Pensions and Life Insurance

Almost certainly your Will will not control the proceeds of your pension plan.

Instead the proceeds will be distributed at the discretion of the Pension Fund Trustees. They will act in the light of an Expression of Wish, or Nomination, which you may have filled in over a cup of tea years ago.

That seemingly trivial piece of paper may be disposing of more money than you own personally. So, your advisor should provide you with the opportunity of ensuring that the Expression of Wish matches your Will.

At the same time he should arrange matters so as to minimise the risk that the assets will eventually be caught by the Tax Man or by Social Services.

Similar applies to life insurance but often the policies are not "in trust". Consequently the assets may accumulate in the estate of the policyholder for tax purposes. That should be rectified if at all possible.

House ownership

A couple owning a house usually do so as "Joint Tenants". That means that if one of them dies the entire house would be owned by the survivor, regardless of any Will.

That's fine, provided:

•  The survivor would not then have a large taxable estate

•  The couple are not in the process of separating or there is no other reason why the partner should not control how your life's savings are passed on. (E.g. because of children by a previous marriage).

So, your adviser should check and, if necessary, "sever" the Joint Tenancy in favour of "Tenants in Common in Equal Shares". You could then allow your partner to occupy the house and buy another with the proceeds of sale. But, after his or her death, "your half" would be held for your beneficiaries.

Marriage, civil partnerships, separation and divorce

Marriage revokes a Will, unless the Will contains a special "expectation of marriage" clause. So, if you have a Will and are contemplating marriage you should make a new Will before the event containing the expectation of marriage clause. Failure there would lead to the original beneficiaries, e.g. your children by a previous marriage, losing a great deal if you should die of excitement on the honeymoon.

Civil partnerships have the same effect as marriage.

Living with a partner when not married does not create the presumption that you are married. So, without Wills, if one of you died the surviving partner will inherit nothing unless he or she manages to claim under the provisions for family and dependants legislation.

If you are separating, but not yet divorced then you should make a new Will immediately. Failure there may lead to the once loved now hated husband or wife taking the major share.

Divorce does not revoke a Will. Instead the Will would be interpreted as though the divorced husband or wife had died. Nevertheless the Wills should be updated since, in the absence of children, the Wills may assign half the estate to her relatives and half to his.

Separation and divorce

If you are married but separating then you should make a new Will (or your first Will) immediately. That is because; if you go under a bus tomorrow the once loved husband or wife will probably take everything regardless of the personal circumstances.

Once you are divorced any existing Will would be interpreted as though the Ex had died. Nevertheless you should replace that Will since almost certainly it includes the partner's relatives parents brothers and sisters.

The same would apply, but possibly with more force, if you are not married but are drifting apart from your partner.

Separately from that, the matter should be arranged so that:

•  The Trustees may settle "out of Court" should your "Ex" claim against your estate, so reducing legal costs

•  Maintenance payments do not destroy an estate otherwise intended for a new partner.

Loss of mental capacity

If your partner lost capacity (mental capacity that is) due to a car accident or old age, how would you sell the house?

The answer is - with great difficulty since the partner's signature would be required but not available.

An Enduring Power of Attorney would solve that. You would then be able to sell the house with your signature plus the signature of one of the other Attorneys e.g. a son or daughter or brother or sister of the person who had lost capacity. You would also be able to deal easily with all the partner's other financial affairs.

If a parent of yours lost capacity an Enduring Power would be a godsend at a time when life would be difficult enough without the burden of dealing with the Public Guardianship Office.

Hence your advisor should discuss the need for an Enduring Power with you along with a range of conditions designed to increase both flexibility and security.

(Options include powers of delegation and nomination - useful if you have a significant share portfolio - and a requirement that there should be at least two Attorneys acting jointly in the larger transactions).

Life support

An Advance Directive would minimise the risk that you would be kept alive on life support, unable to communicate when there is no realistic hope.

If, in such a circumstance, you would indeed very much prefer to be kept comfortable but allowed to slip away then an Advance Directive would be a comfort to you, to all about you and to the doctors.

Call us today for a free appointment on 01604 455073 or fill in our enquiry form.