Wills and Lasting Powers of Attorney: Important, or irrelevant?

There is a common misconception that wills and Lasting Powers of Attorney (LPAs) aren’t all that important. We provide the facts to prove otherwise:

Wills

  1. If you are married, everything will pass to your spouse. This couldn’t be further from the truth. Granted, while the majority of your estate may pass to your spouse eventually, it won’t happen automatically and it becomes a long drawn out and often extremely costly process (particularly if you have young children). Having a Will would eliminate these problems and ensure that your family don’t have to endure additional stress.
  2. Blended families. It is entirely possible that should you pass away your spouse will re marry, often to partners with their own children in tow and so it is important to recognise that while it may be an unpleasant thought, should the second marriage break down or your spouse die prematurely, your own children may not inherit what is rightfully theirs. By having the correct type of will in place, you can ensure that at least your share of the assets are protected for future generations.
  3. Tax planning. Let’s face it, the majority of us don’t want to voluntarily hand over our hard earned cash if we can help it. Setting up a will and/or a will trust enables efficient tax planning such as lowering the cost of Inheritance Tax that may be payable.

Lasting Powers of Attorney (LPAs)

  1. LPAs are for the elderly. Wrong. LPAs deal with a number of issues, not just where you have lost the ability to make decisions for yourself. Property and Financial LPAs are particularly useful in scenarios where you may be housebound due to illness or stuck in hospital for a length of time. It allows your attorneys to ensure the ongoing running of your household by paying the bills or even just popping to the bank to withdraw money on your behalf, just until you’re back on your feet.
  2. An LPA is quicker. If you lose capacity without one, while the Court of Protection will allow your family access to your finances that they may need, the process takes a long time (at least 6-8 weeks) leaving your family to potentially suffer financial hardship in the meantime.
  3. You can still retain control. You can limit your attorney’s powers by clearly stating such limitations in the LPA. However, it is worth bearing in mind that once the restrictions are in place you won’t be able to change them, so don’t limit access to parts of your life that you may want them to have access to further down the line.

For more information on Wills and LPAs contact our Private Client team.

-Jennifer Barker