Types of Power of Attorney UK

Types of Power of Attorney UK

There are four legal instruments that might be said to fall into this category (“Types of Power of Attorney UK”).

In the context of estate planning, these are:

  • General Power of Attorney. A short document requiring no special registration.
  • Health and Welfare Lasting Power of Attorney. A document issued by the Office of the Public Guardian, permitting attorneys to make decisions around health and care.
  • Property and Finance Lasting Power of Attorney. Also issued by the Office of the Public Guardian and dealing with financial matters.
  • Enduring Power of Attorney. A forerunner of the Lasting Power of Attorney.

 

Before going on I’d like to share a couple of important definitions. A ‘Donor’ is the person making the power of attorney i.e. the one giving the power, to act on their behalf, to another. An ‘Attorney’ is the one who acts on the donor’s behalf, under powers conferred by a Power of Attorney.

Selection of the appropriate document will depend on its intended application. Where a straightforward instrument, allowing an attorney to act on a donor’s behalf for practical reasons, is required e.g. the donor is going away for a period of time and needs someone to sign documents for them on short notice, a general power of attorney may suffice. This is a quick document to prepare. Critically, however, it can ONLY be applied where the donor has mental capacity, so is of limited use for long term planning.

 

Types of Power of Attorney UK: Mental Capacity

Where attorneys’ powers are to persist after the donor has lost mental capacity, a Lasting Power of Attorney should be made.

The Property and Finance Lasting Power of Attorney, grants to attorneys, powers to act in financial matters for the donor. Critically (if so drafted), it may be used either BEFORE the donor has lost mental capacity or afterwards.

The Health and Welfare Power of attorney allows attorneys to make decisions around health and care and can ONLY be used when the donor has lost mental capacity. This document may deal with decisions such as ongoing life support.

The Enduring Power of Attorney confers similar powers to those laid out in the Property and Finance Lasting Power of Attorney. This document, whilst still in circulation, is no longer available de novo, with no new Enduring Powers of Attorney issued after 2007.

 

The process of putting a Lasting Power of Attorney in place is somewhat laborious (albeit streamlining steps have been taken), and may take 3-6 months to complete (including registration and issue of the document by the Office of the Public Guardian).

Lasting Power of Attorney application forms must be completed correctly (there were more than 20,000 documents rejected last year). A professional will charge a few hundred pounds to draft these on your behalf, we believe this money well spent.

If a donor loses mental capacity BEFORE applying for a Lasting Power of Attorney, put simply, it is too late. In this case, a ‘Deputyship’ must be applied for through the Court of Protection. This process may take more than a year (during which time assets may be frozen) and may cost several thousand pounds (ongoing fees also apply) – it is estimated that the cost of applying for a deputyship is twelve-fold greater, than that of applying for a Lasting Power of Attorney professionally.

There is no next of kin in English law. If you have someone who you trust to perform the role, do not delay in creating a Lasting Power of Attorney, far too few people have them!

If you’d like to know more, please visit our website (www.confidencewills.co.uk) and book a free consultation now.

How much does a discretionary trust will cost?

How much does a discretionary trust will cost?

How much does a discretionary trust will cost?

Answers to the question “how much does a discretionary will cost?” may range from: “a few hundred pounds” to “the right to live in a family home”. Put another way, whilst there are certainly reasons to consider use of these instruments, there are reasons for caution too and alternatives which might be preferable.

 

  • A will plus a discretionary trust may cost in the £4-700 range
  • Caution should be exercised with discretionary trusts, particularly in the light of changes to tax law.
  • Beneficiaries do NOT have an absolute right to assets held in a discretionary trust.

 

A trust is a means by which an asset is legally held by one or more parties (the trustees), for the benefit of one or more others (the beneficiaries). Thus, legal and beneficial ownership are separated.

Named beneficiaries’ rights to the contents of a discretionary trust are entirely at the discretion of the trustees.

This point really can’t be overemphasised. Beneficiaries of a discretionary trust have no legal right to anything held by that trust, only the hope of so attaining. Moreover, one cannot usually direct trustees’ actions via a will. Guidance may be given to trustees by letters of wishes; however, these are necessarily, legally non-binding, and trustees need not disclose this guidance to beneficiaries, nor need they explain their reasons for making decisions.

This is quite-different to other will based trusts, such as Life Interest Trusts or Protective Property Trusts, by which beneficiaries have certain absolute rights in law, for instance, that to live in a house, or to receive income from a portfolio of investments.

 

How much does a discretionary trust will cost? Cost v benefit.

