Why it is important to have a Will
If you own assets you should also have a Will to provide for how you wish those assets to be distributed on your death.
A Will allows you to:
Make sure your wishes are followed;
Name guardians to look after your children;
Write off debts which are owed to you when you die, such as a loan to children or family members;
Set up trusts for your children to ensure they are provided for;
Estate plan and reduce the amount of inheritance tax that may be payable on your estate;
Appoint executors of your Will who are responsible for sorting out your estate when you die;
State your funeral wishes such as whether you would like to be buried or cremated.
If you do not have a Will you will not be able to choose who inherits your assets and instead this will be decided by the rules of intestacy. These rules limit who can inherit your assets to spouses/civil partners and some other closely linked relatives but does not provide for cohabitees, step-children, friends or charities. This can be problematic, for example depending on how a cohabiting couple own their home, the surviving cohabitee may not automatically inherit the deceased cohabitee’s share in the home.
If you already have a Will – why you might need to renew it.
You should review your Will periodically, but there may be certain life events that occur which means it is a good idea to review and update your Will including:
Marriage (as this normally cancels your Will);
Separation or divorce;
Moving house (this could cause problems with the clause in your Will which deals with who is to inherit your property);
Someone you named to inherit in your Will, or someone named as an executor, dies;
You have a child or grandchild and want them to inherit from your estate;
A significant financial change in the value of your assets.
LPAs – what are they?
LPAs are Lasting Powers of Attorney. These are legal documents in which you appoint one or more people to look after your affairs. There are two types, one for property and financial affairs and one for health and welfare. The chosen person(s) can then make decisions such as dealing with your bills and bank accounts or deciding on your medical care.
An LPA for property and financial affairs can be used at any time with your consent. This could include buying and selling property, paying a mortgage, paying bills, managing a bank account or making investments. You can choose what decisions the chosen person(s) can make on your behalf.
An LPA for health and welfare decisions can only be used once you have lost capacity to make your own decisions. It is a good idea to put this in place now so that if at any point you lose capacity in the future the chosen person(s) can make decisions about where you should live, your medical care and your daily routine.
Why LPAs are not just for the elderly
If you would like someone to deal with your affairs for you, such as selling your property, or something happens to you and it becomes necessary for someone to take control of your health and welfare, then it is much easier if you already have an LPA in place.
You should not assume that just because you are married or live with someone that they will be able to deal with your financial and property affairs or make healthcare decisions for you as without an LPA they are unlikely to have the authority to do this.
If you do lose capacity to make your own decisions at some point and you do not have an LPA, it is likely there will be a lengthy and expensive process to put a Deputyship in place and this will involve applying to the court. It is often a good idea to think of all eventualities and make plans well in advance.
Sykes Anderson Perry can advise on and draft your Will and advise on whether signing an LPA could be a good option for you.