Wills & Probate

So often after an initial interview questions arise that you wished you had asked. To try and overcome that problem we've put together answers to the most common questions asked of us. This is not an exhaustive list so if you are still unsure about any particular point, then please do not hesitate to ask.

If you need further help or assistance please contact angela.hickey@reeswoodterry.co.uk or telephone us on 029 20408809

Questions

• Why do I need a will?


• Should I be worried about Inheritance Tax?


• Do I need a solicitor to draw up my Will?


• Do I need a Lasting Power of Attorney?


• What happens if I do not have an LPA?


• What if I have an old style Enduring Power of Attorney?

Why do I need a Will?
A Will is the only document in which you can state exactly what you would like to happen to your estate after your death. Your estate consists of everything and anything you own at the date of your death including your house, cash, investments, shares, car, household furniture, jewellery etc.

You may think you do not have enough in your estate to bother with making a Will, but if you die intestate (without a Will) the law will decide who receives your estate and this may not be the way in which you had wished your assets to be distributed.

If you are a cohabiting couple, you cannot inherit from each other without a Will. Cohabiting couples need to especially think about making sure they have a Will in place if you own property together as tenants in common (and not as beneficial joint tenants) as the half share of each owner does not pass automatically to the surviving co-owner and this share must be specifically gifted in a Will or the interest in the property will pass under the rules of intestacy. Even if you do own the property as beneficial joint tenants, if you have not left a Will leaving your estate or part of it to your partner this could have serious financial implications for them, as they will become liable for the whole amount of any mortgage that is on the property.

If you have separated or are going through a divorce, without a Will in place your estate will pass to your spouse or civil partner. Even if you have a Will that you made whilst you were married or in a civil partnership, before the divorce is finalised (a decree absolute issued) any gift to your spouse or civil partner will still be valid.

An important consideration is arrangements you would want in place if you have children under the age of 18 years (whether your married or not). Who would you want to care for them if you or both you and your partner died?

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Should I be worried about Inheritance Tax?
Inheritance Tax (IHT) is payable on your estate after your death. Tax is currently charged at a rate of 40% on anything you leave over the tax threshold - the Nil Rate Band. The nil rate band is currently £325,000.00.

There is no IHT payable on a gift left to a spouse or civil partner and any unused nil rate band can now be carried over and used by the surviving spouse or civil partner on second death.

It is worth remembering also that there is no IHT payable on gifts made to a charity.

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Do I need a solicitor to draw up my Will?
The simple answer is "No" and we are all aware that there are many DIY Will making kits on the market these days available on our high street or indeed on the Web.

However, Wills are best prepared by a professional who can ensure that you are properly advised and that all tax planning issues are considered before putting your wishes in writing. By seeking a professional's advice you will know that what you want to happen to your estate after your death will be possible and will take effect. Whereas a poorly written home made Will can cause problems after your death and sorting out misunderstandings and disputes as a result could cost your estate considerable legal costs, much more than paying for your Will to be drafted by a solicitor.

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Do I need a Lasting Power of Attorney
A Lasting Power of Attorney (LPA) is a legal document signed by you ("the donor") authorising someone you trust to act on your behalf ("the attorney(s)") in relation to your financial affairs and property.

In order to validly set up an LPA you must have the necessary mental capacity to understand the nature and effect of the document you are signing. Unlike a normal Power of Attorney an LPA is still effective if you later lose mental capacity and are no longer able to deal with your own affairs.

You can sign an LPA and allow your attorney(s) to deal with your property and finances immediately or, you can decide that you do not want the attorneys to have any control over your assets unless you have lost mental capacity and are no longer able to deal with matters yourself.

It is also possible to put in place separate Lasting Powers of Attorney which can cover social and care needs including decisions concerning life sustaining treatment. Lasting Powers of Attorney have to be registered before they can be used even if you still have your mental capacity.

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What happens if I do not have an LPA?
If you should lose mental capacity and are no longer able to deal with your financial affairs, no one will automatically have power to deal with them on your behalf.

In order to obtain the power to deal with your property and finances someone (usually your next of kin) will have to make an application to the Court of Protection to be appointed as your Deputy. This is a lengthy process as a number of forms will need to be completed by the potential Deputy before the Court will consider the application. Costs will also be incurred in making this application as a doctor's certificate will be required and the Court will want a commencement fee. Even after an application is approved, and an order is made appointing the Deputy, they will not be allowed to do anything they like but must obtain the direction of the Court. They will also have to produce annual accounts to the Court and pay an annual fee to the Court.

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What if I have an old style Enduring Power of Attorney?
As long as the Enduring Power of Attorney was fully completed and executed by you and your attorney(s) before the 30th day of September 2007 then the power is effective. It does not need to be registered by your attorney(s) until such time as you become mentally incapable. It does, however, remain limited to financial and property matters and cannot be extended to welfare and medical decisions.

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We hope that you have found this information helpful. If you do have any other questions then please do not hesitate to contact our offices.

Telephone us on 029 20408809

E mail us at angela.hickey@reeswoodterry.co.uk

Call at our offices - 9/11 St Andrews Crescent, Cardiff, CF10 3DG