Your thoughts on what constitutes a ‘family’ might be quite personal – for some people their partner is all the family they need, for others it’s their siblings, while for most people a true family probably begins with the birth of your first child.
Whatever you consider to be your ‘family’, there are steps you can take to make sure they are kept safe, no matter what might happen to you in the future.
LPAs are probably one of the least well-known tools to protect your family’s interests, but in essence they are a kind of ‘living will’ to make sure your wishes are still respected if you are alive but incapacitated in some way.
There is a document known formally as a ‘living will’, which is generally used to express your desires for future medical treatment if, for example, you suffer from a cognitive degenerative condition that will render you unable to make such decisions in the years to come.
An LPA is similar, but does not necessarily have to relate to medical treatment; it might involve general welfare arrangements, or give somebody the power to control your finances and property on your behalf.
Turning to trusts, these are another way to transfer ownership of property or money, and put it into a structure that ensures certain beneficiaries receive an income from it in the years to come.
Assets transferred into a trust will typically not be part of your estate anymore, which means when you die they may not incur any inheritance tax; for this reason, trusts are often used as a way to make your estate more tax-efficient, especially if you are nearing the end of your life and want to maximise your dependants’ inheritance.
You will need to appoint a trustee, who cannot be among the beneficiaries of the trust, and the structures can be quite complex – so consult a solicitor for sure if you think you might need a trust.
Finally (in every respect), your will is your last chance to express your wishes for the division of your assets after your death – literally your ‘last testament’ on this Earth, so make it count.
If you have a reasonable size of estate, or if you own any property or high-value goods of any kind, it’s probably a good idea to have a will to avoid falling into intestacy laws, which will carve up your estate according to fixed rules.
But wills can’t say just anything – there are still certain inescapable laws that apply – so again, it is wise to consult a solicitor to make sure your testament is binding, rather than risk a write-your-own-will pack and the possibility of being treated as intestate anyway.
Ultimately, there are several ways to make sure your finances are treated how you want them to be, whether you are incapacitated by illness or injury during your life, or once you die.
No matter who you think of as your family, any one of the above might help to safeguard them in the years to come; and you could find a combination of two or three of the above works best to totally wrap up your estate in a protective legal shield.