A lasting power of attorney is a tool that you can use to give someone authority to make decisions for you if, at any time in the future, you lack the mental capacity to do so for yourself. The lasting power of attorney can be used for both financial and medical or care decisions.
In financial situations, the lasting power of attorney can be used for buying and selling property, mortgage payments, investments, ensuring bills are paid, and arranging any repairs that need to be made to properties. When it comes to healthcare, it can cover everything from where someone should be cared for (at home with a carer, in a home, or in a hospice, for example), what kind of care should be provided, and even end of life decisions including continued care.
If you choose to name someone as your lasting power of attorney it must be someone you trust, and with whom you can have meetings to work out what should or should not happen in specific circumstances. In financial situations, whoever is your power of attorney must keep detailed accounts of anything that is spent.
In order to set up a lasting power of attorney, however, you must be in good mental health. This is not something that can be done if your mental capacity is already failing. Equally, you must not have made the lasting power of attorney under duress. It will need to be signed by someone in a professional capacity such as a solicitor, doctor, or social worker. Once this is done, the LPA must be registered with the Office of the Public Guardian before it can come into effect.
The living will has now been replaced by the more secure lasting power of attorney – however, living wills written before 2007 are still valid.
The phrase ‘living will’ rolls off the tongue with ease, and it seems as though script writers enjoy adding it to their murder mystery or FBI investigation programmes with impunity. But although we’re all heard the phrase, and although we might think we know what it means (in terms of the story on TV that we’re watching), there could certainly be nuances that we’re missing.
A living will can also be called a health care directive, advance directive, or physician’s directive. It is similar to a standard will since it is used to write down one’s wishes should something happen – should a specific set of circumstances occur. However, whereas in the case of a standard will that specific set of circumstances is the testator’s death, with a living will it is quite different. As the name suggests, with a living will it is not death that will move the items within it to be carried out, but instead a life that is drastically altered to the one that you were living. If, for example, you were to be involved in an accident that left you alive but in a permanent vegetative state, or a terminal illness that resulted in an end of life coma, the living will could come in to affect.
Not everyone needs or wants to write a living will, but for some the idea of being kept alive solely through machines is a terrifying one, and not something they want to happen to them. A living will will ensure that they are not forced to ‘live’ in such a way. As medical advances continue, death is being pushed further away from many people which, in most cases, is an excellent thing, but when it comes to a case in which death would have been preferable (for the person involved), then the living will can help allow that death to happen.
Through your living will you can instruct medical professionals (at the same time informing your family) that you wish for no ‘heroic measures’ to be taken to keep you alive, and neither do you want any medical intervention including life support machines. The living will can be incredibly specific, allowing you to mention exactly what techniques and medications you would not allow – and the ones you would.
The living will is a way that someone can make their wishes heard when they are unable to speak for themselves. For some, however, the idea of creating such a document sounds like a dangerous thing – what would happen if you were involved in an accident and were unconscious and the living will was invoked even if you could have been saved and gone on to live a perfectly normal life? There is no need to worry about that – the living will is only used when the patient is in a permanent state of unconsciousness. This would need to be certified by medical professionals. Simply being unconscious after an accident would not trigger the living will, and you would be treated as anyone else would in the hospital.
A living will is not something you need to write instead of a standard will; you can have both. However, there is little point in having a living will if no one knows about it – if no one knows it exists, how can anyone action it? So if you do choose to write one, make sure you tell your family about it. Tell your friends. Tell you GP. Tell a solicitor. Make sure that it can be found should anything happen. And make sure that it is drawn up by a professional so that there are no quibbles or questions asked about it. There must be no doubt about what the patient’s wishes are, even if the family does not agree with them.
The government of the Isle of Man, which is not part of the UK or the EU, has recently cut its probate charges for non-resident probate applications, assuming the deceased’s only Isle of Man asset is a life insurance policy taken out by an Isle of Man insurance company.
