Power of Attorney
What is it?
Quite simply, it's a legal document that will allow someone (of your
own choosing), to look after your affairs should one day you be
incapable of dealing with them personally.
Nobody likes to think of the
possibility that someday they may find themselves incapable of
handling their own affairs due to illness or accident. But whilst
there is no need to be unduly alarmed, the fact remains that as many
of us are living far longer than our ancestors did due to things
such as advances in medical science, and sometimes our physical
bodies can outlive our brain's capacity to effectively support them.
(This is often referred to as becoming incapax.)
What happens if I don't do anything and I do become incapax?
Someone (usually a close family
member) would need to apply to the court for a Guardianship Order.
(This takes time and typically costs £2,000 to obtain.).
Guardianship orders are not as effective as pre-arranged Power of
Attorney documents and only last for a period of three years.
In addition, Discretionary Trusts are often a valuable tool to use
in sensible estate planning with regard to such things as potential
Inheritance Tax situations, and a Power of Attorney can be useful
document in association with these Discretionary Trusts in helping
to protect your needs and those of your family. (This cannot be said
of Guardianship Orders)
One common misconception is that when
one spouse dies without a Will the whole Estate will pass to the
surviving spouse. This is not necessarily the case. Another popular
misconception is that children will not inherit until they are 18 or
21. In fact nowadays children inherit at 16 unless there is a Will
which provides otherwise.
Clients very often put forward reasons
as to why they have not made a Will and why they do not wish to make
"I am too young to make a Will". People often think
that making a Will is only for old people but this is simply not the
case. You might have a 30 year old who is married and has young
children and who might leave substantial estate including a Death
In-service payment. He might think that everything will
automatically go to his wife but that is not necessarily the case
and he might be disturbed to learn that any part of his Estate which
goes to his children will vest in them at the age of 16. If he does
not wish to take these risks then he must make a Will.
"I have nothing to leave". People usually
underestimate what they will be worth when they die. They forget to
take into account Life Assurance Policies or Death In-service
payments or likely inheritances. If the Will making process is
carried out properly it will usually show the client that on death
there will be a sizeable Estate and that making a Will is essential.
"I have no one to leave my Estate to". If someone has
no spouse or partner and no issue then they might think there is no
point in making a Will. However if they do not make a Will then the
Law will decide who is to benefit and this could mean that fairly
distant relatives will benefit. Not only will the customer probably
not want some of them to benefit or not to benefit in the
proportions decided by the law but they will usually wish to avoid
the sometimes very considerable cost involved in tracing distant
"My family will do the right thing". Hopefully this is
what will happen but, of course, it can never be guaranteed and it
is often the case that a death in the family brings out the worst in
people. There might be good reason for the Estate being distributed
differently from what the Law decides but no one should ever rely on
all members of the family to do the right thing.
"My affairs are too complex". Quite often people put
off making the Will because their circumstances are complicated e.g.
children to a second marriage and they are not sure what to do. They
therefore decide that they need to go away and think about it. In
practice they go away but they usually do not get round to thinking
about it or even if they do they do not get round to implementing
the decision. If the Willwriter encourages them to think about it
there and then and helps them along by explaining the options
available, it is surprising how often what at first instance
appeared complicated turns out to be relatively easy. It is those
who have complex circumstances that need a Will most and they need
to make it as soon as possible.
"I cannot afford a Will". Clients sometime seem to
think that if they have left something to someone in their Will then
they must preserve it for them but this is not the case. It must be
emphasised to clients that they are, of course, free to do what they
want with their Estate during their lifetime and that the Will only
covers what is left when they die.
"Ihave not got round to it yet". Most people know that
they should have a Will and it is simply inertia which is stopping
them. By taking the service to the client and removing all the
hassle the Willwriter will make the task far simpler and more
"Why make a Will now". The client is already thinking
about it and getting started is the hardest part. You never know
what is round the corner. Illness or even worse can strike at any
time. It will only cost more later on. And if you don't do it now
you probably never will.
for more information.