Navigating the complexities of estate planning can be daunting, particularly if one wants one’s wealth to be passed on as intended.
In this article, Ed Lorman, Managing Partner of BM Estate Planning, discusses the critical aspects of bloodline planning and Lasting Powers of Attorney (LPAs), essential tools for safeguarding your family’s wealth and ensuring your personal wishes are respected during times of incapacity:
Bloodline Planning
Bloodline planning is more than just directing where your assets should go after you’re gone; it’s about ensuring that your wealth benefits the intended beneficiaries without unintended diversions. “The use of trusts in bloodline planning,” Ed explains, “ can be a useful means of creating a protective barrier that helps your assets stay within the family line, shielding them from claims by creditors or ex-spouses or ex-partners.”
This strategy is crucial for maintaining control over where your wealth goes, providing not just financial security but also peace of mind for generations.
A selection of bloodline planning tips from Ed:
- Document Your Intentions: Clearly outline how you want your assets to be distributed among your heirs. This involves creating a will and potentially a trust that specifies your wishes.
- Use Trusts Wisely: Establishing trusts within your will can help protect your assets from future family disputes, long term care fees, divorce settlements, creditors, or bankruptcy proceedings affecting your descendants.
- Review Regularly: Update your estate plan regularly, especially after significant life events like marriage, divorce, birth of a child, or death in the family to ensure it reflects your current wishes.
- Consider Life Insurance: Life insurance can be a strategic part of bloodline planning, providing immediate financial support to your family after your passing, and can be structured to pay directly into a trust.
- Communicate with Your Family: We recommend that you discuss your estate planning goals and decisions with your family to manage expectations and reduce conflicts after your passing.
Lasting Powers of Attorney
LPAs allow you to appoint someone you trust (family and/or friends) to manage your affairs if you become unable to do so yourself. This can cover financial decisions, such as managing investments, mortgages, shares or selling property, and personal welfare decisions, including healthcare and living arrangements. Setting up LPAs ensures that your affairs remain in trusted hands, reducing the burden on your family during difficult times.
Ed explains the dual function of LPAs: “Assets can be severely restricted if the owner loses their mental capacity. Not only can LPAs cover financial decisions, but they also extend to personal welfare decisions, such as healthcare and living arrangements. Setting up LPAs ensures that your affairs remain in trusted hands, reducing the worries of your family during difficult times.”
He advises that choosing the right person(s) to act as your attorney is critical: “It’s about more than trust, it’s about aligning with someone who understands your values and decision-making processes.”
Here are his tips for Lasting Powers of Attorney (LPAs):
- Choose Wisely: Carefully select whom you want to act as your attorney, as this person will make decisions on your behalf. Consider their trustworthiness, reliability, availability and ability to handle matters responsibly.
- Be Specific: Clearly define what powers your attorney will have and consider setting limits if necessary. You can empower multiple attorneys to act together on some matters and can appoint different attorneys for financial decisions and health care decisions.
- Get Professional Advice: Consult with an estate planning expert to ensure that your LPAs are set up correctly and reflect your wishes accurately.
- Register Your LPAs: An LPA must be registered with the Office of the Public Guardian to be effective. Ensure this is done well before the LPA might be needed.
- Review and Update: Regularly review your LPAs as circumstances change to ensure that they continue to meet your needs and that your appointed attorneys are still the right choice.
At Beavis Morgan, we specialise in providing personalised advice and robust planning services, including tailored bloodline planning structures such as wills, trusts, and LPAs. Our team of experts will guide you through the complexities of setting up these structures, ensuring your estate is managed according to your wishes and your family’s future is secure. Our experts can join up this planning with colleagues in tax in order to reduce the erosion of wealth through inheritance tax and for which there are a number of planning initiatives.
For those interested in learning more about bloodline planning and LPAs, we offer detailed resources and guidance on our BM Estate Planning website. You can also watch a brief 3-minute video that summarises these topics in depth here.
Reviewing any existing will should be part of your to-do list. If you are considering implementing these strategies or need advice on adjusting your existing plans, don’t hesitate to contact us. Our experts are here to help you ensure that your legacy and well-being are protected. In the first instance, please contact your usual Beavis Morgan relationship partner or Ed Lorman.
Edward Lorman
T: 0773 2732 481 | E. edward.lorman@bmestateplanning.com
edward.lorman@bmestateplanning.com