction in order to minimise complications.
6. Our final video in the series discusses further practical considerations from passwords, funeral preferences and PoA's.
Consulting advice from our experts and ensuring preparedness of the correct legal documents can ease the burden to those closest to you. Should you have any questions regarding any of the topics covered in the video series, or wish to contact one of our experts please use the form below.
Part 1: The importance of life and estate planning
There are many considerations to bear in mind when planning and making decisions for your life and estate. In this series of short videos, Donna Mahoney discusses the different areas you should be thinking when doing so.
In our first video, we discuss the topic of end of life planning and why it is important to plan for this as early as possible, even though it can sometimes be uncomfortable to do so.
This video covers:
- What end of life planning is and why it is important,
- who should be considering this,
- what concerns around finances you may have.,
- whether the joint 'owner' of a bank account can access funds after the other person passes,
- whether there are any assets that someone left behind can access quicker compared to waiting for probate,
- and if life insurance funds are subject to Inheritance Tax (IHT).
If you have any questions regarding life and estate planning your can contact Heidi or Donna using the form below.
Transcript:
Why is End of Life Planning important, and what does it mean?
Interviewer:
"Lots of people would think about End of Life Planning as just writing a Will, but our clients have told us that there's so much more that they need. It's financial decisions legal decisions, practical decisions and considerations that will help their loved ones when they've passed, making some sort of good decisions, sorting out the finances, arranging the funeral, and those sort of practical considerations that they might not have thought about."
Is this something that is just relevant to the elderly or people that are ill?
Interviewer:
"Certainly not. We should all be putting plans in place for our later life. We obviously don't know when our death will come, and I think it's giving loved ones the reassurance that plans have been put in place to deal with things when they're no longer there.
From an accountancy perspective, I know one of the things that affects loved ones is money."
How can our clients support themselves regarding finances?
Donna Mahoney, Senior Manager, Tax team:
"I've seen that the concerns about finances depend on the individual circumstances. So, a married couple might have different concerns than somebody who's maybe single.
So the married couple, for example, they'd want to make sure that the surviving individual out of the pair of them has sufficient funds to be able to continue after their loved one's death. Because when somebody passes away, bank accounts are often frozen, but that's only single bank accounts. So one bit of simple advice that I do give clients is to have some joint bank accounts.
It is a case of just reviewing your finances to see where the funds will continue flowing from and what commitments are out there- perhaps something more of a concern to younger individuals who might have borrowings and financial commitments as opposed to a retired couple who are just really making sure that."
A joint account is unaffected by death. Is that so that the joint owner of the account can still access those funds?
Donna Mahoney, Senior Manager, Tax team:
"That's right, yes. So if you've got a joint bank account when somebody passes away, the banks are very quick to pass that into the sole ownership, surviving owner of that account.
There's no time delay, no requirement for grant of probate. It's definitely a tick on the easy and practical to do list."
Are there any other sort of assets or something that the one who's left behind can access quicker than waiting for probate?
Donna Mahoney, Senior Manager, Tax team:
"One thing that is often accessed relatively quickly is life insurance. That wouldn't need to wait for a grant of probate. If they are written in trust, the trustees of the policy can pay those funds out and they are very useful for paying Inheritance Tax.
Are life insurance funds subject to Inheritance Tax?
Donna Mahoney, Senior Manager, Tax team:
"Not if they are written into trust, which is often what we find they are."
Interviewer:
So, this could be a useful tax planning strategy. Because one of the things we talk to our clients about in End of Life planning is finances with an eye on Inheritance Tax and the steps that they can take to mitigate that bill at the end of the day."
– Transcript ends –
Part 2: Wills for individuals
In the second part of our life and estate planning series, Donna Mahoney discusses why writing a Will is so important, and what will happen if you do not do so.
In this video we consider:
- What happens if you do not write a Will,
- what practicalities to consider when writing a Will,
- the importance of open communication with your relatives and friends during this time,
- and why you should consider writing a Will at a younger age.
You can watch the video below. At Price Bailey, our Will writers are members of the internationally recognised Society of Trust and Estate Practitioners (STEP), and also hold advanced certificates in Will writing. We also have access to qualified accountants, solicitors, and tax advisors, which is crucial in particular for larger and more complex estates. If you would like advice or support writing a Will, you can contact Heidi using the form below.
Transcript
Interviewer:
"I think a Will puts you back in the driving seat as to what's going to happen with your estate. If you've got no Will we have a set of legislation that determines how your estate is to be distributed, and that's effectively decided by the Government in an Act of Parliament.
Very often people want different divisions than set out in that legislation, particularly if they have an unmarried partner, or they care for stepchildren, because the legislation is quite old-fashioned and doesn't perhaps reflect current marital and non-marital arrangements. Blended families aren't very well catered for in that legislation.
A Will is a very good idea to ensure the estate goes to the people that you want to inherit.
