A serious illness diagnosis is extremely difficult for you and your family. It can be easy to forget the practical aspects of what may lie ahead. However, estate planning and sorting out your affairs gives you and your family peace of mind and time to focus on more important things.
Here are five things to think about:
1. Do I have a will?
It is vitally important to have an up-to-date will in place in case the worst happens.
A will allows you to:
• specify who will inherit your assets,
• appoint executors of your choosing to take control of your estate after your death, and
• express your wishes for the funeral.
A will can also help ensure payment of tax on your death is minimised, a crucial element of estate planning.
Putting a will in place (or updating it) will give those left behind comfort that your wishes are being followed. It also helps to avoid disputes.
Make sure close family members, and particularly your executors, know you have a will and know where the original document is kept.
2. Do I have a power of attorney?
Granting a power of attorney allows you to appoint someone you trust to make decisions on your behalf in the event that you are still alive but can’t manage your own affairs.
It’s important to grant a power of attorney as early as possible to avoid any dispute about your capacity to grant it. Once the power of attorney has been signed and registered, it can be set to one side and will only become effective if it is required. Think of it as an insurance policy.
If you lost the capacity to act without having been granted a power of attorney and decisions had to be made about your property, finances or welfare, family or friends may have to apply to the court for a guardianship order. This is a lengthy, complicated and expensive process — best avoided, if possible!
You may be interested in our blog post Do I Need a Power of Attorney?
3. Can estate planning help me save tax?
Could you minimise the tax payable on your death? This would maximise the estate you leave to your family, friends or chosen charities.
Tax planning can include:
• making use of the allowances you have,
• gifting assets to friends or family, or
• investing in suitable financial products.
4. Do I have a living will?
A living will seeks to give or refuse consent to future medical or other health-care treatment. It is not a will in the conventional sense, as it is used during your lifetime. It doesn’t deal with any of your items of property, so won’t have an effect on estate planning. It’s still well worth thinking about while you’re sorting out your paperwork.
There’s no legal authority about whether living wills are binding in Scotland. However, cases and legislation in the rest of the UK suggest these documents are an accepted way for patients to provide their views in advance.
5. Do I have a list of my assets?
A list would be very helpful for your executors or attorneys in the event of your death or incapacity. It should include details of all accounts, policies and reference numbers, with approximate values. This will stop any assets from being missed and make things easier for whoever is appointed to deal with your affairs.
In this age of technology, it can also be useful to discuss your digital assets with close family members. (See also the Guardian’s recent article “What happens to our data when we die”.)
Our team of Personal Law solicitors in Edinburgh and Glasgow are happy to talk to you about estate planning – please contact us for a chat.