Proposed changes to LPAs trigger concerns
The UK government has recently held a consultation regarding proposals to introduce a new, entirely digital system of completing and authorising Lasting Power of Attorney (LPA) documentation.
A Lasting Power of Attorney in effect, transfers responsibility for an individual's daily financial and/or health issues to another nominated person, should they become incapable of making their own decisions. Encouraged by the authorities, there has been a significant rise in the number of individuals seeking to prepare such a document – a rise which has placed significant extra pressure on the Office of the Public Guardian (OPG) which processes the requests.
Currently, a person may draw up an LPA either by hand or electronically – then printing the document, executing it and sending it to the OPG. As part of this process, as with most other legal documents, the LPA must be witnessed.
Should the process be made entirely electronic, no witness would then be required, which of course throws up many questions about the security surrounding such a system. Many legal professionals feel that it would increase the risk of fraud and abuse, as well as potentially causing complications with foreign authorities.
An interesting case was reported last week, whereby a Leicester-based firm of solicitors was being sued for over £1 million by a woman who claims that it did not rewrite a will when it was requested, resulting in a substantial personal loss to her.
The deceased was a wealthy woman who wrote several wills throughout her lifetime, each time leaving the bulk of her £2.6 million estate to her cousin and former GP.
After her husband died and she moved into a nursing home however, her step- granddaughter claims that she wished to change her will a final time (several weeks before she died) to leave the majority of the estate to her.
According to her step-granddaughter, the law firm did not adhere to the deceased’s wishes and she was forced to prepare a will online for her grandmother, leaving it open to a contest of probate by the cousin and GP, which she lost and was forced to pay almost £1 million.
In response, the law firm stated that the solicitor concerned had received conflicting information about the mental capacity of the deceased’s mental health at the time and quite rightly, had insisted about speaking to her about it personally before agreeing to write a new will. Unfortunately, she died before she was able to do so.
The hearing continues in the High Court.
Many people of differing ages prefer to either postpone drafting a will or choose not to do it at all, rather than face the inevitable prospect of their death.
Sadly, this of course means that the loved ones they leave behind are all too often faced with unforeseen costs, family battles, financial worries and uncertainty amidst their grief.
Intestacy, when a person doesn’t leave a will, means that the court decides who will be natural beneficiaries and what they will receive – which may not be what the family or the deceased would have wanted.
It is sensible then, to consider making a will as soon as you have any dependents and/or assets which will need to be distributed after your death. In England, the minimum age for writing a will is 18.
I would certainly advise that if you have significant savings, own a property outright or have a mortgage on a home, then you should consider making a will and sparing your loved ones the heartache and stress of having to pick up the pieces, should the worst happen.
A will writing professional advises what’s best to include in a will to suit your particular circumstances and wishes. However, it’s always a good idea to have some prior knowledge of what would normally be included, so you can plan your will effectively, in your own time.
Of course the first thing you need to think about when drawing up a will is who should get what. Among your assets, include property, cash, savings, pensions, policies, shares and all your personal possessions including jewellery and collections.
If you have children under 18, you certainly want to know that they’ll be well taken care of, should the worst happen. It’s never a pleasant subject, but it’s worth discussing arrangements both with the child if appropriate, and the selected and agreed guardian before including this in the will, too.
The person who will be in charge of ensuring that the wishes in your will are carried out and that everyone receives what they should is known as the executor. You can choose who should take on that role (remembering that it’s always best to ask beforehand).
If you make your will well in advance, your advisor may be able to help you find ways now to minimise the amount of inheritance tax which will eventually fall due on your estate. These could include gifts and transfers.
Once you’ve made your will, you should be advised to change it every three years or so, to reflect any change in circumstances. This must be done formally through either a codicil or preparing a new will altogether, signed and witnessed. Simple additions in pen or strikethroughs will not be classed as official and will be ignored.
Admittedly, a somewhat depressing title for a blog, but it seems that following research carried out by insurance provider Scottish Provident, it has found that half of the claims it received for life insurance in 2011 were for deceased individuals, aged under 55 years old.
Almost £42 million was paid out to deceased clients’ families, with the average age of the deceased person being only 56 and the average claim totalling around £84,744.
Just under 20 percent of its clients were aged 44 or under, with almost one third being aged between 45 and 54 years old when they died.
This serves as stark warning to those who have put off preparing a Will as they feel they are “too young”. If Scottish Provident’s research is anything to go by, you have only 50 percent chance of reaching 55.
Don’t take any chances. Make sure you prepare your Will today.