January 2024 Newsletter | Cylchlythyr Misol Ionawr 2024
At the start of the New Year, some individuals will be thinking that they have their financial affairs in order, whilst others will be thinking 'I really do need to sort this out'. We have come across some individuals who started the process of drafting their wills over 5 years ago, and they are still awaiting completion and signature!
- If you do not have an efficient, up to date will, your estate will be divided in accordance with the laws of intestacy which basically follows the bloodline. Unmarried partners may be left much poorer whilst family members will benefit whether you want them to or not.
Your family will be left with a mess to sort out, which is not a great legacy.
- Here is an example of what can happen if your financial affairs are not in order:
After a bitter divorce followed by a very happy second marriage, the husband did not update his pension “expression of wishes.” The husband died suddenly and the first divorced wife claimed the pension as she was still the nominated beneficiary. Ouch!
- If you have significant assets, you need to plan and at least be aware of your Inheritance Tax situation. If you plan early enough, you can make significant reductions in potential Inheritance Tax liabilities.
- The other important documents to arrange, especially for individuals who are at or over pensionable age, are financial and health power of attorneys which allow for your family / close friends to look after your affairs if you become incapacitated.
- Have you made a list of your financial assets and do your most trusted relatives / friends know where the list is kept? In the unfortunate event of early death / incapacity this will at least ensure that all of your assets are available to your estate.
This is especially important with the continued increase in the use of internet banking / online savings. Otherwise, your savings may become part of the billions of pounds of unclaimed assets lying dormant with the large financial institutions.
- Check that your savings accounts are paying an acceptable rate of interest – no excuses for leaving sums in low paying accounts given the rate rises in the last 18 months
- Check your National Insurance record and your State Pension forecast on the Gov.uk website to correct any errors now, before you retire.
Ask Huw and Aled: my son is purchasing a flat with his girlfriend. I will be gifting a sum of £50,000 to help with his deposit. His girlfriend will be contributing £20,000. What level of paperwork do we need and what can happen if the relationship later breaks up?
Ask the solicitor who is completing the conveyancing on the property to prepare a “Deed of Trust”. This will provide details of the differing contributions made by each party and will ensure that your higher contribution is taken into account if the relationship breaks up and the flat is then sold.
Happy New Year to you all / Blwyddyn Newydd Dda i chi gyd!
