Deathbed planning: beware and be practical

Finding out that death is imminent is the ultimate wake-up call for some clients to update their wills. They find it helpful to be practical. And at this time ?of emotional turmoil, there ?may be a chance to give proactive advice.

First, do ensure you really listen to clients and their true concerns. As a profession, we are often better at talking than listening. In many cases, giving reassurance and peace of mind can be given, makes both life and death easier.

If a client has a medical condition with a likelihood of declining capacity, is there time to make and register with the Office of the Public Guardian either of the two forms of lasting powers of attorney (LPA)? Helping with decisions on property and financial affairs or health and welfare issues could help relieve concern.

Ensuring the will fully expresses up-to-date wishes is clearly a priority. Are the executors still the right people, given current relationships, or would adding an independent person, such as a solicitor, help? For the latter, it is worth asking the client to sign a note explaining the reasons, which can act as a protection against a request to renounce probate.

If the will provides a separate list of wishes about personal possessions, does that set out both an up-to-date list of items and guidance about the process of the beneficiaries choosing items not listed? This can help avoid unnecessary dispute.

Reviewing a will at such a time at least enables a client to take into account the very latest family circumstances, such as any beneficiaries having financial or marriage difficulties. Making a change so their inheritance is left in a trust, to protect capital as far as possible, can provide last-minute peace of mind. ?The difficult conversations we sometimes have, dealing ?with all the ‘what ifs’ can be ?a shortcut to focus on the ?right options.

Taxing questions

Is any tax planning worthwhile? Now that the value of the ?estate and the potential tax is more or less known, the value ?of a married couple (and civil partners) including a discretionary trust of the inheritance tax nil rate band (frozen at £325,000 for a further four years), is easier to see. If ?the combined estates ?exceed £650,000, this is ?certainly worthwhile.

Also, what is the effect of other assets outside the will’s scope, such as assets held as joint tenants, life cover written in trust, or death benefits nominated in favour of an individual or trust? If possible, show your client a complete picture of all the amounts that may be available after death and who gets what. This should include any trusts over which there is a flexible power – is a power of appointment needed or an up-to-date letter of wishes to guide the trustees about who should benefit after death?

There may be opportunities for last-minute tax planning, for example to use the capital gains tax (CGT) ‘uplift’ to clear out capital gains. A ‘healthy spouse’ could transfer assets with large gains to the ill spouse so they ?can be left via the will to the surviving partner free of CGT on death. The gift must be made with no strings attached and neither spouse can be bound to follow the other’s directions.

In light of Mehjoo v Harben Barker [2013] EWHC 1500 (QB), ensure that, for all tax planning issues, the person advising has the expertise to give the advice. Not all solicitors do.