From a taxation perspective, the discretionary trust is treated, as an entity, completely independent of any of its beneficiaries. As such, it is not included in any future inheritance tax (“IHT”) calculation undertaken with respect to those beneficiaries. Since such trusts may persist for up to 125 years, this presents an opportunity for IHT planning across generations.

Treatment of the discretionary trust as a completely separate entity, however, means that certain (comparatively recent) IHT exemptions, such as the Resident’s Nil Rate Band and the Spousal Exemption, may be lost when such a trust is used.

From a non-tax perspective, discretionary trusts, offer the potential for trustees to respond to the changing situation and needs of a beneficiary on an ongoing basis and through life (as opposed to a bereaved minor/young person’s trust which must be wound up when a beneficiary reaches a certain age). By extension, they may be useful where beneficiaries might be ‘harmed’ by receipt of a significant amount of money e.g. in cases of drug or alcohol abuse. They may further be useful in protecting beneficiaries from loss in divorce or bankruptcy.

Assets in a discretionary trust fund are not taken into account for means testing with respect to benefits or care home fees, so they offer a means by which to preserve such benefits or to protect them from seizure by local authorities. In the case of care home fees, and in the context of ‘spousal exemption’, a protective property trust might be preferable, however.

If you’d like to discuss any of the issues raised, contact us via www.confidencewills.co.uk for a no obligation chat.

 

 

 

 

 

How to get power of attorney for an elderly parent with dementia?

How to get power of attorney for an elderly parent with dementia

If you find yourself asking questions like “how to get power of attorney for elderly parent with dementia?” it may already be too late! Swift action may prove critical to the well being of your loved one. Get in touch with Confidence Wills (www.confidencewills.co.uk) or an alternative advisor IMMEDIATELY if you are in this position!

 

  • You can only create a Lasting Power of Attorney if you have mental capacity.
  • The alternative to a Lasting Power of Attorney is a ‘Deputyship’.
  • Mental capacity in dementia patients often fluctuates.

 

The term ‘Power of Attorney’, in the context of the above question, refers to documents called ‘Lasting Powers of Attorney’.

Briefly, there are two types of Lasting Power of Attorney (“LPA”): the ‘Health and Welfare’ LPA and the ‘Property and financial affairs’ LPA. Both allow a ‘Donor’ to appoint ‘Attorneys’ to act on their behalf should they lose mental capacity.

The ‘Property and Financial Affairs’ LPA permits your attorneys to make decisions about the management of your money and property. The ‘Health and Welfare’ LPA permits your attorney to e.g. make decisions around ‘life sustaining treatments’ or to give consents for medical interventions.

 

How to get power of attorney for elderly parent with dementia? Mental Capacity is Key!

Lasting Powers of Attorney can only be attained for those who have mental capacity at time of application.

Where a party lacks mental capacity a ‘Deputyship’ must be sought, via the courts. Pursuit of a deputyship is much more protracted, costly and onerous (in terms of monitoring/reporting requirements) than an LPA.

If there is doubt about mental capacity you should seek an assessment from a professional assessor. An assessor will typically gauge mental capacity via testing.

Should the assessor feel the applicant to have mental capacity they will so state on the client’s LPA application, however, if they do not, they will often instead complete a ‘COP3’ form, stating a lack of capacity and permitting pursuit of Deputyship through the courts.

Notwithstanding the role of professional assessors, there are certain points regarding mental capacity, in the context of LPAs, which it is important for the loved ones of those seeking these valuable documents, to understand.

  1. Capacity is time specific and may fluctuate. Different types of dementia tend to be associated with different patterns of lucidity. Vascular dementia may feature weeks of clarity on a patient’s part, interspersed with confusion, Alzheimer’s patients’ cognitive status may rise and decline on a 24 hour cycle. The time of engagement, with respect to completion of any LPA application, may be critical.

 

  1. Capacity is task specific. Giving an instruction to make an LPA is a single, time bound event. The applicant need only have capacity whilst giving the instruction. Further, said capacity need only be in relation to issues falling within the scope of the instruction.

 

  1. The use of a professional (such as Confidence Wills) is strongly advised. Registration of an LPA may take months, an error in the application may take weeks or months to detect and correct, by which time the applicant may have deteriorated (more than 20,000 LPA applications were rejected last year). Moreover, with respect to mental capacity, it’s not unknown for a professional’s contemporaneous records to override post-hoc medical opinions (e.g. Burgess v Hawes 2013).

To re-state, if a relative has suspected dementia and lacks a Lasting Power of Attorney, act now!  Contact us via www.confidencewills.co.uk for a no obligation chat.

 

Why do I need a last will and testament?

Why do I need a last will and testament?

The answer to the question: “why do I need a last will and testament?” may be as broad as: “because there are people I want to care for when I die”. The implications of failing to consider the question, however, maybe complex and far reaching.

