The End-of-Life documents to get in order now

Whilst people have a tendency to avoid the topic of death where possible, most of us are aware of the importance of preparing a valid will. However, we may not have considered how documents such as ‘proof of ownership’ for our house or car, or an Inheritance Tax (IHT) 400 form to record any IHT gifts, could make the process for our heirs and executors significantly more straightforward.

With even relatively simple estates, it can take a year or more to gather the assets within an estate, value them and calculate elements such as the IHT due. Therefore, any legislation that can give executors more time, such as the extension to the IHT payment deadline, that is currently being debated in the House of Lords, would very much be welcomed. The additional six months being discussed would take pressure off individuals who are grieving and, in most respects, doing their best under difficult circumstances.

With the usual complexities of administrating an estate, combined with numerous shifting legislations, it is more important than ever to ensure that you are managing and recording your financial affairs and assets in a way that will make it easier for your executors when you die. After all, they are, in most cases of course, your closest loved ones.

Below is a snapshot of the key End-of-Life documents to prepare now, in order to avoid confusion for your loved ones, what role they play and any potential costs involved.

Wills

Every person should have one of these. It is possible to create your own will as long as it is witnessed by two independent individuals. There is no prescribed legal form, however, a solicitor or professional will writer should be engaged. 

A simple will is inexpensive to draft, however, considering the issues that arise if an individual dies intestate, it is money well spent. 

You can find more information about the importance of writing a will here.

Pension expression of wish form

An up-to-date expression of wish is critical because it guides pension trustees on who should receive death benefits, helping ensure payments are made quickly and in line with the member’s intentions.

When collating death documents, confirming the latest expression of wish reduces uncertainty, limits the risk of disputes or delays, and supports the trustee’s discretionary decision-making. Without it, trustees may still exercise discretion, but the process is often slower and more likely to produce outcomes the deceased would not have intended.

Letter of instruction

Letters of wishes are often included with wills, however, they are not legally binding on the executors. In reality, within a loving family, the testator’s wishes will be honoured if at all possible.

Although it is wise to get advice on a letter of wishes from a professional, it is best if the letter of wishes is written by the testator as it is a personal document. There is unlikely to be a separate cost relating to the advice regarding a letter of wishes.

Power of attorney form, if you have one

A lasting power of attorney is becoming increasingly important as the population ages, as it allows attorneys to make health and financial decisions for individuals who may be losing physical and mental capacity. 

These important documents should be prepared by a solicitor for which there will be a charge.

An IHT 400 form to record IHT gifts

All gifts made during an individual’s lifetime should be recorded on form IHT 407, a part of the IHT 400 form. This will assist the executors in preparing the IHT 400 form after the individual’s death by taking into account gifts made within the seven years before death. 

It can be very difficult to track gifts if not detailed at the time they are made, requiring a lot of research and analysis. The form can be downloaded from the HMRC website, can be filled out by any individual and there should be no charge attached. You can read more about effectively transferring family wealth, such as gifts, here.

Proof of ownership – for your house, your car, investments and other assets

• For your house – Proof of legal title of a house is held at the Land Registry and copies can be obtained at a minimal cost. If the house is subject to a trust, there will have been a trust deed prepared at the time of settlement, which should be stored alongside the owner’s will.
• For your car – The V5 document should be kept safely. DVLA will provide copies at no charge and investment houses provide annual statements without charge. Both should be kept safely.

Bank and savings accounts and login information

Seven years of bank statements should be retained for seven years if paper copies. Banks will provide statements to account holders or attorneys at no cost on request.

Marriage or divorce documents

Again, these documents should be kept with the will. Copies can be obtained at a minimal cost by anyone since they are public documents. All these important documents should be kept together in a secure and safe place where attorneys/executors know where to find them which will make the process much easier upon their death.

An issue that has arisen in the last couple of decades, is the storing of passwords for important logins to online accounts. Clearly, multiple people should not know these passwords, however, there is now secure password storage software which could be useful, or a file could be lodged with a solicitor so that all passwords may be revealed on death.

Details of pensions and life insurance

Documents pertaining to pensions and life insurance should be retained and kept with the individual’s will. Pension providers and life assurance companies should provide these documents on request by policy holders or attorneys.

How can our team help?

Every individual’s estate planning needs are unique, and we understand that your priorities are personal.

Our Estate Planning services are tailored to your specific circumstances. With our guidance, you can ensure that your assets are protected, your wishes are honoured, and your loved ones are taken care of, without facing unnecessary tax liabilities.

We’re always available to answer your questions, no matter how small or sensitive they may be. If you need advice, please contact an expert member of our team today.