This week’s podcast answers the question ‘what is meant by estate planning?’ with will and estate planner, Jayne Kelly.
Jayne, can you start with a brief introduction?
I’m a will writer and estate planner. I think will writing is fairly self explanatory but the estate planner side may be a little bit more unclear. By estate, what we mean is any of your possessions that you hold at your time of death.
You might think that you don’t have an estate, because people tend to think of that being something quite grand. But in fact it is everything you own: your possessions, any money held in bank accounts and property. This all forms part of your estate and needs to be disposed of upon your death.
You need to nominate somebody to do that for you which is part of the planning. We would help you nominate someone to take care of your estate, whether that be very large or very small. You won’t know how big it would be at the time of your death, obviously. But putting detail into it now will be so helpful for people that you leave behind.
What are the technical terms or jargon around products within estate planning?
An important one is ‘trust’, which can be quite complex depending on your estate. We also hear terms like ‘executors’, which is essentially somebody who is going to wrap up your estate, somebody that you trust.
‘Guardians’ are those who would take care of your children (while they’re minors) if you were not here to do that. ‘Beneficiaries’ are people who would benefit from your estate, who you would be leaving in your assets to.
These are some of the things that people would maybe not understand because they’ve had no reason to discuss things like this in the past. If there’s nobody to benefit from your estate, if there’s no family left and you haven’t made a will, it can actually end up being taken by the state. I’d much rather say where mine went.
Do protection payouts from life insurance and other products form part of your estate?
Absolutely. And these are things that people don’t often think about because, let’s face it, it isn’t a nice subject. But once you’ve got a will in place, we try to make this document last as long as possible.
And with life changes, there’s no way of knowing what your assets will be at the time you pass away. You could be in a worse financial position, you could be in a better position, you could have a windfall, you could have a payout from work or an insurance policy.
So you could potentially have a much larger estate than you realise. When you’re making a will, you might have just taken on a mortgage and you have little equity. In 40 years’ time, your house could be worth a lot more, your mortgage will be paid off and you have a substantial amount to leave. But even if you only have a few hundred pounds in your bank account, or you have a home with possessions that need to be taken care of, it’s about what you want to happen at the worst time.
What happens if I don’t make a will?
There are certain situations where not all family members get on. What if you don’t have any siblings, you don’t have any children, you haven’t spoken to your parents for years, yet they would potentially inherit your estate. When you’re gone, they would get everything and that isn’t something everyone is comfortable with.
Maybe your parents aren’t here, you don’t get along with your siblings – yet they would inherit your estate. At the family court, the biggest reason for claims is sideways disinheritance. Parents have split up, there’s children involved. Parents get new partners, perhaps remarry, they don’t have a will and their new partner inherits their estate. Their children from the first relationship don’t get anything. It’s not always done deliberately, it’s just through circumstance and not putting the correct provisions in place.
That can and does happen, but it’s easy to sort out in your lifetime. It prevents your family having to fight in court while grieving a loved one.
Can I just write my own will?
I’ve had a conversation with somebody recently where their dad decided to write their own will. It’s absolutely fine if you have the knowledge to do that. But I would choose to work with a professional who knows what they’re doing so there is no comeback.
This gentleman did write his own will, but there was some ambiguity in it and it left the family at a crossroads. They don’t know how to proceed and it’s very complicated to try and move forward, so they’re having to seek professional advice. They’re not really sure what to do, and it just prolongs the agony and heartache.
And again, in this scenario, people have fallen out, which is really sad because that wasn’t what the dad wanted. He thought he was doing the right thing, but had he got a professional to draft a will for not very much money, none of this trouble would have happened.
If you want to make sure that your estate, money and possessions go to the right people, there’s only one way to do that. You need a professional specialist who knows what they’re talking about. They will review it and then make sure that it’s kept up to date.
People’s lives change. After divorce and things like that, it’s really important to update your will. People do see it as a complicated thing to do, but it doesn’t take a lot of time. It is an easy document to put together, really.
How does appointing guardians work?
Putting guardians in place is naming somebody and handing over the legal rights to take care of your children if anything happened to you. It’s a standard part of a will if you have dependants. It’s about the small chance that something happened to both parents.
We travel together, and accidents do happen, sadly. If anything happened to us, we have guardians in place that would step in and take over the children. And we have checked that with them.
As an example, my brother works out of the country. If anything happened to us, our children could be taken into care while he travels home to look after them. Imagine your kids just lost their parents, they don’t know what’s going on and they’re going into care temporarily. That would just be horrific.
So every parent would surely want to prevent that from happening. Guardians, the second you weren’t here, have the same legal rights as you. They would take the kids in and carry on from there. I think that’s really important as a parent to get those guardians named and a legal document in place.
Summing up, then, why should we make a will?
It’s all about peace of mind – for the person going, but also those left behind. If you don’t have these things in place, you could leave an absolute mess behind for people to sort out.
They might make the wrong choices and, above all else, it’s just more pain for them. These people will be grieving you. You want to make it as easy as possible for them.
There’s a clear message here that this is something that needs to be sorted out and done in the right way with a professional. It’s not something that you can pick up off the shelf, so make sure it’s done the right way, professionally, to make sure you’ve got every angle covered and you’ve got that peace of mind.