You can also deal with some of the more practical things in that Will, such as choosing what's going to happen with a pet, which is obviously very important if you are the last one. If you haven't got a widow or a widower, guardianship of children is important and something that can go in a Will. It gives people a lot of reassurance that they've made those decisions so that people do know what they want to happen when they've passed away.
Donna Mahoney, Senior Manager, Tax team:
I think there are also a lot of things that perhaps you wouldn't see in a Will that need to be communicated. You mentioned pets, children you know, just generally people's wishes. Part of planning for later life or the end of life is communication with those people close to you as to what you wish to happen.
Also just general things such as letting people know that you have life policy. Another practical thing I would mention is noting down who your advisors are and who your loved ones should reach out to on the event of your death. Whether that's your financial advisor who looks after your financial affairs, your investments, and maybe somebody different who supports your pension. The full list of things like that would help the surviving.
Interviewer:
Lots of people have a Will and have put things in place, they have made decisions, and they've made wise investments, but if their loved ones who are left behind don't know where all that documentation is, actually lots of things can be missed.
Dealing with the probate can be very complicated and there can be huge delays. So I do think communication is the key.
It's a difficult conversation to have and nobody really wants to talk about it, but having those discussions, perhaps not at the end of life, but much earlier, for example, younger people doing this.
It's a really good idea to share some of the wishes that you have. You might not want everyone to know what investments you've got, how much money you have, or how many assets you own, but at least if they know where to look or who to ask about these things when you've gone is a great help. For example, who is your financial advisor? Who is your accountant? Which solicitor do you use?
Donna Mahoney, Senior Manager, Tax team:
It's not necessarily going into the details of the Inheritance Tax planning or the reasons behind the Will writing, it's the practical steps that also matter."
– Transcript ends –
Part 3: Wills for business owners
In our third video in the series Donna discusses why Wills for business owners are so important and what you should consider when writing one.
This video covers:
- why you should decide if you would be comfortable with your business continuing or if you would prefer it to close after your passing,
- who you should communicate your wishes to,
- and the different considerations for sole traders, shareholders, and partnerships.
You can read more about what you should consider when writing a Will as a business owner in our article here.
If you have any questions regarding life and estate planning your can contact Donna using the form below.
Transcript
Donna Mahoney, Senior Manager, Tax team:
If we've got somebody who is perhaps a sole trader or business owner, the question of what would happen to their business should they pass away is key. It can be as simple as considering whether their family should continue with the business or if I feel comfortable for them to sell it or close it. As well as the day-to-day things such as who is going to be there the day after you pass, or the weeks or so after, even making sure the costs are looked after. Business owners must think about these things and communicate that to close friends or business partners.
Interviewer:
Is there something different you would consider if you were a sole trader or a shareholder, or a partner?
Donna Mahoney, Senior Manager, Tax team:
In corporate situations, shareholders should make sure that there
articles for their company structure enables their shares to be
passed onto whoever they wish them to. Some articles of
associations do have restrictions in, so that is something that
would go hand in hand with inheritance tax planning and Will
writing to ensure their wishes are capable of being made. For
directors, having a second director in place is crucial to continue
to run the business when you pass away. In a partnership, it may be
less of a concern because you are working in partnership with other
people, again you may want to look at the skill sets of your
partners and make sure that they are proficient and that in the
short term the business can buy the skills in from elsewhere
maybe.
Part 4: The importance of Power of Attorneys
In the fourth part of our Life and Estate Planning series, Donna Mahoney a Senior Manager in our Tax team, discusses the importance of having Power of Attorneys (PoA) as part of planning for your estate once you have passed.
We cover:
- what PoA are,
- what does a PoA do,
- when you should appoint your PoA
- the difference between financial and health PoA, and
- the importance of having an appropriate PoA whom you trust.
If you have any questions regarding life and estate planning your can contact Heidi or Donna using the form below.
Transcript
Interviewer:
There is often a period of time before death where you are still alive but lack capacity either physical or mental to make decisions, run your business, what should people do to cover that period of time?
Donna Mahoney, Senior Manager, Tax team:
In that period of time that can come at any age it would be important to put a lasting power of attorney in place so you're legally appointing attorneys to make those decisions on your behalf. And that is something that has to be dealt with whilst you have capacity. It can be done at any age, and is definitely something you can do early on.
Interviewer:
And that is something you can do for finances and health?
Donna Mahoney, Senior Manager, Tax team:
That's right yes.
Interviewer:
And you don't have to have the same attorneys do you? So we sometimes see that for finances, particularly if they're business owners, we have specialised attorneys appointed so it could be either a business partner, an accountant, or a solicitor. But with health it is often family members that are the preferred attorney in those situations.
Donna Mahoney, Senior Manager, Tax team:
That's right and that is one of the themes with estate planning, what you are doing has to be appropriate doesn't it. Who you have those close conversations and responsibility to has to be appropriate and you have to feel comfortable with it. There is no point, with power of attorney for example, appointing someone to deal with your finances if they are not financially up to it. There is definitely some thought to be put into that.