There will now be a £250 maximum charge for any estate that is over £55,000. The charge used to be a maximum of £4,000 for estates over £125,000, and £8,000 for estates over £1 million. Not only that, but in the past there was no distinction between resident and non-resident applications. Since 1st July 2016, it makes a difference.
The changes have come about after the UK government as well as Manx-based insurance companies had discussions with the Isle of Man government about what was seen as excessive probate charges. The worry was that the price would have a major impact on the future economy of the Isle of Man, with people not wanting to purchase property there due to the high charges that their families would be required to pay after they had died.
The new charges are hopefully going to show that the Isle of Man is a great place to invest, particularly in property. This will have a positive impact on the amenities of the island and the money coming into the economy.
There are some terms that many people are aware of, but even though they may think they know what it means, they might be a little wrong. One of these terms is ‘next of kin’.
Anyone can be a next of kin – they do not need to be a blood relative, or family member. So although for most people their next of kin is their spouse or partner, they don’t have to be – they can be anyone you choose.
A next of kin does not have any legal responsibilities. They cannot see your medical files, and they have no direct claim on any of your estate or finances. Just because you have named someone as your next of kin on a form somewhere it does not mean that they will be able to run your estate should you be unable to – if you wish this to happen, you would need to prepare a lasting power of attorney and name them (or anyone you choose) in that instead. And just because someone is your next of kin does not mean that they will automatically inherit your estate if you die without a will – unless they are also your spouse, civil partner, or blood relative (dependent on the intestacy rules).
You might need to name a next of kin when you apply for a job, so that, if you get the job and have an accident or incident, the right people can be informed. It is also something required for when you are admitted to hospital, again so that people can be informed of what is happening. In more serious cases, the next of kin may be required to make certain decisions about your treatment. Or perhaps you are keen to try some kind of extreme sport… there will be forms to complete and your next of kin will need to be named. It is always worth considering the name you are writing down. If, for example, your spouse is with you, and taking part in the same activity, and something goes wrong, would it be better if someone else’s name was on the form so that another person can find out what is happening?
Donatio mortis causa, literally translated from the Latin as ‘gift on the occasion of death’ is often called a deathbed gift. It may sound morbid, but these gifts made ‘in contemplation of death’ are actually very popular, and make sound sense. It is the one exception to items that should be included in the Wills Act 1837.
There are three rules that need to be adhered to if you want to arrange a donatio mortis causa. Firstly, the person giving the gift must be aware that they will die in the immediate to near future. It is not enough to say that you want to give the gift because you will die ‘one day’. There must be a life limiting illness, or an accident that will reduce the lifespan of the gifter.
Secondly, the gift can only take effect once the donor actually dies. It cannot be given before death, and it can be revoked should the donor decide that they no longer wish to give the item, property, money, or whatever it may be.
Finally, there has to be an actual, physical handover of the gift. Keys need to be physically handed over if the gift is a house or a car, for example.
Many of the disputes that occur after death are due to donation mortis causa. Some people use this method instead of preparing a will, but that is not what it should be used for. A will is still required, especially as there is usually no evidence that a donatio mortis causa has actually been arranged – there are usually just two witnesses, and one of those will necessarily be dead if the DMC is to be invoked.
We recommend speaking to an expert if you want to arrange a donation mortis causa – it could be that a different method of gifting is better for you and your beneficiary.
After someone dies, the first people (or rather, for the most part, companies) who need to be paid are any creditors. This must be done before anyone is given their share of the inheritance, and once it is finalised by the executor, whatever is left can be distributed as the deceased intended.
One question that is often asked, however, is what happens if the estate cannot pay the creditors? What is it is a ‘poor estate’? This problem actually happens a lot more than most people would imagine, and is especially prevalent when people die unexpectedly, and therefore they haven’t had a chance to tie up any loose ends, or pay off any debts before passing away.
There are some strict rules in place that allow executors to work out which creditors to pay first, assuming there is not enough money in the estate to pay all of them. A specific payment scheme will have to be set up – and the executor will be liable if anyone is paid out of order, so it is essential to speak to an expert before paying anyone.
