Will and POAs?

paulstevo

About to complete will and POAs for health and wealth.

I'm married and retired(58) with 14 year old daughter . House is worth £300,000. Have retirement/growth fund with Prudential which is performing well and worth £1.2 Million which I'm drawing down on per month . Looking at changes in inheritance tax next April 2027, If I leave it all to my wife ,am I correct in saying she will incur no inheritance tax. Is there any value in leaving a portion of that to my daughter ? Also to remove any tax penalty. Thanks Paul

elsien

This seems to be purely a will question and not an LPA one, unless I’m missing anything?

poseidon1

I can see no IHT advantage leaving a portion of the pension fund to your daughter after the new IHT rules take effect in 2027.

All you would achieve by doing so is reducing the level of your own £325k nil rate band that would be available to your wife ( by transfer) when she eventually dies.

However, given your daughter is currently only 14, perhaps your thinking is more along the lines of there being a potential income tax advantage accruing to your daughter if she is a non tax payer at your death, and thereby able to draw tax free income from the fund at that time?

From that perspective and assuming your wife still retains sufficient resources to meet her own retirement needs, this idea maybe worthy of consideration whilst your daughter remains a minor and/or a zero rate tax payer. However this option does not concern your will, and would be achieved by changing your pension expression of wish letter.

When your daughter becomes an adult and perhaps a tax payer in her own right, you can then revisit your pension expression of wish to determine if it still makes sense for your daughter to directly inherit therefrom on your eventual death.

gwynlas

I cannot comment on the tax question but hopefully you have named someone to act as legal guardian should you and your wife die before she reached adulthood

Keep_pedalling

As you refer to her as your (rather than our) daughter is she from a previous relationship?

As you are quite a young retiree with a young child you might like consider term life insurance to cover an unfortunate early death which cover IHT if your wife also met an early demise.

Best thing though is to keep breathing and run the £I.5M down by having a nice retirement.

paulstevo

I am a young retiree , (retired at 55 I'm now 58) and my bad its our daughter :) .

I am and do plan to run the money down ,with the intention of having lots of nice holidays and experiences, also helping our daughter navigate her early years with financial help . I have an appointment with a will writer booked so will see what advice he gives us. I do want to tie everything up and POAs for health and wealth are also something I would like to complete .

Appreciate all the advice

elsien

don’t let them sell you doing the power of attorney as well. For people with straightforward affairs, they are very easy and much cheaper to do yourself.

Savvy_Sue

I'd suggest NOT using a will writer, but going to a local solicitor. Reason being that if it all goes wrong, the will writer may no longer be in business, does not have to have professional qualifications or be a member of a professional body. I'm sure there are a few good will-writers around, but definitely some who may not give you best advice, may want to upsell you various 'schemes' to 'protect' your money from various 'money-grabbing' organisations, and those schemes may complicate your estate greatly without actually doing what's intended.

paulstevo

Just question as per POAs via will writer , If the POAs are registered with the OPG then are they not legal and valid even if the will writer is no longer in business anyway?

elsien

yes, once registered it’s valid. Regardless of whether the will writer is in business or not. I

think the point was being made about wills though because by the time you look to enact them and realise there is an issue it could be a long time after they were written.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82136862#Comment_82136862

So despite @Savvy_sue's advice not to use a will writing firm rather than a qualified solicitor, you decided to do so anyway?

What are the professional qualifications of the will writer and what is the extent of any commercial PI insurance for potentially negligent advice?