
Seeing your family this Christmas? 5 estate planning issues you could discuss
Estate planning might not be the first thing on your mind when you think about your Christmas holiday.
Yet, the festive season often brings families together, making it an ideal occasion to talk about this sensitive and important topic.
What’s more, if you’re taking a break from the demands of everyday life, such as work and school, you may have more time and energy for discussions with your loved ones.
Being open about matters such as how you’d like your wealth to be passed on and your dependants cared for when you pass away, could ensure that your wishes are followed and your loved ones know what to expect.
So, here are five important estate planning issues to discuss with your family this Christmas.
1. Passing on your wealth fairly
While your family may not be able to contest your will just because they think it is unfair, such feelings could lead to stress and disagreements.
So, it’s important that you carefully consider how you’d like your wealth to be distributed after you pass away.
You may choose to leave all of your estate to your spouse, who can then pass this on to your children when the time comes.
If you do not have a surviving spouse, you might want to share your assets equally between your children. Or, it may seem fairer to give a larger portion to a child who has greater financial needs.
Of course, a division of assets that seems fair to you may not be seen in the same way by your loved ones, and ultimately, the decision is yours.
Either way, communicating your plans and explaining the rationale behind them could help to manage your family’s expectations and reduce the risk of arguments.
Additionally, in discussing your intentions with your children, you might learn something about their situations or aspirations that helps you decide how to make the distribution of your assets as fair as possible.
2. Your personal wishes
Your will is a legally binding document that sets out how you want your assets to be distributed after you pass away. Yet, you may wish to express more detailed personal wishes about how your estate should be divided.
To do so, you could have a “letter of wishes” drawn up to accompany your will. While this document is not legally binding, it can provide additional guidance for the executors administering your estate.
Unlike a will, which may become a public document under certain circumstances, a letter of wishes remains confidential and only accessible to your executors, trustees, and family. So, it can be a useful way to handle sensitive matters that require discretion.
For example, you might have specific wishes regarding provisions for your children from a previous relationship, or even your ex-partner. If you’re a business owner, you could also use a letter of wishes to provide information about business assets or company matters.
This helpful document could also allow you to guide trustees on how they should manage any wealth you leave in trust.
Talking through your personal wishes with your family over the festive season could ensure that they understand exactly how you’d like your will to be administered when the time comes.
3. Guardians for your children
If you have young children, choosing who you’d like to care for them after you’re gone is an important legal issue that needs to be made clear.
You can name a guardian or guardians in your will. This allows you to choose someone who you trust and believe would raise your children in a way that aligns with your values.
On the other hand, if you fail to appoint a guardian and your children are orphaned before they turn 18, the courts will choose someone who they deem to be an appropriate adult to fulfil the role.
So, appointing a guardian as soon as possible could provide valuable peace of mind that your children will be cared for as you’d like them to be, should the worst happen.
Talking to your chosen guardian or guardians could ensure that they are happy to take on this responsibility. You may also wish to discuss anything important to you about how your children are raised, such as your preferences for where they go to school.
Furthermore, it’s vital that you consider the financial aspects of guardianship. You might decide to set aside a portion of your estate for your chosen guardians, to cover the ongoing cost of raising your children.
Alternatively, you could take out appropriate life cover to ensure that your children are provided for. Wrapping this life insurance in a trust could protect your beneficiaries’ payout from Inheritance Tax (IHT), so your loved ones receive more of your wealth.
4. Your Lasting Power of Attorney
No one wants to think of themselves or their parents becoming unwell or losing the mental capacity to manage their wellbeing and finances.
However, preparing for this eventuality as a family could offer valuable protection in a difficult situation.
A Lasting Power of Attorney (LPA) allows you to name a trusted individual (or individuals) to manage your affairs if you become mentally incapable of doing so yourself.
If you don’t already have an LPA in place, this is a key estate planning topic to discuss over Christmas. Indeed, an LPA could be crucial for anyone.
At BMP Wealth, we have an international client base and can help you understand how to make such provisions in your country of residence.
5. Important practicalities
Estate planning often involves emotionally significant family conversations that touch on your core values and outlook on life.
However, remember to talk through the nuts and bolts too.
Some important information that your family needs to be aware of might include:
- Who the executor of your will is – This is the person or professional entity who is legally responsible for managing your estate. Your executor could be a family member or a corporation, such as a law firm.
- Where your will is kept – This can help to reduce stress, conflict and delays for your family when you pass away.
- Contact details for your financial adviser – To help your family manage the financial aspects of your estate as efficiently as possible.
At BMP Wealth, we form long-standing relationships with our clients and keep meticulous records. If you pass away, we can quickly provide the information and support your loved ones need to keep things moving smoothly.
We also have the international estate planning expertise to advise your beneficiaries about matters such as IHT.
So, sharing our contact details and talking to your family about your estate plan this Christmas could ensure the ongoing continuity of your financial plan.
Get in touch
To find out more about how we can help you and your family with all your estate planning needs, please get in touch.
Email info@bmpwealth.com or call +852 3975 2878.