In light of the recent coronavirus outbreak, I have received several concerned calls from clients in relation to steps that they should be taking. I am not the alarmist type, and so have stressed the need to remain calm, however the virus has caused many people to take a look at their circumstances and to take sensible preparatory steps to ensure that their affairs are in order. As a general rule, I would always advice clients to have the following in place:
Lasting Powers of Attorney (LPAs)
These documents allow you to appoint attorneys to manage your financial affairs or make decisions in relation to your health and welfare. The two types of LPA operate in very different ways: LPAs for finance can be used by your attorneys, acting on your instructions, as soon as they are registered. This allows your attorney to manage your financial affairs and deal with financial institutions on your behalf if you are, for instance, house bound or in hospital. This authority continues if you later loose mental capacity, unlike other types of general power of attorney.
LPAs for Health can only be used if you have lost capacity to make decisions about your treatment. They allow your attorneys to decide where you live, what treatment you receive and whether or not to maintain life sustaining treatment. As a result, for some people this can be the more important type of LPA. Without this document all decisions are left to the doctors or social care workers managing your day to day care.
LPAs must be made while you have capacity, and continue for your lifetime, unless revoked at an earlier date, or unless you outlive your attorneys.
They are very useful documents to have in place, and can save a lot of time, money and stress if a time where to arise where they are needed.
Unlike LPAs (which operate during your lifetime only), Wills determine who deals with your estate on your death, and directs where your estate should go. When you prepare a Will, you review your estate as a whole and consider the various members of your family and how you wish to benefit them. You can look at each beneficiary’s needs and circumstances and, where appropriate, build in protection for the funds which allow a beneficiary to enjoy (but not waste) their inheritance.
Drafting your Will also presents an opportunity to undertake some inheritance tax planning, to ensure that as much of your estate passes to family members as possible.
I always advise my client to have their Wills professionally drafted (see https://allanjanes.com/-The-Horror-of-Homemade-Wills for the reasons why). If you die without a Will then your estate will pass under the intestacy rules, which can lead to some unforeseen results (https://allanjanes.com/-What-Happens-If-I-Do-Not-Have-a-Will).
If your homelife is particularly complicated then it is additional important that you have a Will in place. This would allow you to provide for children from an earlier marriage or honour obligations made on a divorce settlement. It can also allow you to provide for a spouse, while protecting the capital in your estate for your children.
In some cases it will be more likely that your estate will be challenged on your death (https://allanjanes.com/-8-Signs-That-Your-Estate-is-Likely-to-be-Contested). In truth there is very little that can be done to prevent this, however a carefully prepared Will can reduce the likely success of any such claim.
Make a list
Following a death or mental incapacity it can be very difficult and time consuming for family members to try and discover details of your finances. It is therefore very helpful if you keep an up to date list of all your important information. This includes details of the house insurance, your bank accounts (but never log in details), any mortgages or other regular payments and lists of utility providers. Information such as your national insurance number and marriage certificates should also be easy to locate.
Similarly, if you have made a Will, ensure that your executors know where this is stored. There is nothing worse than having to call all the solicitors in the town, trying to trace the whereabouts of a Will, following a death.
If you would like to discuss any of the above matters in more detail then please contact either Ashley Minott (01494 893518) or Alex Stanier (01494 893533) to discuss further. In light of government guidance we would be happy to facilitate telephone or Skype meetings, or to arrange to meet you at home, where necessary.