At PK Partnership we believe that everybody should have a current Will and personal insurance to ensure that their family is protected should the worst eventuate. It is a sobering thought to find research in the UK which suggests that more than half of the population do not have a valid Will.
Six reasons people procrastinate when it comes to protecting against the unexpected
1. They think ‘it won’t happen to me’
2. They don’t like to think about death
3. They assume everything will pass to their spouse or next of kin
4. They don’t know who to ask to be an Executor or Guardian for their children
5. They don’t want to talk about death with their partner
6. They view the cost for advice or protection as too expensive
Imagine what could happen to your family
Without a Will or life insurance your family could be left bereft and have their world turned upside down as they grapple with how to manage without a financial safety net. Rather than finding themselves in a comfortable financial position from your legacy, such as your home and life insurance, they could end up struggling based on the laws of intestacy.
In England and Wales, the laws of intestacy state that if your estate is valued at more than £250,000 then your spouse or civil partner will keep all of the assets (including property) up to £250,000, and all the personal possessions, whatever their value. The remainder of the estate will be shared as follows:
» Your spouse or civil partner gets a life interest in half of the remainder
» The other half is then divided equally between the surviving children
» If a son or daughter has already died, their children will inherit in their parent’s place
Note that the inheritance taxman will also take a cut of 40% on any amount above the threshold of £325,000 (in the 2014/15 tax year) or 36% if the estate qualifies for a reduced rate as a result of a charitable donation. This could mean that, aside from the immediate tax loss on your estate:
» Your widow will have limited means to live off, so your family’s assumed future will have to change
» Your family will face uncertainty as to how to fund private schooling or university
» Your children will have absolute right to income and capital from their Trusts at age 18 – often not an ideal situation
What can you do?
Working with a financial planner and insurance specialist like PK Partnership can help you to look at your personal circumstances and create a plan that focuses on risk, probability and impact of death. Working alongside other professionals you will then be offered easy to understand, robust and cost efficient solutions tailored to suit your needs.
We realise that life can never stand still, so we encourage you to review your protection policies and Will regularly to take into account changes in your circumstances and those of your family.
For an obligation free review of your finances and protection policies, please contact a member of the PK Partnership team.