Phil Appleby

World Alzheimer’s Month and LPAs: Making your wishes clear

/ , , Solicitor | Director | Trust and Estate Practitioner/ /by

September is World Alzheimer’s Month, an international campaign run by Alzheimer’s Disease International, (ADI) to raise awareness and challenge stigma surrounding Alzheimer’s and dementia. As trained Dementia Friends, our team here at Cullimore Dutton are proud to support this campaign and are pleased to share these things to consider when creating an LPA.

We understand that if you are considering creating an LPA and giving Power of Attorney to a loved one, that you may feel a little overwhelmed. There are many considerations, including choosing someone you trust to carry out your wishes and conduct your affairs as you would want. Choosing the right attorney, and making your wishes clear to them, is an essential part of the Power of Attorney process and can help you move forward in your life with confidence. In this article, we look at how to approach the discussion and how to ensure your wishes are clearly communicated when giving Power of Attorney.

Addressing your concerns about giving Power of Attorney
Creating a Power of Attorney is essential for planning for the future. Unfortunately, life is unpredictable, and in the future, you may need someone to make decisions for you and carry out actions on your behalf should you lose the capacity to do so for yourself. A Power of Attorney is designed to provide peace of mind, but we understand that you may still be apprehensive. What if your attorney doesn’t know what to do? What if they do not follow your instructions? Concerns about Power of Attorney are very normal, and there are steps you can take to make the process straightforward for your attorney, providing them with clarity about their role.

Choosing the right person to be your attorney
Most people have an idea about who they wish to be their attorney, but it is still important to consider your choice carefully. You should trust the person you choose to follow your wishes and have the common sense to manage your financial affairs and care confidently. You can also appoint more than one attorney. For example, you may have someone in mind who would be better at arranging everyday care and another who is better with financial decisions.

Discussing your wishes
We would recommend raising the issue with your family and loved ones before you make your Power of Attorney. They can then work with you to choose the best person for the role. They may raise concerns or issues that you had not considered. Discussing the Power of Attorney with your loved ones is also an opportunity to clarify your wishes. You should discuss both financial matters and care matters. Care matters may be where you would like to live, what you like to eat or the clothes you like to wear.

Setting out clearly how you would like your affairs to be managed
To give you additional peace of mind, you can also set out your wishes in a document known as an advanced statement. An advanced statement allows you to set out clear, written instructions. You may wish to include any wishes, preferences, values and beliefs about your future day-to-day care and medical care.

Why use us to help you create your power of attorney?
We are specialists in this area of law and all our team are either qualified members or working towards membership of STEP (Society of Trust and Estate Practitioners).

We are experienced with more than 70 years’ of helping, supporting, and advising clients on their Wills, LPAs, Trusts, Tax and Estates.

We understand the importance of delivering a considerate and approachable service when dealing with sensitive matters at what can often be a difficult time.

What our clients have said…
“Thank you so much for all your assistance with this matter. We really appreciate all the advice, time and help which you have given us – and your patience! You have helped to make a difficult task much less onerous.”
Cullimore Dutton Wills & Probate client

“We’d like to express our thanks for the way that you have professionally and sympathetically handled this on our behalf, and we wish you well for the future.”
Cullimore Dutton Wills & Probate client

If you would like a free initial consultation to discuss creating a Power of Attorney with one of our specialist Wills & Probate team, simply click on the “Speak to our Experts” button, call 01244 729 071 or email info@cullimoredutton.co.uk

Free to attend seminar: Protecting you and your family’s financial future
Join us for this free to attend seminar and hear how current market conditions can affect your financial future and how an LPA can provide financial protections. For more information visit: www.cullimoredutton.co.uk/protecting-seminar. To register simply email events@cullimoredutton.co.uk.

Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.

Phil Appleby

Inheritance tax threshold frozen until 2026 – but why is IHT planning still important?

/ , , Director and Associate Solicitor TEP/ /by

If you intend to leave savings, property or other assets to family or friends after you die, you need to consider inheritance tax (IHT).

It could cost your heirs up to 40% of their inheritance. By planning ahead, you can minimise IHT and ensure as much of your estate as possible reaches your loved ones.

Understanding the tax-free allowance  
The tax-free inheritance allowance, known as the nil-rate band, allows your beneficiaries to inherit up to £325,000 of your estate without incurring tax. On anything above this threshold, the standard 40% inheritance tax rate applies.

If you are leaving property to certain family members, the residence nil-rate band may also apply. This is an additional tax-free allowance that you can use if you pass on a property that you have lived in to your direct descendants, for instance, your child or grandchild. Currently, the residence nil-rate band stands at £175,000.

Inheritance tax threshold frozen until 2026
Whilst the nil-rate band has remained the same since 2010/11, the main residence nil-rate band usually rises each year with inflation. The next increase was due this April, however, it was announced in the 2021 budget that the IHT thresholds would be frozen until 2026. A five-year freeze is significant in IHT planning, and it is advisable to review your situation in light of this announcement.

Planning for IHT 
Most of us want the wealth we have accumulated over our lifetime to be put to good use by those we leave it to. Sadly, when end-of-life financial plans are not put in place, a large portion of assets can be diverted away from the intended recipients. However, with careful preparation, you can ensure as much as possible of your estate reaches your loved ones. As IHT planning can be complex, it is best to seek professional advice.

There are many steps you can take when IHT planning, including:

Pool your allowance with your spouse or civil partner
Spouses and civil partners usually inherit tax-free from their partner. Additionally, they can often make use of the nil-rate allowances their partner was entitled to.

If your spouse or civil partner left their entire estate to you, you could apply both your own and your partner’s tax-free allowances when you pass on your estate. Doing so effectively doubles the amount you can leave your heirs without incurring any tax. If your partner uses a proportion of their nil-rate band to leave assets to others, then you will only be able to apply the percentage of the allowance they did not use.

Make a gift to loved ones 
Gifting money or other assets before you die can reduce how much inheritance tax will be due on your estate. However, this must be done carefully as the timing of any gift is crucial. If it is made seven or more years before your death, the recipient will not usually have to pay any IHT on it. If you die within seven years of making the gift, IHT may be incurred. It will depend on the type and value of the gift.

Leave money to charity
To encourage charitable donations, assets left to a qualifying charitable body are exempt from IHT. Moreover, if you leave at least 10% of the value of your estate that surpasses the nil-rate bands to charity, you can reduce the IHT rate due on the remainder from 40% to 36%.

For more information about Inheritance tax planning, contact a member of our expert Wills, Trusts & Estates team on on 01244 356 789 or email info@cullimoredutton.co.uk

Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.