Do I need a Will and Lasting Power of Attorney?

Do I need a Will and LPA?

You can make a Lasting Power of Attorney and a Will from the age of 18 but around two-thirds of eligible people don’t have one. Almost everyone needs a Will and everyone needs an LPA, regardless of their age or financial status. We explain the top reasons why you need both of these documents in place from the age of 18.

“Many people think that they don’t need a Will since they don’t have an estate. That is just wrong. A Will is not for you, but it is for those you love and leave behind. When you die, someone has to settle your estate if you own [or owe] anything.”

~ Scott A. Bishop, STA Wealth Management

You need a Will and LPA in place if…

You have an accident or fall ill

People generally think that losing the ability to make decisions for themselves is something that could happen in old age but this is naive. An accident, stroke or illness could befall us at any age and leave us unable to make decisions for ourselves.

In such circumstances, despite popular opinion, your parents, spouse/civil partner or cohabiting partner cannot manage your financial affairs and cannot make decisions as to your care. They would need two types of Deputyship Order to do so – documents that cost hundreds if not thousands to obtain and takes several weeks to organise. In the meantime your bank accounts can be frozen and decisions regarding your care will be made by your health and social care team – perhaps in contravention of what you would have wanted.

Worse still, anyone can apply to be your Deputy – and it might not be the person you would have chosen. A cheaper, simpler and quicker way to ensure you are protected if you lose mental capacity is to make a Lasting Power of Attorney nominating someone you trust to make decisions for you.

You’re married

Do I need a Will? Married couple

If you’re married and you die without making a Will, your partner gets the first £250,000 of your estate, with the balance split between your partner (50%) and your children (50%). However, this can cause problems down the line – for example:

  • If your partner needs care after your death, the money they inherited can be used to pay for their care fees (rather than going ultimately to your children or grandchildren).
  • Your partner may remarry, making their new spouse the first in line to inherit (over and above any of your children). If your partner dies before their new spouse, the whole estate could pass sideways out of the family.

Leaving a Will can protect your share of the family wealth and ensure that ultimately it goes to your children or grandchildren.

You’ve got children

Do I need a Will - family

If you have children, you need a Will for two reasons – firstly (for minor children) to name a guardian, and secondly, to provide for them. Even children who have attained the age of 18 would normally depend on their parents financially during their lifetime at various stages. Again, if you don’t yet have assets, consider whether taking out a life insurance policy would be right for you.

Of course, if you have children from a previous marriage or stepchildren, making a Will becomes even more important.

You’ve been married more than once

Do I need a Will - more children

If you were married previously, your former spouse is entitled to claim against your estate on your death under the Inheritance (Provision for Family and Dependants) Act 1975 – provided that they have not remarried. Although making a Will won’t prevent such a claim, it will make your wishes clear and these carry significant weight in such cases.

Further, if you had children with your former spouse, you may find that they are not provided for on your death. Without a Will, your current spouse will inherit the first £250,000 of your estate with any balance being split between your current spouse (50%) and your children (50%). With the median household wealth at £225,100, this leaves nothing for your children – and your current spouse may not be inclined to leave provision for children from your former marriage on their death.

Leaving a Will ensures that those you care about are provided for. If you don’t have many assets, consider whether taking out a life insurance policy (which you can leave in your Will or place into trust) might be right for you.

You’re cohabiting

If you and your partner are unmarried (or not in a civil partnership), they won’t be entitled to any financial provision on your death. You can correct this position by making a Will.

If you’ve been cohabiting for two years or more, they can make a claim for a financial provision from the estate under the Inheritance (Provision for Family and Dependents) Act 1975. However, this can be a lengthy and expensive process and their claim may not be successful. Such claims can also cause a lot of upset for loved ones who are already dealing with the shock of your loss. Making a Will is a simpler and cheaper solution.

You don’t want want to cause division in the family

Without a Will, the rules of intestacy can produce some unexpected results. Of course, your children can challenge your Will (or your estate, if you didn’t leave one) but your loved ones will already be grieving and the prospect of a challenge only adds to that grief. Leaving a carefully thought out Will helps to minimise the likelihood of your estate being contested. Again, if you don’t have many assets, consider whether a life insurance policy may be right for you.

Making a Will helps provide for those you care about, showing them you have thought about them and ensuring that none of your assets are wasted on unnecessary legal expenses.

You have a preference over who should deal with your assets

Making a Will allows you to appoint your choice of Executors, who will collect together your assets, pay any debts and distribute your estate according to your wishes. If you don’t make a Will, certain people are entitled to ‘administer’ your estate, in order of priority as set out by the law. These may not be the most financially astute people within your family. It makes sense to select your own choice of capable and competent Executors to handle your affairs.

You made a Will more than three years ago

“There is a misconception that if you completed a will once, you don’t need to worry about any estate-planning considerations if your wishes haven’t changed.”

~ Theodore R. Haley, CFP, president of Advanced Wealth Management.

Generally we recommend people revisit and review their Wills every three years to ensure it fully meets their current needs, taking into account changes in legislation and tax regulation.

A life event has occurred since you last made a Will

Do I need a Will - divorce

A number of life events may mean you need to revisit your Will sooner than the three year recommended review date. Some examples include marriage/civil partnership, divorce, separation, purchase of a new property, the birth of a child or grandchild and the death of your spouse/partner or a relative.

You’re worried about care fees

You may wish to make a Will or update your current Will if you have not yet considered how to protect your share of the family wealth from future care fees and other predatory third parties. See our articles ‘Do I need to change my Will?‘ and ‘What happens to inheritance on divorce?‘ for more details.

You don’t want your estate to be eaten up in legal fees

The trend for contesting Wills is ever growing, the  and in some of those cases, the estate will pay the legal costs. These include where you’ve left a Will that is ambiguous or causes confusion, or where your conduct during your lifetime give grounds for questioning your testamentary capacity. A number of other circumstances arise where the cost of legal action may be paid out of your estate.

If therefore you made a Will yourself (a ‘DIY’ Will) or your Will is outdated, writing a new Will can help to avoid the cost – and heartache – of such challenges.

You don’t want your estate to go to the Crown

You might think that nowadays no estate would end up going to the Crown, but you’d be wrong. At the time of writing there are 9,954 estates on the Government’s Unclaimed Estates list. Of those who died in 2017, a number are aged in their forties. Even if it seems clear that you have someone to inherit your estate now, circumstances can change very quickly. See our article ‘Could you be heir to a fortune?‘ for an overview of the Bona Vacantia list – and make a Will to ensure you don’t end up on it.

You have preferences regarding your funeral

Would you rather be buried or cremated? What kind of funeral service would you like? Do you have any preference on music? A Will allows you to set out these preferences which may also take into account the feelings of those close to you.

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