Some of you may have seen the The Martin Lewis Money Show Live on Tuesday 21st November 2023 (Series 13, episode 4) focusing on the three D’s – Death, Divorce & Dementia and highlighting the importance of future-proofing your finances and assets . Chafes Hague Lambert are here to help you prepare financially in the event of any of the above.
Death
We all like to think that we are immortal, and making a Will often falls to the bottom of the ‘To-Do-List’. However, making sure that your intentions upon your death are written up in a Will really can make life a lot easier for those left behind.
Many people assume that without a Will, your husband, wife or civil partner will simply inherit your estate. This is not necessarily true. If you are married or in a civil partnership and have children your spouse/civil partner will inherit your personal possessions and the first £322,000 of your estate. The remainder will be shared as follows:
- The spouse/civil partner gets half of the remainder, and
- The other half is divided equally between the surviving children (or their own children in their place if they have died before you).
Only if you are married or in a civil partnership and have no children would your spouse or civil partner then inherit your whole estate.
The position is even more precarious for unmarried couples or those who co-habit. In England & Wales a ‘common law’ partner is not legally recognised. If you are unmarried or not in a formal civil partnership, your partner won’t inherit anything from your estate if you die without a valid Will. Therefore, if you want your partner to inherit any of your estate upon your death you need to make a valid will.
Many people believe that if they die without leaving a Will their family will just decide how to split their assets. This is not true. There are prescribed rules known as the ‘intestacy rules’ which would govern how your assets are left. If you have any children they would inherit the entirety of your estate. If you have no children your estate would be divided between family member’s in order of entitlement under the intestacy rules. If you die with no living direct relatives your estate passes to the Crown.
Don’t put off making your Will any longer, as it really is essential to ensure your wishes are followed upon your death.
Divorce
Going through a divorce or separation is one of the hardest times a person will face in their life. People do not tend to enter into either marriages or relationships thinking about divorce or separation, but sometimes it is useful to prepare your finances in such a way that if a divorce were to occur the process can be simplified, saving you both time and cost.
One way of protecting yourself when living with a partner is to have a Co-habitation Agreement, a document which lays out how outgoings will be shared between you and your partner, and how property and other assets will be divided if the relationship unfortunately comes to an end.
If you are thinking of marriage, a good way to ensure your finances are protected is to consider a pre-nuptial agreement, or pre-nup, which sets out arrangements for property, finances and other assets, including who will be responsible for each in the marriage, and how the same will be distributed in the event of a divorce.
Most of us have heard of pre-nups, especially in the world of the rich and famous but recently there has been a rise in the number of already married couples getting into post-nuptial agreements, post-nups,
A post-nup is different to a pre-nup as it is a legal agreement made between individuals who are already married and can be entered into at any time after the marriage has taken place.
Post-nup agreements are a legal agreement made between a married couple and will commonly include arrangements for the family homes, joint assets, pensions, debts and property given or inherited during the marriage, setting out how the property and assets and income will be divided if they later separate or divorce.
Dementia
As lives in the UK are extending and people live longer, diseases such as Dementia and Alzheimer’s are becoming more common. Many people assume that if they lost capacity then their family could make decisions on their behalf. This sadly is not the case. If you lose capacity the Local Authority and doctors will be responsible for making decisions in relation to your health, care and finances.
However, there is a simple solution to this – Lasting Power of Attorney (LPA’s)
A Lasting Power of Attorney nominates people to act as your attorneys and these people can make decisions on your behalf as if they were you. You can nominate whoever you like to act as attorneys, meaning family members and friends can make decisions in line with your wishes.
There are two types of Lasting Power of Attorney, one for your Property & Financial Affairs and one for your Health & Welfare. Both documents can be used by your nominated attorneys once you have lost capacity, but your Property and Financial Affairs LPA can also be used before capacity is lost, but only on your express consent. This can be helpful if you have poor mobility, are ill or the weather is bad and you cannot get out and about as normal.
To find out more about Wills or Lasting Power of Attorney please contact:
Hannah Mycock on 01663 743 344 at or click here to email her at our New Mills office
Samantha Ikin on 0161 747 7321 or click here to email her at our Urmston office
Shireen Shabestry on 01625 531 676 or click here to email her at our Wilmslow office
Or to find out more about Co-habitation Agreements, Pre-nup Agreements or Post-nup Agreements please contact Michelle Simpson on 01663 743 344 or click here to email her at our New Mills office