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Safeguarding your family’s future

So, that’s the October holidays over, the clocks went back at the weekend, and once the kids have climbed down from the sugar rush of Halloween and bonfire night, we can enjoy a normal routine and a bit of a lull before the run up to Christmas.  This is a good opportunity to turn your attention to those things you keep putting off, and to think about safeguarding your family’s future.
Who should you think about?
If you have young children, think about who would become involved in their care if the worst were to happen to you. As part of your will you can name the people you trust to be guardians for your children.  Have a discussion about this, though, and make sure it’s the right choice.  Grandparents may be an obvious choice, but are they actually best placed to look after young children? Would aunts, uncles or perhaps a close family friend be more appropriate?  In all cases, the children’s best interests are paramount and the court will make a final decision but clear expressions of the parents’ wishes and intentions would be taken into account.
While you are drawing up your will, there are other safeguards you can put in place – if young children might end up inheriting significant sums or assets, you can stipulate that this is held in trust for their benefit until they reach a certain age.  Without this, young beneficiaries inherit outright at age 16 and most parents, in our experience, tend to agree that this is too young.  18, 21 or 25 are often chosen instead.
The funds held in trust are not simply locked away, the trustees can make payments out as and when they feel it is appropriate. Day to day maintenance, school fees, holidays, sports, music lessons and so on can all be paid for.  The trustees may also use funds to help with accommodation costs or to buy a property in the children’s names.
Outside your will, but often of significant value, if you are in paid employment your employer may have ‘death in service’ benefits which would pay out in the event of your death.  These benefits can pay out a lump sum of up to four times your annual salary, so it’s worth taking a little time to check this and keep your details updated.  The sums are paid directly to beneficiaries, they do not form part of your estate so are not dealt with in accordance with your will (and do not form part of the value of your estate for inheritance tax purposes). 
So who will benefit? 
The trustees of the scheme have complete discretion, but you can nominate beneficiaries and this will act as clear guidance to the trustees.  If you have a trust for young children set up in your will, you can nominate that funds are paid into the trust.  Speak to your HR department or pension provider about this, make sure you complete the nomination forms and keep them up to date.
At the same time as sorting out your will, you can put additional protections in place in case anything happens to you which means you are not able to manage your own affairs or make decisions for yourself.  A bit like a personal insurance policy, a power of attorney authorises someone you trust to manage your finances, access your bank account, deal with your property, and, if you have lost capacity, to look after your personal welfare, medical treatment, care packages, accommodation and so on.  This is not something that’s just for older people, everyone should have one.  Mental health issues do not only affect older people, neither do strokes, heart conditions or other progressive and debilitating diseases. 
The key to a valid power of attorney is that you must put it in place while you are in good health, otherwise it may be too late.  If you don’t have this in place and you do need someone to act for you, a court action would have to be raised to appoint a guardian instead.  This is a lengthy, stressful process which is easily avoided by appointing attorneys instead.
Tick another thing off your list – take a little time now to put these important safeguards in place.  It’s a weight off your mind when you know you’ve done all you can to protect your family.
Contact us for advice
Our team of solicitors is here to advise you on your individual and family circumstances.
Contact us on 0131 200 1200 to get started.