Mental and physical incapacity can unfortunately happen to anyone at any time. Wills and Lasting Powers of Attorney can ensure things then happen the way YOU want them to.
12 August 2019
The importance of a will
At its simplest, writing a will is the best way to ensure your assets go to who you want them to. No one knows what’s around the corner, so to avoid dying without a will (intestate), it’s sensible to make one sooner rather than later. Here are just some of the benefits.
Non-financial benefits of a will
• Reassurance that your estate will go to the people and causes you care about.
• Avoids costly and damaging disputes – arguments over wills can split families and be expensive to resolve.
• Your spouse, children and other loved ones are provided for.
• Your assets stay within the family.
• Most importantly, for those with young families, you can direct who you would like to become guardians of your minor children.
Remember, dying without a will means that your assets are divided according to the rules of intestacy, which will mean that unmarried partners get nothing (unless you jointly own assets).
Financial benefits of a will
• Can be used to set up a trust for children within the family.
• Can be used to mitigate inheritance tax (IHT).
• Can save your loved-ones money – intestacy can be costly.
• If you run a business, it can be a key part of your succession plan.
Deeds of variation can enable you to change a person’s will after death, which can help to reduce tax liability or provide an opportunity to move the deceased’s assets into a trust – but it’s always better to get it right first time.
What is a Lasting Power of Attorney?
Just as a will enables you to control what happens to your assets after death, a Lasting Power of Attorney (LPA) is a legal document that enables you to control who can make decisions on your behalf if you can’t make them for yourself. LPAs are only valid in England and Wales.
You must be over 18 and have mental capacity, ie the ability to make your own decisions, when you make your LPA. There are two different types of LPA: one covers property and financial decisions, while the other focuses on medical and welfare decisions.
The former can be split to deal with personal finances, and to appoint people to deal with your business separately.
Why you need an LPA
Many people believe LPAs are only for the elderly, however, a period of incapacity can affect anyone at any time. An LPA ensures that your financial affairs and business can continue if a situation arises where you cannot make decisions.
To offer some practical examples – if you had an accident and were in a coma, without an LPA no one would be able to operate your bank account to pay bills. If you were selling your house, no one would be able to sign any paperwork to complete the transaction. If you were also a business owner, decisions key to your business operations may stall.
Making an LPA
Making an LPA isn’t complicated but it’s important to take care that it does exactly what you want it to do. It must also be signed in the correct way and in the right order by all those involved. These rules minimise the chances of any challenge to the LPA at a later date.
If you want to know more about making a will or LPA, please get in touch.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary, if you would like advice or further information, please speak to your usual Shipleys contact.
Copyright © Shipleys LLP 2019