If the estate is poor then some – perhaps even most – of the creditors will not receive the full amount of money owed. If they did, the estate could easily be pushed into insolvency, and there are safeguards in place to ensure that this does not happen. However, the executor may need to see certain assets in order to satisfy a creditor’s claim – these assets form part of the estate, after all, and need to be included in any valuation and payment plan.
Once the creditors have been paid as much as possible, the rest of the estate will be available for the beneficiaries. It is important to note, however, that sometimes there is nothing left at all.
Sometimes it happens. An heir can sign with two heir hunting firms for the same inheritance. Why would a beneficiary do this? It could be confusion or it could simply be to ensure they do receive their inheritance. It could even be so that the company will stop getting in touch (some heir hunting firms can be unscrupulously firm in their tactics). Or perhaps the first firm is having trouble securing the inheritance and the second firm – with additional evidence – promises they can do better.
Whatever happens, the heir is certainly due their inheritance. But does this mean that both firms are then entitled to commission from the estate?
Technically yes, both firms would be entitled to their commission since both firms have a contract with a valid signature on it. However, only one of the firms will have been able to complete the case, and therefore that is the firm that the beneficiary will be more willing to pay. It could be that they realise they should pay both, and do so, but equally, if they have already paid, and the work has been completed, they may feel that they should not have to pay anymore.
And in these cases the original firm might choose to take them to the small claims court if the amount was less than £10,000. If it was more than that, the High Court could become involved. However, unless the original firm can prove that they did the work, it is unlikely that such a case would succeed, at least in its entirety. Instead, a smaller proportion of the fee might be awarded rather than the entire amount. When court fees are added into the calculations, it isn’t always worth chasing.
Parents will, for the most part, want to name their children as a beneficiary of their estate once they have died. But what happens if that child is a minor (under 18) at that time? Are they able to inherit?
The answer is that they are not able to receive their inheritance, but that doesn’t mean that you can’t name them as a beneficiary. It may sound strange, but as long as you include a caveat within the will that states that if the child is under 18 at the time of your death then their inheritance will go into trust, then there should be no problem.
But even if you don’t specify what type of trust you wish your child’s inheritance to go into, there will be an automatic trust arranged. This trust (over which you will have no say as it won’t have been arranged in advance) means that your executor will have the responsibility of the money, property, or other assets until your child becomes an adult at the age of 18.
If you set up a trust yourself, you can choose any age (over the age of 18) for your child to receive their inheritance. This can be useful if the sums are particularly large, and you feel that you would want your child or children to inherit only when they are more financially responsible, which often comes with age.
Sometimes it can be a good idea for the trustee of your child’s trust to also be the person named as their guardian. This means that everything can be looked after in one place, and there will be no confusion. However, it is perfectly possible to name different people for each role. As long as the information is written in your will, and discussed (ideally) with the people concerned beforehand, then everyone will understand what is to happen, and how.
Heir hunting is essential when someone dies intestate (ie without a will), and there are no immediate relatives to inherit the deceased person’s estate. An heir hunter will then carry out an investigation in order to discover any distant relatives who would be able to inherit the estate. But what other reasons might an heir hunter be employed to find someone?
It could be due to health issues. Some diseases are known to be hereditary, and if someone dies from something particularly aggressive, and especially if it can be treated, then finding members of the extended family could actually save lives. And if the disease cannot be treated, it is worth letting people know this as well – so that they can decide about whether or not to have children and so on. Cancer is one such disease, as well as hereditary heart conditions and degenerative diseases such as Parkinson’s and multiple sclerosis.
Heir hunters can also be hired to find family members when there is no inheritance involved. This could be when people do go missing – or they have moved away and contact has been lost. It could also be used for finding biological families after an adoption. Although it is possible to do these things yourself, heir hunters have the tools and the expertise to do it much more quickly. And although you will necessarily need to pay them for their time, it could well end up costing less than if you were to try to do it yourself. Think of all the time you would need to put into the search, and how many websites or organisations you would need to sign up for – and potentially pay for – if you were to go it alone. Hiring a professional heir hunter will make things much easier.