Creating a legal safeguard for your future is one of the most important things you can do – both in terms of your own wishes, and those of your loved ones. For anyone who does not hold an in-depth understanding of the legal requirements, however, it can be difficult to grasp what needs to be done and, more importantly, how it should be done to ensure that you or your loved ones do not run into any issues or complications in the future.
Here are five common legal pitfalls for anyone planning for the future, and how to avoid them.
1. Not making a will
A properly drafted will offers the only reassurance that your wishes will be met, and that your loved ones will stand to inherit your assets in the way that you intend. Without one, your estate will be subject to the laws of intestacy. In essence, this means that the law will take an objective approach toward the division of your assets, and it could be the case that only your closest relatives – your spouse, children, or grandchildren – would stand to inherit anything from you.
Unmarried partners, or those not in a civil partnership – as well as friends and relations by marriage – could all be excluded from inheriting anything by the laws of intestacy.
Making a will offers you the opportunity to protect your loved ones, and to ensure that you can continue to look after them after your passing.
2. Making a will that is invalid
While making a will is one of the most important things you can do, any mistakes or oversights can be just as costly as not having one at all. A will must meet a number of strict criteria in order to be deemed valid.
Clerical errors (which are common in ‘DIY’ wills not completed with the help of a qualified lawyer) can invalidate a will. Similarly, if it is found that you were not mentally fit at the time of writing – or that the will was forged or coerced in some way – then there could be grounds for others to challenge it.
Contesting a will can be a long and emotionally taxing process for those you leave behind, so it is important to make sure your will is not valid.
3. Not working on your prenup with a lawyer
Much like a will, pre-nuptial agreements help to ensure that your assets are safeguarded in the event that something goes wrong – but it can be tempting to ignore or disregard the importance of these documents in favour of believing that the worst will not happen.
A pre-nuptial agreement creates a guide for the division of your assets if you and your partner choose to divorce, ensuring clarity under difficult circumstances.
It is important to note that these agreements are not legally binding, but that they will be considered – and hold some authority – in the Family Courts in England and Wales.
4. Failing to plan for the future of your business
Inheritance tax planning, appointing a lasting power of attorney, and creating trusts with the help of a lawyer will all help to ensure proper provision for your family and your business should something happen. Whether you pass away unexpectedly, or lose the capacity to make the decisions yourself, then having a firm plan in place for the future of your business will help to ensure continuity, clarity and financial security for your loved ones, and the business itself.
Your lawyers can also help you to work out what will happen to your shares, and who will inherit them or the proceeds of your business if it were sold.
5. Not keeping your affairs up to date
It is vital that we all have these safeguards in place for the future, but it is also incredibly important that we revisit these documents as and when our circumstances change. An out of date will, for instance, could mean that your assets stand to be inherited by an individual who no longer plays a significant role in your life.
Working with a lawyer and making the right provisions for yourself, your business, and your loved ones is essential, but it is also incredibly important that you remember to revise these documents to reflect your wishes as and when they change.