  • To ensure your estate passes to those you care most about.
  • To mitigate financial risks from tax or care fees.
  • To reduce conflict and ensure your children are cared for by trusted parties.

Making a will is something that nobody wants to think about yet the lack of one, when the time comes, can be catastrophic! Without one, people expose themselves, unnecessarily, to risks including (but not limited to): assets passing to the wrong people (or even the Crown), their children entering care (in situations where no guardian has been appointed), residential care fee payment, unnecessary taxation and ultimately failure to look after their loved ones.

It is often only in a moment of crisis (will writing enquiries more than doubled in periods during the Covid crisis) that people are moved to act, this may be too late. It’s thought that around thirty million people in the UK lack an up-to-date document. I urge you to act now to protect those you love.

 

Why do I need a last will and testament? Consider the numbers!

40% is the current UK Inheritance Tax rate, payable on death. Exemptions (more accurately nil rate bandings) are not applied automatically, are directly affected by the manner in which gifts are given in a will and may be significantly impaired in the absence of a properly drafted document.

£41,600 is the average annual cost of nursing home care, payable in life. Simple and inexpensive changes to a will, can protect your property from seizure by local authorities for payment of care fees. Similar mechanisms can be used to prevent your property’s being lost to a new family, should your partner or spouse remarry after death.

£48 million was seized by the Crown under intestacy rules last year. If there is no will, intestacy law applies, seeking to distribute your estate amongst family members. Such law includes a comparatively narrow group of direct relations. If none can be identified, assets may pass to the Crown.

£150,000 is the average cost of a court challenge to a will and 8,000 people attempted to block a will in 2019. The reality is that people are becoming increasingly litigious when they feel poorly treated by a will. Challenges tend to surge in times of economic hardship such as recessions. Proper advice can greatly reduce the risk of challenge.

Something that is perhaps overlooked when considering the impact of lack of a will, is the potential for conflict to arise in its absence. I hold that around half of the benefits of having a will relate to its capacity to reduce friction between those who love you after you pass.

No-one feels ‘normal’ when recently bereaved and yet it is often onto the most bewildered and dislocated, that the administrative burden of distributing property falls. Should argument erupt over who should receive certain (often comparatively low value) items, antagonists tend to view one another as almost infinitely ‘small minded’ in the context of their recent loss. I’ve known families to fracture over items as trivial as a clock or some jewellery.

If you have nothing in place, I encourage you to get in touch for a no obligation conversation. You’ve nothing to lose and everything to gain. Book now at www.confidencewills.co.uk

Is a last will and testament legally binding UK?

Is a last will and testament legally binding UK

 

  • A will is arguably the only reliable means of distributing an estate on death.
  • To be valid a will must meet certain criteria.
  • Only the original will usually carries any legal weight (copies do not).
  • Even where a will is valid, gifts within it may themselves fail.

I would assert that a last will and testament is the only reliable means by which a testator (one making a will) may reliably exert agency as to what is to happen to their estate on death.

Whilst other means of passing property exist e.g. death bed gifts, it would, in my view be a brave individual who relied on such an approach (in such ‘death bed’ instances a particular type of will, which gives a great deal of flexibility to those trusted by the dying, might be preferable to ‘donatio mortis causa’).

For the avoidance of doubt, only the original version of a last will and testament carries any legal weight. There exists provision in English law, for an individual to rip up a will and to so revoke it. In order to give effect to this law, if an original document (bearing wet signatures) cannot be found, this is assumed to have taken place and the will revoked, unless it can be proven otherwise.

Assuming an original will can be located, it must meet certain criteria in order to be legally valid, these include, but are not limited to:

  1. The document has been drafted correctly.
  2. The document has been executed and witnessed correctly.
  3. The document has not been lost, destroyed or mutilated in such way as to revoke it.
  4. The person making the will had mental capacity to do so at the time.
  5. The person making the will was not subject to undue influence from a third party.
  6. The person making the will was over 18 years of age.

In the absence of a valid will, intestacy law may apply, this legislation deals with the distribution of assets to family members in the event that no valid document is produced. The manner in which these are distributed is summarised in the diagram included (taken from Confidence Wills guidance document 2020).

It’s worth clarifying that even though a last will and testament may be valid, gifts set out therein, may themselves fail for a number of reasons. These include (but not limited to):

  1. A beneficiary (or spouse/civil partner thereof) has witnessed the will.
  2. The gift is to a spouse/civil partner with whom divorce or dissolution has taken place.
  3. The beneficiary has pre-deceased the testator (lapse).
  4. Property or assets gifted by the will do not form part of the testator’s estate (ademption).
  5. There are not enough assets in the estate to settle all the gifts of the will (abatement).
  6. The gift is not clearly enough described in the will (uncertainty).
  7. Unlawful killing. If a beneficiary unlawfully kills a testator, they may not benefit (unless insane!).
  8. Disclaimer, beneficiaries may simply refuse to accept a gift.

