Last Will and Testament

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Guidance

Once you have Separated or Divorced and all matters have been finalised then you should always review your Will or have a new Will prepared. This is to protect your interests and that of your loved ones.


At the right time we will be able give you some guidance as to your options. This will then help you consider the production of an up to date Will and related documents that reflect your wishes.


The preparation of the following documents are relevant after separation or divorce:

Last Will and Testament

Power of Attorney/Lasting Power Attorney

Living Will

Advance Decision


Lasting Power of Attorney and Will

The two most important documents you can have are a Lasting Power of Attorney and a Will.


Many people confuse a Lasting Power of Attorney with a will or assume that because they have a will they automatically have some kind of power of attorney. To answer the question, why you need a lasting power of attorney if you have a will, then we provide clarification below:


A Lasting Power of Attorney is the opposite of a will

A will protects your beneficiaries’ interests after you have died, but a Lasting Power of Attorney protects your own interests while you are still alive, up to the point where you die. The moment you die, the power of attorney ceases and your will becomes relevant instead.


By setting up a Lasting Power of Attorney, you give someone you trust the authority to make decisions and to act on your behalf and in your best interests, while you’re still living and breathing.


Once you reach a point in time where you need someone to act for you, it’s often too late to get a Lasting Power of Attorney set up. It’s like insurance in that respect. Once it is all set up though, you can forget about it and hope it never has to be used.


One of the most important pieces of advice for anyone with a relative who may at some point need care is to set up a LPA without delay.


A power of attorney is vital for anyone regardless of age, who has money and assets to protect and/or who wants someone to act in their best interest. In terms of healthcare choices should they be unable to make decisions for themselves.


There are two types of Lasting Powers of Attorney:

• Property & Financial Affairs

• Heath & Welfare


If you are asking yourself why you need a power of attorney, consider the prospect of a complete stranger making decisions about your money, your house or your health and wellbeing including where you live. While your family is powerless to do anything to protect you. That is an example of the kind of situation a Lasting Power of Attorney helps prevent.


In that sense, a power of attorney could be considered more important than a will, depending on your point of view, because it safeguards your interests while you are still alive. It is best to get both things sorted though a will and a Lasting Power of Attorney. It is also a good idea to have both types: Property & Financial Affairs and Health & Welfare.


Choose one or more people you trust completely to act in your best interests.


Remember, you want this person/these people to fight for you should you no longer be able to act for yourself or make decisions for yourself while you’re still alive. These are called your attorneys. You are called the donor, because you’re giving them power to act.


If you do wait until you are no longer mentally able to act for yourself, the Court of Protection may not allow a power of attorney to be set up any more. Instead, your family will have to apply to the Court for a Deputyship order.


It means that your family is the likely to have to account for their every action and expense on your behalf including where joint bank accounts are concerned. It can be very difficult and having to apply for a Deputyship can also be a long process and expensive, and it would be at a time when your family is already deeply distressed about what may have happened to you.


Setting up a Lasting Power of Attorney is straightforward and it gives reassurance that if you do become incapacitated for whatever reason, whoever you choose as your attorney(s) can act immediately on your behalf and in your best interests.


We see many cases where someone has become unable to act for themselves, but there is no power of attorney. It means the family’s hands are tied and they are unable to act on their relative’s behalf in any assessment or appeal process for care funding, for example. Many families have good reason to feel that the care authorities are not on their side, and feel powerlessness while the authorities make decisions on your relative’s behalf is not something to relish.


Family members with power of attorney, on the other hand, have been able to fight their relative’s corner and protect their interests when dealing with the NHS and the local authority. Without such a document they may not even have been able to access their relative’s bank account on their relative’ behalf to pay a care home or care provider or to influence the kind of care that will be provided or even where it will be provided.


If two spouses or partners are making a power of attorney, they each need to do their own. It can be tempting for partners or spouses to choose the other partner or spouse their attorney. However, it’s important to consider who would be able to act if both spouses/partners are incapacitated at the same time. For this reason, many people also name an additional person or people, such an a son or daughter.


Also, spouses should not assume that one spouse can necessarily act for the other just because they’re married. The Court may not see it that way. A spouse often needs legal authority to act for the other through a power of attorney.


Why make a will?

We believe a very good reason to make a will is to control how your estate is divided. But it isn't just about money it’s about peace of mind and much more. Your will is also the document in which you appoint guardians to look after your children or your dependents. The place to start is to look at what happens if you don't make a valid will (in legal terminology, if you die intestate the Rules of Intestacy England and Wales are applied.


What happens when you die intestate?

Two administrators are appointed by the Probate Registry, a division of the High Court, to wind up your estate. They have the same function as executors (people you appoint to wind up your affairs), but they are appointed by the Court.


Any person may apply to be appointed as an administrator. To be appointed, an application must be made to the Probate Registry.


Occasionally more than one person or one set of people apply. In that case a judge must decide who has priority. Generally; it is clear from the relationships of individual people who has the best qualification. 


