- February 19, 2020
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Wills & Probate FAQs
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (“LPA”) is a document used to appoint another person or people to make decisions for you if you are unable to do so yourself. These people are known as “attorneys”. There are two types of LPA, one which relates to property and financial affairs and one which relates to health and welfare.
An LPA relating to property and financial affairs allows your attorneys to deal with your finances, for example to pay your bills, sell or buy property or investments and operate your bank accounts.
An LPA relating to health and welfare allows your attorneys to make decisions about matters such as your medical treatment, your diet, where you live and how you spend your time. There is also the option to give your attorneys the power to make decisions about life-sustaining treatment, but you do not have to give them this power.
What could happen if I don’t make a Lasting Power of Attorney?
If you don’t make an LPA while you have capacity and you lose capacity to make decisions for yourself or manage your finances then someone will need to make an application to be appointed as your Deputy. The process is more expensive and takes longer than making an LPA yourself, as someone is making the application on your behalf at the Court of Protection. The Court will take a number of factors into consideration when deciding if the person who has made the application is a suitable Deputy.
Why do I need a Will and what happens if I don’t have one?
By making a Will you can make sure your assets pass to the people (or charities) you want. You also appoint executors in a Will, that is, the people you want to deal with your estate. Broadly speaking, that involves applying for a Grant of Probate and settling any inheritance tax, setting liabilities and collecting in the assets (which could include selling property) and distributing the estate. If you do not have a Will, then your estate will be divided according to the intestacy rules.
How do I choose an executor?
It is important to choose executors carefully. It is advisable to appoint two executors (or more, but no more than four), or include a substitute appointment, should something happen to one of them before you and you don’t have a chance to change your Will. You should ensure the people you choose have the right skills to deal with the administration of your estate and are capable of dealing with paperwork. Dealing with an estate can be time consuming, and the process can take a long time, especially if there is property to sell or inheritance tax to pay. If executors make a mistake then they can incur personal liability, so you may wish to consider appointing a professional, such as solicitors. You can appoint Anthony Gold as your executors.
Is a Grant of Probate always required?
If the person who has died has assets in their sole name then a Grant will be required to collect these assets in order to distribute them under the terms of the Will or intestacy rules. A Grant may not be required if the estate only consists of jointly owned assets which pass automatically by survivorship or if there is only small amounts of cash in the deceased’s bank accounts. It is important to note there may still be inheritance tax to pay, even if the assets pass by survivorship.
What are the current rules on inheritance tax?
There isn’t any inheritance tax to pay on the first £325,000, the nil rate band. Anything over this is taxed at 40%. If you own a qualifying residence at the date of your death and this passes to direct descendants, such as children or grandchildren, then your estate will also benefit from the residence nil rate band. This is currently £150,000, but is increasing to £175,000 in April. Assets left to a spouse or civil partner are exempt from inheritance tax, and the nil rate band of the first spouse to die is carried forward to the second death, provided this is not used up on legacies or residue left to other beneficiaries. The residence nil rate band is also transferable between spouses.
*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*
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