Getting Your Personal Affairs In Order

Monday 27 April 2020

Written by Paul Dell

Getting Your Personal Affairs In Order

We are in strange unprecedented times at the moment and with no real exit strategy for the current crisis. One of the things you could look at during this time is ensuring that your personal affairs are in order and well planned

We have very sadly had cases of clients falling victim to this dreadful virus and it brings home more than ever that we need to ensure our personal affairs are in order. Unfortunately, we tend to devote so little time to this as we are all so busy in our lives.

So, as we can’t get out and play golf, go and watch football or pursue the other leisure activities we all love to do, perhaps it’s the opportune moment to set aside some time to making sure our personal affairs are in order.

Below are a few points to consider that you may find as a useful aide memoire:-

1. Wills

Make sure your Will is up to date and if you don’t have one make it a priority to put one in place. This can make the life of your loved ones so much easier in dealing with the estate administration. Without a Will in place, the rules of intestacy apply which may not put assets where you necessary want them to go and it may also be very tax inefficient in terms of the reliefs and exemptions available.

2. Power of Attorney

Sometimes referred to as a “living will”. A Power of Attorney (POA) deals with the situation where you are unable to look after your own affairs. Without a POA in place, should you become incapacitated, your loved ones will need to apply to the Court of Protection to take charge of your affairs which can be time consuming and costly. So, as well as getting your Wills sorted, sort out your POA’s as well. There are 2 types of POA :- Health and Welfare; Finance and Property and you should put both in place.

3. Life Assurance

Many people have life assurance policies in place to protect their loved ones in the event of death. This could be to cover a mortgage amount on the main residence, an amount to cover other financial liabilities or just a lump sum to provide for loved ones in the event of the unthinkable happening.

One very important point with life assurance policies is that they need to be written in trust. This ensures that the life company can pay out policy proceeds on death without the need for Probate etc. and also ensures that the value of the policy does not form part of the estate and potentially liable to Inheritance tax (IHT), which could in certain circumstances reduce the policy proceeds by 40%.

So, check out any policies you have and make sure they are written in trust.

And if you are a business owner, consider relevant life policies rather than individual life policies as your company can pay the premiums and there is no Benefit in Kind charge that applies. Advice is needed for such policies (usually via an Independent Financial Adviser) so talk to us if you need assistance on such matters and our joint venture wealth management partners will be pleased to help.

4. Pension Nomination forms

Most Personal Pension Plans operate under what’s known as a Master Trust (of the pension provider) and this keeps the plan outside of the clutches of HMRC from an Inheritance Tax point of view.

One thing often overlooked or not regularly updated is the Nomination Form within the Pension Plan that tells the Pension Trustees who your nominated beneficiaries are in the event of death.

If there is no nominated beneficiary within the Plan the Pension Trustees have to make the decision as to whom any policy proceeds are to be paid – this can be a long-winded process at a time when dependents may be in urgent need of cash.

We have also had cases of where the ex-spouse is still the nominated beneficiary on a pension policy despite the couple having divorced many, many years earlier!

So, take some time to check your pension policies to ensure the nominated beneficiaries are in place and that they represent your current wishes.

5. State Pension entitlement

There have been many changes to state pension entitlement over the past 10 years as successive Governments battle to work out ways to make them affordable in the many years to come.

The basic state pension is set at £175 per week for the 2020-21 tax year. To qualify for the full basic state pension, an individual must have 35 “qualifying years” during their working life. Those individuals that have less than 35 qualifying years (subject to a minimum of 10 years) get a scaled down basic pension entitlement.

Qualifying years are built up generally through the payment (or crediting) of national insurance contributions.

So check out your National Insurance Record to ensure it appear to be correct and also request a state pension forecast so you at least have an idea of what this could be at state retirement age. This can be done online at the website

6. Personal Balance Sheet

An excellent way of keeping track of your personal assets and liabilities is to prepare a Personal Balance Sheet. This brings together details of all your asset (bank accounts; ISA’s; share portfolios; other investments; property etc); as well as your liabilities (mortgages, HP finance; credit card debt; other loans etc.)

This not only helps you track your wealth as you update it each year but also pulls everything into on place to assist your loved ones should the unthinkable happen.

It’s also a good place to log life policy and pension policy details

So take the opportunity during the lockdown to take a look at your personal affairs and take action on any gaps etc so you are well placed for the future and know that you have everything under control and all the boxed ticked off!

Written by Paul Dell - Partner

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