Wills and LPAs: a guide to effective estate planning
Linda Cummins, head of wills and probate at Goldsmith Williams, explains how effective
estate planning needn’t be daunting.
As life changes, and our responsibilities shift – such as when we buy property, get married or have children, and as we age – estate planning increases in relevance.
Deciding who will make decisions on our behalf if ill-health prevents us from making our own, or who should inherit our possessions when we’re gone, can bring up uncomfortable emotions. But don’t let that put you off taking the important steps to securing your loved ones’, and your own, future.
Why set up an LPA?
As we grow older, ensuring that a will or lasting power of attorney (LPA) is in place inevitably becomes more of a preoccupation. But LPAs are important for everyone.
Whatever your age, a serious accident or a sudden change in your health can affect your health irrevocably. If this happens and you don’t have an LPA set up, and are unable to manage your affairs, not even your spouse or partner has an automatic right or ability to take charge of your finances or determine your health care. Critical payments, such as energy bills, or your mortgage, could remain outstanding.
Putting an LPA in place enables your family to avoid the considerable expense and uncertainty of proceeding through a specialist court, which makes orders and appoints deputies to make decisions on behalf of those who are unable to (Court of Protection). With an LPA, you (the donor) are able to choose your own attorney.
A specialist solicitor can help you to set up an LPA and take you through estate planning options that are relevant to your set of circumstances.
There are two types of LPA:
- for property and financial affairs, giving the attorney authority to handle property and financial matters on behalf of the donor
- for health and welfare, which gives the attorney authority to make decisions relating to the needs of the donor, for example, how the donor is cared for and what health care they receive
Why do I need to have a will?
Dying without a will means that your estate is subject to the rules of intestacy. These rules set out who will manage, administer and inherit from your estate – typically your next of kin in a fixed order – meaning that some of your dependants may not be provided for as you would have wanted, and possessions may not end up with your loved ones.
Dealing with intestacy can be stressful for families. The rigid rules that in particular relate to family circumstances, such as stepchildren not being accommodated, can so often causes family rifts.
Critically, for anyone with children, putting a will in place allows you to appoint guardians and have your say in who would bring up your children, should you be unable to.
Writing a will with the help of a solicitor can be very straightforward. They’ll explain any legal jargon and make sure that the type of will satisfies your needs.
A single will is for one person (not just someone who is single), while couples wills are used when couples want to leave everything to each other. With couples wills, it’s usually the case that when the first partner dies, everything goes to the surviving partner, and then when the survivor dies, everything passes to their common beneficiaries. Business owners may need a more complex will, as would anyone who wanted to set up a trust, for example.
What about trusts?
A trust is a relationship whereby property is held by one party for the benefit of another. In simple terms, an example of a property protection trust that is set up in your will to protect your share in your property and the inheritance of loved ones, while ensuring your spouse or partner’s right to remain in the house for the rest of their life.
For information on other types of trust, a specialist solicitor can best explain how these can be used to meet your needs. The important thing is to realise that, rather than daunting, estate planning is a crucial part of securing your and your loved ones’ future, whatever may happen.
About the author
Linda Cummins is head of wills and probate at Goldsmith Williams Solicitors. A qualified solicitor of 13 years, and a qualified trust and estate practitioner of 11 years, Linda is a member of STEP and SFE.