Happy New Year
Posted on 20th January 2023 at 11:03
As we start the year, many of us have new year’s resolutions or a list of things we want to achieve in the coming year or even a list of countries we want to visit now that we have been out of lockdown for some time. Have you thought about making one of those new year’s resolutions to put documentation in place to protect your estate and your loved ones?
Let’s look at what documentation you can put in place to protect your estate.
Will
A Will is an important legal document which enables the person making the Will (otherwise known as the testator), to specify how they would like their belongings (assets, chattels and property) to be distributed on their death.
A Will enables you to do the following: -
Appoint executors to handle your estate and distribute assets on your death
Appoint guardians to look after any minor children you may have (children under the age of 18)
Make money gifts to family members, friends or even charities
Specify for certain items to be gifted to a beneficiary i.e., a family heirloom or even a piece of jewellery
Specify funeral arrangements
Gift properties
Exclude people from benefiting under your Will i.e. estranged children
Make provisions for any pets you may have
Include various trusts
Specify how your estate should be distributed and who to
Do IHT planning
If you don’t put provisions in place during your lifetime and die without making a Will, the laws of intestacy will govern how your estate will be distributed which means your estate could go to someone you would not have chosen to distribute it to. Aside from this, inheritance tax may be payable too.
There is also a common misconception that those who are unmarried and have been in a relationship for a long time will benefit from their partner’s estate on death. Unfortunately, this is not the case and we have seen this happen all too often.
Once you have made your Will, it’s important that you review it at least every 3-5 years or when there is a change in your personal circumstances i.e., marriage or the birth of any children. Did you know marriage can revoke a Will?
Lasting Powers of Attorney
A Lasting Power of Attorney (LPA) is a legal document which allows a person (called the donor) to appoint someone they know and trust to make decisions on their behalf should they become unable to do so in the future. This person is called an attorney and they must always act in the best interest of the donor. An LPA can only be created if you have mental capacity.
There are 2 types of LPA: –
Health and Welfare
Property and Financial Affairs
Property and Financial Affairs
Day-to-day decisions such as exercise and dietary requirements
Medical care
Life-sustaining treatment
Relocation into a care home or sheltered accommodation
A Health and Welfare LPA can only be used once it has been registered with the Office of Public Guardian (OPG) and when the donor loses mental capacity.
Health and Welfare
Managing bank accounts
Paying bills
Collecting income and benefits
Making decisions regarding the home
Selling the home
Managing investments
It is important to note that Property and Financial Affairs LPA can be used as soon as it has been registered with the OPG. The LPA may state that it can only be used when the donor has lost mental capacity so the attorneys will need to check and may also be required to provide evidence of the donor’s loss of capacity before using the LPA.
Appointing an Attorney
You would need to think about who you would appoint as your attorney(s). It needs to be someone who you fully trust to look after your affairs and act in your best interest. Normally 1-4 attorneys can be appointed. Attorneys can act either: –
Jointly – attorneys must agree unanimously on every decision;
Jointly and severally – attorneys can make decisions on their own or together; or
Jointly for some and jointly and severally for other decisions – attorneys must agree unanimously on some decisions but can make others on their own.
For more information on these types of LPA visit here.
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