Wills and legacies must be arranged: Saga

Wills and legacies must be arranged: Saga

Advisers must help clients review their wills and legacies, in the light of research from Saga Legal Services finding that some banks have failed to recognise a lasting power of attorney.

Emma Myers, probate and lifetime planning head at Saga Legal Services, said: “It is concerning that people sometimes struggle to use their power of attorney, whether through a lack of training or faults in policy. The issue needs addressing.”

According to the legal services provider, banks were among the financial institutions failing to recognise a lasting power of attorney.

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Research commissioned by Saga in July 2014 revealed that only 10 per cent of people had arranged a power of attorney. The issue has been further exacerbated as many people had made an enduring power of attorney, which, having been replaced in 2007, was less familiar.

However even those with LPAs have difficulties due to a lack of understanding on the part of the industry.

“An LPA must be immediately accepted by a financial institution, and senior executives need to investigate this problem further,” Ms Myers warned.

In an age in which people increasingly manage their lives online, those with unplanned digital legacies also are at risk. According to Saga’s research, 87 per cent of people have no such plan, and 59 per cent said they would not know how to settle the digital affairs of a deceased loved one.

With little relevant legislation currently in existence, people aged 35 to 49 faced losing up to an average of £333 in digital assets from their estate with no provision in place, according to Saga, who also warned that money or credit held in online accounts could also disappear.

“In the same way you create a will for your physical possessions, it is crucial to do so for your digital assets,” Ms Myers added.

Adviser View

In a newsletter to clients, London-based Swallow Financial Planning warned clients not to rely on altering their wills to mitigate tax.

The newsletter said: “It seems too many people have been varying wills after death in order to save tax. Legislation will be brought in to curb the use of deeds of variation.

“The desire to protect an estate from the nursing home fees of the surviving spouse means that many should consider changing their wills to create trusts on first death which at least stand a chance of holding back capital to add to local authority minimum payments, rather than fund the entire cost.

“If you gift your entire estate to your spouse, now may be a good time to review same. Joint tenancy of property may also need to be broken in order to protect at least half of the asset.”