Wills and Trust
As someone who cares deeply about the welfare of your family and friends, you will want to make sure that your money and possessions ("estate") are distributed as you would wish, when you die. Considering the following questions should help you to understand why ensuring you have a legally binding and up-to-date Will is so important.
- Do you expect your spouse to inherit all your property?
- Do you want to make special provisions for children, grandchildren or friends?
- If you have young children, wouldn't you feel safer having appointed a legal guardian in case something should happen to you and your spouse?
- Would you like advice about Inheritance Tax so that your family benefits and not the tax man?
- Wouldn't you want to appoint someone you know to be in charge of winding up your affairs?
- If you answer is "yes" to any of the above you need a properly drafted and current Will.
If you die without making a Will ("intestate"), your estate will be divided according to the law, regardless of your wishes.
Administering an estate is always complicated and dying intestate can add further stress to what is already a difficult time.
Safeguarding the future
Do you believe you are sensible and caring, preparing for the future and looking forward to it? Many people arrange a pension and have an up-to-date Will and life insurance to protect their dependents.
Despite this, often people don’t necessarily consider what might happen in the future if, because of absence, illness or incapacity, they were unable to manage their affairs, or what effect this would have on their family and loved ones. In these circumstances how would your family cope?
An individual who is legally authorised to act for another is called an Attorney and the document which gives them that authority is known as a Power of Attorney.
An Ordinary Power of Attorney
This is the power given to another person, if for example, you are the owner of a business going away on a business trip for several months, and need someone to ensure that your business runs smoothly and important decisions are taken in your absence. You can limit the scope of the Attorney to one specific legal duty, for example, signing a particular document, or you could allow a range of matters to be covered to enable your business to run smoothly until a specific date.
Lasting Powers of Attorney
Enduring Powers of Attorney
These cannot be made after 1 October 2007 but any made before that date are still valid and can be used whether or not they have been registered. Once the attorney believes the donor to be or to be becoming mentally incapable the attorney must register the power with the Office of the Public Guardian. However, the power can be used while the donor is still mentally capable and the power has not been registered – though obviously this will only be with the donor’s consent.
Lastings Powers of Attorney
These came into being on 1 October 2007 and can take one of two forms:
Lasting Power of Attorney – Property & Affairs (LPA-PA) – this is similar in effect to the EPA as it enables the donor to give an attorney power to deal with financial and legal matters eg. Signing cheques, selling a house, investing savings etc
Lasting Power of Attorney – Personal Welfare (LPA-PW) – this is entirely new and gives the attorney power to make decisions regarding the donor’s health and welfare eg. deciding where he should live and whom he should see, claiming benefits, consenting to medical procedures. It can also include a power to make decisions regarding life sustaining treatment.
Important points
Neither power can be used until it has been registered with the Office of the Public Guardian. This will involve a delay of at least six weeks.
In addition, an LPA-PW (Welfare) can only be used once the donor has become mentally incapable. However, an LPA-PA can contain a restriction ensuring that it too can only be used when the donor has become mentally incapable.
Making an LPA
Both powers are much more involved than previous documents. It is possible to download them free from the Office of the Public Guardian (OPG)’s web-site. It is also possible to buy relatively cheaply commercial packs containing these documents. The forms are all the same.
Wolferstans will prepare these documents for you though the cost will be higher than for an EPA because of the time involved in obtaining your instructions, explaining the consequences of any decisions made and ensuring that the document is valid and workable in practice. Because of some of the options that are available, it would be very easy for donors to tie themselves up in knots or to make the power totally unworkable.
We are currently charging on a time basis. Our estimate of the time involved is between 2 and 3 hours for preparation involving a cost of between £300 and £500 plus VAT. In addition there may be costs involved for a certificate provider. Registration, including giving the necessary notices, would involve further costs of between £100 and £150 plus VAT. The fees payable to the OPG on registration are currently £150 per LPA ie. £300 per person for a donor wishing to register an LPA (PA) and an LPA (PW).
The alternative is to hope that the situation never arises where you are incapable of making decisions for yourself or to rely on someone making an application to the Court of Protection either for a Deputy to be appointed to make decisions for you or for the Court to make specific decisions on your behalf. The procedure for this is even more complicated, slow and expensive. In addition to any legal fees that would be incurred (and whoever applied would almost certainly need legal advice) there are application fees of £400 per application (as at 1 October 2007) and £500 per hearing.
Some of the Decisions to be taken when making an LPA
Who are you going to appoint as your attorney?
Are you going to appoint more than one person?
If you appoint more than one person are they going to have to make all decisions together or can any one attorney make decisions on his own?
Are you going to have the same arrangements regarding decisions for all decisions or will it vary according to the type of decision involved? (BEWARE OF MAKING THINGS TOO COMPLICATED AS FINANCIAL INSTITUTIONS MAY REFUSE TO ACT ON THEM)
Do you wish to appoint a replacement attorney or attorneys if others cann0t or will not act? Is the replacement for a specific attorney or, merely, to fill the first vacancy?
Do you wish the LPA-PA (Assets) to be used before you become mentally incapable? This is often very useful particularly as you get older and may be unwell or not want to be bothered with dealing with your bills etc
Do you wish to impose restrictions on when, how and in relation to what decisions an attorney or a combination of attorneys, may act? For example, you could make it a condition that your attorneys submit accounts every year to a third party eg solicitor or accountant to be audited.
Do you wish to give guidance to your attorneys as to how decisions are to be reached? This would not be binding on them.
Whom do you wish to be notified when a power is to be registered? When EPAs are registered your next of kin will be notified automatically but you can choose up to 5 people to be notified of an application to register an LPA and only these people will be notified. You should discuss this with them in advance so that they are aware when they should consider objecting.
Whom do you wish to act as your certificate provider? This person will certify that you are capable of making an LPA. They will have to be either someone who has known you for at least two years (A Knowledge Based Certificate Provider) or someone falling into certain professional categories such as a doctor, social worker or solicitor (A Skills Based Certificate Provider). The Certificate Provider has to read through the LPA and then go through this with you, asking various questions, to establish that you understand its significance and are making it of your own free will. A Professional will charge for this service.
How we can help
To produce a Power of Attorney is a relatively straightforward task, however the rules and formalities which need to be complied with, can be daunting and the effects of a mistake can be devastating, which is why you should seek professional help. We can guide you through the procedures, prepare the necessary documentation and advise you on other aspects of your affairs so that you make the best possible provision for you and your family in the future.