Wills, Probate & power of attorney
Getting the right Will, and understanding how probate works is important so that your wishes are met, and the distributions to your loved ones are maximised.
A will is a legal document which stipulates how an individual wishes their assets to be distributed on death, and it names one or more people as executors who will manage the estate until it’s finally distributed among the beneficiaries.
A will is a very important document for you and your family because it ensures that your estate is distributed to your loved ones as you wish, and that they are protected along with your property and assets. Having a will in place makes things much easier for your loved ones to sort things out when you die.
In the absence of a will there are rules in place which stipulate how your assets will be allocated, and this may not be what you wished for. For example, it is worth considering that unmarried partners cannot inherit from each other, and your children may not benefit as desired where no will has been made. It is also important to remember to change your will accordingly should your circumstances change, or you re-marry.
It is important to tailor your will specifically to your personal circumstances, and assets & property so that it can be a valuable tool ensuring your estate is properly protected.
Wills can also be used as a strategic tax planning tool, in order to protect your assets for future generations and maximize what is passed on to them.
Probate is the process that deals with a deceased estate, typically involving clearing of any debts, and distributing the remaining assets to beneficiaries in accordance with the diseased will. In summary the grant or probate provides the necessary permission to administer the estate and distribute inheritance.
There are specific rules which stipulate how you should notify the necessary authorities, and distribute the estate. You will first need to apply for a grant of probate (or a grant of confirmation in Scotland). Different rules apply to those who die with no will, this is commonly known as ‘dying intestate’.
The process for settling someone's affairs will depend on whether you choose to do it yourself, or appoint a professional to act on your behalf. Appointing a professional can be a good idea and, if you are dealing with a complex estate, could be essential.
The process of settling a person’s affairs when will depend on whether you do it yourself or appoint a professional to act for you. The appointment of a professional can be beneficial, especially if you are dealing with a sizable or complicated estate, and in some cases could be essential.
The executor of a will is the person who administers probate, and in most cases this person is appointed in the deceased’s will. Usually the executor will be a family member or close friend of the deceased, but it can also be a professional such as a solicitor who has been appointed.
The process that an executor as to deal with is typically summarised by the following steps:
- Get the full details of the deceased’s estate, all assets and debts.
- Apply for the grant of probate
- Complete the inheritance tax return, and pay any due tax.
- You receive grant of probate
- Repay any of outstanding debts of the deceased
- Distribute the remaining estate according to the instructions of the will.
Power of Attorney
If you become unable to do so yourself, a Lasting Power of Attorney (LPA) allows your loved ones to take care of you and your finances.
A power of attorney is a legal document that lets you (the donor) appoint one or more people (as attorneys), to either help you make decisions, or make decisions for you on your behalf should you become unable to do so yourself. This protects you from having a stranger, or someone you may not trust yielding power over your welfare decisions.
This will safeguard your interests giving you more control how your affairs are handled in the event of an accident or an illness that renders you unable to make your own decisions due to a lack of mental capacity.
In order to put an LPA in place you need to be over the age of 18 and retain mental capacity. It is important to have an LPA in circumstances where you lose mental capacity and must be put in place while you still have mental capacity. If you don’t have one in place, your family would be required to apply to the Court of Protection to have a deputy appointed who can deal with everyday financial matters. This can be costly, especially when a solicitor is required
There are two types of Lasting Powers of Attorney, of which you can chose to use one, or both types:
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Health and welfare LPA
A Health and Welfare LPA concerns decisions regarding your health and care, and where you live. This can only be used if you become incapable of dealing with such things yourself. It can be used as soon as it’s registered, with your permission.
You should use this type of LPA to give an attorney the power to make decisions about things like:
- your daily routine, washing, dressing, eating, etc
- medical care / treatment
- coordinating care providers or moving into a care home
- life-sustaining treatment
Property and financial affairs LPA
A Property and Financial Affairs LPA allows your loved ones authority to deal with financial matters on your behald, such as paying your bills, buying and selling your property, or managing bank accounts and investments etc. It can only be used when you’re unable to make your own decisions.
You should use this type of LPA to give an attorney the power to make decisions about your property & finances:
- managing a bank, savings, or building society account
- paying tax and bills
- collecting benefits or a pension
- selling your home
- managing medical and care fees