Published: 29 May 2015
Some people may not know but last week was "Dying Matters Awareness Week". This was intended to bring to people’s attention the emotionally difficult raft of issues raised where a person who may not have long to live, might want to put his or her affairs in order.
This includes some legal issues and in particular whether a person should make a Lasting Power of Attorney or a Will or both?
What is a Lasting Power of Attorney?
This is a document designed to enable a person to appoint someone who is close to him but who is also honest and trustworthy to handle affairs on his behalf. Nowadays there are two kinds of Lasting Power of Attorney namely a "Property and Financial Affairs" Lasting Power of Attorney and a "Health and Welfare" Lasting Power of Attorney. These as their names suggest will enable a person to lawfully appoint another to handle his property and finances and, quite separately, his health and welfare issues, even if the person making the appointment later becomes mentally incapacitated. If put in place properly it will often help greatly when dealing with, for example, banks, government departments or medical staff.
The procedure for making and registering these kinds of Power of Attorney is carefully set out and overseen by the Office for the Public Guardian whose role among many other things is to try to prevent the incidence of fraud. This helps to protect vulnerable people in this situation.
The prescribed forms are not straightforward and the procedure time consuming but if handled correctly Lasting Powers of Attorney can be of great benefit to elderly and vulnerable people and their families.
What is a Will?
A Will is a document which sets out who is to inherit a person’s property and money in the event of death.
Does it matter if you do not make a Will?
It may not matter if you do not make a will, particularly where the value of what is called your "Estate" is very small and those you leave behind all get along with one another. However, all too often this is not the case and it is advisable to set out clearly in a Will who should be entitled to what.
Where there is no Will the division of money and property is determined by the "Intestacy Rules." This is a rigid set of rules laid down by statute. Generally speaking they will give first priority on what is left after paying off debts, including any Inheritance Tax, to a surviving husband or wife. However if there is no surviving spouse the Estate will pass to any children equally.
But what if you do not want to benefit your children equally? Perhaps because you have fallen out with one of them or because one of them may have special circumstances? Special circumstances may for example be where a family member is disabled or cannot be trusted with money. Here the Intestacy Rules may not allow you to achieve what you intend.
Sometimes in conjunction with the making of a Will it is advisable for a person to consider the effect of Inheritance Tax and how this might affect him and his family. Other considerations might be where either the assets involved or the family circumstances or both are not straightforward. Examples of this are where there is a family company or business or where there is a second marriage. Here a Will can clearly set out what a person would like to achieve.
So, there is a lot to think about.
However it must be remembered that if a person does not have the requisite mental capacity he will not be able to validly execute either a Lasting Power of Attorney or a Will. If this is the case different procedures will apply.
For more detailed and specific advice and assistance in relation to the above please contact Howard Sykes, Solicitor in our private client team. For advice and assistance with making your will please contact Howard Sykes or Maria Parker.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.