Once the immediate Christmas festivities are over and you’ve watched everything Christmassy on TV, played Twister and Charades and have time to relax, it could be a good time, whilst your family is all around you, to “look to the future” – as the song says – and talk to them about your plans, including lasting powers of attorney and making a will.  It is not a morbid discussion; you are showing your friends and family that you are thinking about them and want to help secure their future. You are ensuring that they understand what you want – how you want decisions to be made if and when you can’t make them, who you want to look after any children if you die before they are 18, which charities you want to support, what you want to happen at your funeral – and even what you want to happen to your pet – so there won’t be any disputes when the time comes.

Post COVID, many of us are still unsure about what the future holds and want to make plans that will make life easier for our families should something happen to us.  Many people believe that if something happens to them, for example, they have an accident or start suffering from dementia, their spouse, partner or children will automatically be able to manage their affairs.  Unfortunately, that is not true.  Only those named as your attorneys in a lasting power of attorney (LPA), which must be put in place whilst you have the mental capacity to do so,  have the legal right to deal with your affairs.  Without an LPA, someone would need to apply to the Court of Protection to be appointed as your deputy, and this can take a while to put in place and be expensive.

A property and affairs LPA gives your attorney the authority to deal with issues such as bank and other financial accounts, buying and selling property, claiming, receiving and using benefits on your behalf, paying taxes and making gifts on your behalf.

A health and welfare LPA gives your attorneys the right to make decisions on issues such as where you should live and with whom, your day-to-day care, medical treatment, access to your personal information, community care, social and leisure services, education or training and personal correspondence.

Planning for the future also involves making your will, and what better gift could you give to your family at Christmas than letting them know that your estate is all sorted? Around 50% of people do not have a will.  That is half of the adult population in the UK who do not know what will happen to their estate if they die. If you die intestate, that is without having made a will, the law will decide what will happen to your estate – not you.  Intestacy rules are strict and often don’t reflect an individual’s wishes.  Your family could be left devastated and even homeless if you don’t have a will, particularly if you are unmarried or not in a civil partnership.

One element of estate planning that can help you to reduce your inheritance tax (IHT) is giving gifts. Christmas is an ideal time for this – but make sure you take advice and follow the rules. Stay within your lifetime gift allowance and the seven-year rule to avoid IHT being clawed back later.  However, as you can also give as many gifts of up to £250 as you like without it being subject to IHT, you can, for example, give children or grandchildren £250 this year and give them the same next year and every other year after that if you wish to.

Graysons can help, and whatever plans you decide you wish to put in place for the future, for now, we hope you enjoy a very Merry Christmas and a prosperous and peaceful New Year. Contact our experts or find out more on our website.

Author: Laura Cowan, head of Graysons’ private client team.