Each year thousands of well meaning people create heartache for themselves and their families at the same time as throwing away large amounts of money unnecessarily. Yet a few simple New Year resolutions could provide peace of mind for you and your loved ones.

New Year Resolution: make a will or bring your existing will up to date

Consider the example of former dental nurse Cyd Negus. She met businessman Henry Bahouse in 1995 and they planned to marry. He promised to provide for her but he suffered from depression and took his own life in 2005.

In the midst of her grief Ms Negus then received another blow, for it turned out that Mr Bahouse had not updated his will to include her. All his estate went to the children of his first marriage and she was left with nothing.

Ms Negus had no choice but to take legal action. The judge ruled in her favour saying that she had effectively been Mr Bahouse’s wife in all but name and he had intended to provide for her. She was awarded more than £600,000 with the rest of the £3m estate going to Mr Bahouse’s family.

It could be said that justice was done in the end but consider the two years of stress, heartache, time and money involved with two sides of a family pitted against each other in court at a time when they are all still grieving for someone they loved.

Yet it could all have been avoided if Mr Bahouse had only got round to the simple task of updating his will. If people don’t make a will then their estate will be divided up along rules laid down by law. It means large sums money may go to members of the family you wouldn’t choose to leave anything to and some could end up with the taxman.

New Year Resolution: consider a living together agreement

Most people will have read about the acrimonious divorce proceedings between Sir Paul McCartney and Heather Mills. She reportedly offered him the chance to draw up a pre-nuptial agreement when they married but he declined on the basis that it seemed a little cold and unromantic.

Pre-nups are often associated with celebrities but they are becoming more widespread as people accept that marriages do often fail and in those circumstances, anything that can reduce the legal wrangling over money has to be worth exploring. Pre-nups aren’t legally binding in this country but they are still helpful as the courts will take them into account as long as they are fair to both sides.

People who co-habit should also consider making legal arrangements because they are far more vulnerable than married couples. Many people believe they have a common law marriage which provides them with legal rights but this is not the case. Women are particularly at risk as they could find themselves living with a man for years, contributing to household expenses and then be left with nothing when the relationship breaks up because everything is in their partner’s name.

New Year Resolution: consider Lasting Powers of Attorney

Many people had not even heard of powers of attorney until they became the theme of a powerful storyline featuring the character Mike Baldwin in Coronation Street. The family squabbles depicted may have been fictitious but they will have been all too real for thousands of people throughout the country.

The Baldwin character was suffering from a debilitating mental illness which meant he could no longer properly control his business affairs.  

Such situations can be avoided in real life if you appoint someone now to act as your attorney should failing health ever prevent you being able to make decisions for yourself. The law has just been modified to improve the system with the introduction of Lasting Powers of Attorney. They allow you give someone authority to run your business affairs if the need arises and also to make decisions on your behalf about what medical treatment you should receive. This can even extend to deciding whether or not a life-support machine should be switched off.

There are safeguards to prevent the system being abused so you can prepare for the possibility of ill health secure in the knowledge that you can leave important decisions in the hands of someone you trust. If you don’t have such arrangements in place then your family may have to go through complicated and time-consuming legal processes just to get the authority to help run your affairs for you. That is the last thing they want at a time when they will already be worried about you and your failing health.