Here is the order of priority:

• your spouse (or if he or she has survived you but dies before obtaining Letters of Administration of your estate, his or her personal representative)

• your children (or, failing them, your grand -children)

• your father and mother

• your full brothers and sisters or their children

• your half brothers and sisters or their children

• your grandparents

• your uncles and aunts or your first cousins

• your half- blood uncles, aunts and first cousins

• The Crown

• your creditors

Relatives by marriage do not qualify in any other category.


The rules on intestate inheritance

The law divides your relatives into classes such as children, siblings, grandparents, and so on. All members of any class inherit in equal shares.


Once even one person has been identified in a class, then all lower priority classes are excluded. Your assets are divided among however many or few members there are of the priority class. There is an exception to this for close family, as you will see below.


If a member of a class dies before you and leaves issue (children or grand -children) who survive you, the issue inherits equally between them the share that their parent would have inherited had he survived you.


If anyone entitled to inherit is under the age of 18, then the inheritance is held in trust for them until they either reach the age of 18 or marry under that age.


If your spouse does not survive you by 28 days your estate is distributed as if he or she had not survived; you.


So who gets the money?

Provided your spouse or civil partner survives you by 28 days, and there are no persons in any of the above categories, then he will inherit your entire estate.


If there are any surviving children, grandchildren, parents, brothers or sisters, he or she will receive less and people in these classes will inherit some of the estate.


Your spouse is entitled to your personal chattels (which we call 'possessions') in any event and whoever else is alive. Your spouse is also entitled to receive what is known as the 'statutory legacy' and interest from the date of your death at the rate of 6 per cent until payment. The statutory legacy at the time of writing is £250,000. There are further rules for division of your estate beyond that.


So, why making a will is important?

Coming back to the central question of why make a will, the reason is to (as far as possible) override the law that defaults if you die intestate.


Reasons why you might want to do this are:

So as not to give your estate to an estranged husband or wife.

Your surviving spouse comes top of the list of beneficiaries if you leave no will. So, if your marriage has broken down but no divorce has been finalised, your surviving spouse (now your 'ex') might inherit the whole or a share of your estate.


So as not to ignore an unmarried life partner.

If you live with someone with whom you are not married nor in a formal civil partnership, and you die intestate, your life partner has no automatic right to inherit anything from you.


To allow your spouse or partner to keep living in your home.

If your home makes up a high proportion of the value of your estate, your surviving spouse or life partner might be compelled to sell it to fund payments for tax or your bequests to children or other relatives.


To avoid paying more inheritance tax than necessary

Do you really want to give your money to the state? At the time of writing this, inheritance tax kicks in at £325,000. That includes gifts you have made in the seven years before your death.


The fact is that if you have a house worth £300,000, and have a mortgage protection, endowment or life policy, and you are contributing to a pension; you could well find that under intestacy, your estate may well pay IHT on virtually everything you leave at 40%.


You probably know that what your spouse or civil partner (but not an unmarried partner) inherits from you is free from inheritance tax on your death, but in the longer term that is of no help. When he or she dies, the value will just make his or her estate even larger.


To control who doesn't receive your estate

It can be easy to disinherit the people about whom you care the most, or who need your estate the most. If you die intestate while you are married, your estate passes to your spouse.


If she remarries, then dies intestate, her estate (which would include yours) would pass to her second husband. He might leave his estate to his children (all from his first marriage to someone else). The remainder of your estate would be inherited by the children of someone you may have never met.


The only way to ensure that certain people receive certain gifts (particularly ones with sentimental value) is to create a will or gift the items well before you die.


To nominate who will look after any young children

This important issue cannot be covered entirely in your, will. Ideally, you should consult with friends and relatives and obtain their acceptance of whatever decision seems best for your family. Your will remains the best place to record this. Suppose both parents die in the same accident.


Without this record, your children could be brought up by people you consider quite unsuitable, or even taken into care. You may be interested in reading our articles that cover guardians and trustees and making sure your children are provided for.


If you are an unmarried mother, you can appoint a guardian to your children by will. This is important because your children's father does not necessarily have the legal powers of a parent nor become their guardian.


We encourage you to make a will and reasons for making a will are:

Everyone should make a will before they die. Everyone needs a Will that reflects their unique wishes.


To control who inherits your money and possessions;

To nominate who makes sure your wishes are carried out; and,

To name who will look after your young children, if you have any and if you die before they reach adulthood.


There are five easy steps to consider with every person on the drafting of their Will; which are as follows:


1) We assist in working out the value of your estate. Your estate means the value of all you own, minus any money you owe out.

2) You decide whom you would like to provide for in your Will, from your nearest and dearest to your favourite charities.

3) If you have any dependent children, choose guardians. These are usually relatives or friends you would want to look after your children.

4) You choose your Executors. An Executor is someone you nominate and entrust after your death, to carry out the instructions in your Will.

5) It’s good to make notes of any questions. This can then be talked through with your expert.


Consideration should then be given, how best to structure your will so that you reduce the amount of inheritance tax paid on your estate if that is relevant. This depends on the value of your estate.


For some people, no inheritance tax will be payable on making a Will; because the value of the estate is lower than the starting point the threshold at which tax is paid. However, if the value exceeds the threshold seeking information on estate planning options is important.


We offer Free Guidance as part of the Mediation Process- 0800 612 4614.