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The key legal documents you need to protect yourself in every area of life

On behalf of Attwaters Jameson Hill posted in Private Wealth on Saturday, March 2nd, 2024

In this blog, we take you through the documentation you need and some of the things you need to think about the give yourself and your loved ones every advantage in life. You may think that these things only apply to older people, or maybe that you will never need them. Sadly, it is not until somebody we love dies without a Will or loses mental capacity that we truly understand the importance of planning for every legal eventuality.

Drafting your Will

If you die without a Will, there are specific laws in place to determine who should receive your money, assets and property. The trouble is, intestacy laws are highly inflexible and there is absolutely no guarantee that the people the law designates as your beneficiaries are the people you would have chosen to inherit.

This is why it is very important to have a Will in place, to ensure your wishes are fully respected and your loved ones looked after your death. And, despite the prevalence of online, ‘DIY’ Wills, we would strongly advocate that you instruct an experienced solicitor to ensure your Will is properly drafted. Any mistakes or omissions might be costly for your executor to sort out or even invalidate your Will.

If your Will is outdated, it can have just as negative an impact as having no Will at all, so it is always a good idea to redraft it in the presence of a solicitor as and when your life circumstances change.

Ensuring your wishes are respected

Nobody ever imagines that they might lose the ability to look after themselves one day, but the sad truth is that anybody could suffer from a health condition or accident that renders them incapable of making decisions for themselves.

A Lasting Power of Attorney is a document that enables you to nominate somebody – your ‘deputy’ – to take care of your affairs should you ever lose the mental capacity to do so yourself. However, an LPA must be made whilst you still retain capacity – so the sooner you set one up, the better.

If you lose mental capacity without an LPA in place, it can be very difficult for your family and friends to get control of your affairs. They will have to apply to the Court of Protection to become your deputy, which can be a lengthy and stressful process. Even in the simplest of cases, it can take at least six months, during which time your loved ones will have no right to access your accounts or look after your affairs.

There are other protections available to ensure your wishes are respected should you lose capacity. ‘Living Wills’, also known as advance decisions, are legally binding documents that can help ensure your medical wishes are respected if you are unable to make decisions for yourself. For example, you can use an advance decision to refuse cardiopulmonary resuscitation (CPR) or artificial feeding if you become unwell. An advance statement, whilst not legally binding, allows you to record your preferences regarding your care and daily routine should you not be able to express them yourself.

Protecting your interests

When you have worked hard to build up your wealth and assets, then it is natural to want to ensure that your interests in those assets are protected – especially when you are sharing your life with another person.

Prenuptial agreements and cohabitation agreements can both be used to determine how your money, property and assets should be divided upon divorce or separation. Whilst prenuptial agreements in particular have a poor reputation as unromantic ‘gold-digger’ repellents, they are simply legal planning tools like any other.

In modern relationships, it is more likely than ever that spouses-to-be will both have assets built up after marriage that they’d like to ringfence in the event – however unlikely – of divorce or separation. For example, one of the spouses might have an inheritance left to them before marriage, whilst another might want to protect their interests in the business they have worked hard to build.

Cohabitation agreements, also known as ‘living together agreements’, offer vital protections for unmarried couples that the law does not currently provide. Without a cohabitation agreement, one or both of the partners could find themselves in a situation of significant financial vulnerability, with no entitlement to the other partner’s money, assets or even the home they live in.

Meanwhile, a deed of trust can ensure that your interests in a property are protected if you co-own it with another person. For example, if you have paid more towards the deposit or the mortgage during your relationship, a deed of trust will record this to ensure that you get out what you put in in the event of a relationship breakdown.

Keeping your assets safe for future generations

Mitigating your various tax liabilities, keeping assets in trust and making lifetime gifts are all ways of preserving your legacy for the benefit of future generations – otherwise known as estate planning. Together with your Will, estate planning can ensure that your family and business are protected for the future, even after you are no longer around.

Tax mitigation strategies are methods that can be used to legally reduce the amount of tax you pay. They include using your tax-free allowances and tax reliefs, lifetime gifting, charitable donations and trusts.

A trust is a legal instrument that is used to hold assets – including cash, property, shares and land – until a specific time or until a specific event has taken place. The responsibility for holding the assets is given to an individual or group of people called the trustee, who must comply with all the terms and conditions laid out in the trust deed. They can be extremely tax advantageous and can be used for a wide range of purposes.

Safeguarding your business for the future

When you have worked hard to build up your business, it is difficult to imagine stepping back and letting somebody else take the reins. So much so, that over a third (37%) of businesses surveyed by Charles Stanley in 2023 admitted they did not have a succession plan in place.

A good succession plan can ensure that your business wealth can be passed down the generations successfully without compromising.

Another way of ensuring that your business is fully protected is instructing a solicitor to professionally draft your business contracts and legal documentation. Poorly written contracts – or worse, verbal agreements – can cause ambiguity and lead to business disputes that can expose your business to high levels of risk.

Properly drafted contracts and documentation, prepared by a specialist solicitor, can ensure that there are no misunderstandings between the parties and that your contracts include protections against adverse situations and scenarios.

Look after everything under one roof

Life is busy, with so many different priorities to juggle. We at Attwaters Jameson Hill understand this. As a full-service law firm, we can take care of all our clients’ legal needs under one roof. Should you wish to discuss the legal protections that may be appropriate to you, our specialist teams are on hand to help.

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