Part 5: Revising estate plans and overseas assets
In our fifth Life and Estate Planning video, Donna Mahoney discuses what you should bear in mind if you own assets overseas and are considering writing a Will in a different jurisdiction.
IAPA
Price Bailey is a committed member of IAPA, a global association of independent accountancy and business advisory firms that provide accounting, audit, tax advisory, and business consultancy services.
IAPA comprises of more than 200 member firms with offices in 70 countries. The international reach of our fellow IAPA member firms offers instant access to first-hand knowledge of local regulations, culture and customers.
If you are looking to write an overseas Will please contact us using the form below and we will be able to support you.
Transcript:
Interviewer:
"We often say that Wills and all plans should be revised regularly because of legislation changes, the people in your life coming and going, your circumstances changing, your finances changing, and therefore the decisions you are making should change accordingly."
Donna Mahoney, Senior Manager, Tax team:
"Some of the planning that you might do and the practical things that you want to do will change depending on whether you are in a couple, a widower or even a business owner.
If you have assets overseas, there is an added layer of complication there and more planning perhaps is needed with that.
Interviewer:
"We have found that clients have passed away with overseas property, and whilst it is a wonderful gift to leave, children have found it quite burdensome because they do not know where the property is or who is managing it or where the funds are held if it is rented out.
We do suggest if you have overseas assets, that you have a Will written in that jurisdiction too.
Certain countries will have forced heirship, which would trump and Will you have written. So it is important to know if you are writing a Will that it is a valid Will in your associated jurisdiction."
Part 6: Practical considerations for your estate
In our final Life and Estate Planning video, Donna Mahoney discusses all the important practical considerations that you should think about when making these key decisions.
From having somewhere safe to store your passwords, to talking to your family about your funeral preferences, and the difference between a Power of Attorney and an executor, we ensure that you are equipped with the knowledge to start planning effectively.
If you have a question regarding anything mentioned in the video, or would like support with your Life and Estate Planning, you can contact Donna using the form below.
Transcript
Interviewer:
"Clients often ask us if we have a checklist for end of life planning. Our main categories include finances, so Inheritance Tax (IHT) planning, keeping a list of assets and savings..."
Donna Mahoney, Senior Manager, Tax team:
"Yes, and passwords too. It's important that you do not just keep a list of these accounts but also how you access them too."
Interviewer:
"Much financial information is now held online, and often bank accounts are paperless. If you are not able to access their emails, you may be oblivious to bank accounts held and statements being sent electronically. It also helps the executor carry out a more efficient role when you pass away."
Donna Mahoney, Senior Manager, Tax team:
"Yes, and that will only help with the speed of getting probate which enable the executors to do their job and for the state to be administrated smoothly."
Interviewer:
What sort of documents might an executor need? What would be useful to you if you were doing probate?
Donna Mahoney, Senior Manager, Tax team:
A list of your financial assets, list of the gifts that you have made – that is one thing we are often talking to our clients about. The executors would be required to list all the gifts you have made in the last seven years.
Interviewer:
Could they keep that as a simple spreadsheet?
Donna Mahoney, Senior Manager, Tax team:
Yes, there does not need to be anything technical about this. Record the date, the amount, and who the gift has been given too. The executors will then be able to work with the advisers to look at exemptions.
Interviewer:
This is key, because when you have passed away it will be the executors that effectively take over your finances and distributing those in accordance with your Will.
People often ask how executors stand up against attorneys. But when you have a power of attorney that appointment passes away with you. So you have an attorney all the way up until you have passed away, and then after your death control effectively is handed over to the executor."
Donna Mahoney, Senior Manager, Tax team:
"They might be the same person. Their appointment is under different requirements and different responsibilities. One is for your lifetime and the executor is post-death."
Interviewer:
"Legally, the sort of documents that should be kept safe include Powers of Attorney, Wills, property deeds, and then the practical things like arranging a funeral, if you have any preferences, either express those in your Will or, or leave a letter for your loved ones. It is quite helpful, we have found, that if clients have been given some direction as there is an awful lot of decisions to be made when someone passes away."
Donna Mahoney, Senior Manager, Tax team:
"As you say, planning the funeral, there is so many questions. So any guidance that you think may be useful, or just having a discussion with your family in advance would be beneficial.
The other practical side of it is thinking about those other day-to-day life things. What is happening financially? Where is the money coming in? What needs to be paid out? Things like utility bills, they are not going to be cut off if somebody's not paid a bill.
Interviewer:
"Our advice is the earlier you plan, and the more through you put into your life and estate planning, then usually the cheaper and quicker the administration of the estate is."
Donna Mahoney, Senior Manager, Tax team:
"Yes, and the smoother for the family that are left too. If things are left in good order, and the family know who to talk too, whether it is an accountant, solicitor or financial adviser, then the smoother the process."
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