Wills & Powers of Attorney
Two in three people in the UK die without making a will, often creating financial problems and emotional stress for the family and friends left behind. If you die without a will, you will have lost the opportunity to decide who benefits from your estate - the law decides. You may be unpleasantly surprised to learn that when a married person dies without a will the surviving spouse does not automatically inherit their estate. The rise in divorce rates and those living together unmarried also complicates matters - the surviving partner could be left penniless, as could children from an earlier marriage. If you do not have a family, your estate will pass to the Crown rather than friends or charities. A will can also reduce or extinguish any liability to inheritance tax. We recommend that all our clients make a will - and review them when circumstances change. We do not prepare wills ourselves as we believe that the relatively modest cost of having a will drawn up by an experienced professional firm of solicitors is money well spent - for you and your family.
There are convincing arguments for all adults to set up a Power of Attorney - not just the elderly or infirm - as none of us know if we will suffer an accident or sudden illness. By establishing this while you are able, you retain full authority and power over your finances. However, if you became mentally incapacitated at a later date, the Power of Attorney would enable people that you know and trust - such as your family or your legal representatives - to look after your affairs. Without such powers, your affairs would be managed through the Court of Protection - which could be problematic and costly.
We understand that the system of "Enduring Powers of Attorney" (EPA) will be replaced by "Lasting Powers of Attorney" (LPA) from 1 October 2007, and there will be some considerable differences under the new system. An EPA allows you to appoint someone of your own choice - called an Attorney- to manage your finances. Although the power can be used immediately if you want, the main benefit is that it allows a smooth takeover if you lose mental capacity.
The new lasting power of attorney (LPA) will allow you to appoint an Attorney to make decisions about your health and welfare as well as your finances. You will be able to appoint different Attorneys for these different purposes, and will be able to limit the powers of each Attorney to specific situations.
There are other differences between the old EPAs andthe new LPAs. An LPA can only be used after a person has lost mental capacity rather than immediately. A certificate of capacity will be needed for the LPA stating that the person was mentally capable at the time he or she signed the LPA, which may sometimes be difficult to judge.
If you are thinking of making an EPA or LPA, you should obtain clear legal advice. Above all, you should think very carefully about who would be the best person- or people - to manage your affairs as an Attorney. Existing EPAs will remain valid after October 2007. If you have one, you may wish to review its terms to see if it should be changed to an LPA. If you do not have an EPA you may want to consider setting one up before the new rules are introduced, since many lawyers believe that the old regime has certain advantages, particularly regarding cost.
If you do not already have a solicitor to draw up a Will or Power of Attorney, we would be pleased to recommend one.
Please contact us for more information, or return to our services page.