 

There are innumerable other challenges which might arise in the creation and application of a last will and testament e.g. lack of clarity over what constitutes the testator’s estate. It is critical that anyone considering making a will seeks professional advice from a regulated will writer. For the avoidance of doubt, the foregoing article refers only to wills made in England and Wales.

If you would like to learn more about any of the issues described here, visit Confidence Wills now at www.confidencewills.co.uk and book a free consultation.

Why do I need a trust if I have a will?

Why Do I Need A Trust If I Have A Will

Why do I need a trust if I have a will?

  • A will allows you to give your estate away when you die.
  • Trusts separate the legal and beneficial ownership of assets.
  • Combined, will based trusts, allow you to protect those you care for very effectively.

 

The functions of trusts and wills are fundamentally different in nature.

A will directs assets, which form part of your estate, to named beneficiaries, when you die.

Your ‘estate’ includes everything that you both legally and beneficially own. In broad terms, this means everything that is both documented as belonging to you, and which you are entitled to enjoy.

Examples of items that you might so own are: houses, money, cars etc.

Gifts in your will might include wording such as “I give any car which belongs to me at the time of my death, to my son, David.” The effect of this direction is self-evident. Items such as your car may be yours both legally (the car is in your name) and beneficially (you are free to drive the car).

In explaining the function of trusts, it is useful to look at things to which you have a relationship, but which do not form part of your estate for the purposes of a will. Such items might include a pension, or money which you hold on trust for someone else.

These items highlight the power of a trust to separate legal and beneficial ownership. In the case of your pension, it is legally owned by the pension’s trustee. You, however, are entitled to benefit from the pension. The beneficial rights sit with you.

In the case of money held, by you, on trust for someone else. The money might rest in your bank account i.e. legal ownership might reside with you, but you owe an obligation to those for whom you hold it on trust, to apply it only to their benefit. Beneficial rights sit with them.

Trusts and wills converge in ‘will based trusts’. Will based trusts are legal instruments written into wills, which trigger the creation of a trust on the death of the testator (the person making the will). These trusts, once created, are capable of receiving gifts, directed into them by your will.

They are usually used, where a testator feels them protective of the mid/long term interests of those he/she wishes to care for through their will.

The two examples below give a brief overview of how they achieve this protective effect.

Example 1. Mr and Mrs Smith are a couple in their thirties, they’ve two children and each own half of the home in which they live. They are both concerned that, should they die, their spouse will remarry and their respective interests in the house will be lost to a new partner or family. To protect against this, rather than leaving their interests in the house to one another, they leave legal ownership of the house to a trust (a ‘Property Protective Trust’). This trust allows their spouse to live in and benefit from the house whilst still alive, but ensures its passage to their children on second death.

Example 2. Mr Jones is wealthy and widowed. He wishes his only son, James, to benefit from his estate on his death, however, he is concerned that his son James’ marriage has deteriorated and, whilst no irrevocable steps have been taken towards its dissolution, Mr Jones, does not wish his hard-earned fortune lost, should rapacious divorce lawyers become involved in the future. With this in mind, Mr Jones leaves his estate to a ‘discretionary trust’, naming his son a beneficiary. This instrument places legal ownership of the estate with named trustees who can be given guidance to benefit James, whilst having an eye to his financial protection should divorce take place.

Trusts are used a great deal in wills to look after the slightly longer terms interests of those you care about. Confidence Wills are experts on will based trusts. If you’d like to learn more, please contact us now by going to www.confidencewills.co.uk and booking a free consultation.

 

Is it Best to Put a Will in a Storage Unit?

Is it Best to Put a Will in a Storage Unit?

Is it Best to Put a Will in a Storage Unit?

 

  • Only an original, properly signed will, carries legal weight, it must be protected.
  • If a will is in the possession of the person making it, and is lost, it is assumed to be revoked.
  • Storage so protects against wilful destruction and defacement of documents.

 

Only an original, signed will carries any legal weight. There is a physicality to the document to which we are unused and which seems at odds with modern technology. The risk of harm coming to this crucial, yet fragile item whose life may extend over decades, is significant. We strongly advocate the use of professional storage units as a cost-effective means of reducing risk.

The use of a storage facility protects the will against (non-exhaustively):

  1. Accidental destruction.
  2. Accidental loss.
  3. Wilful destruction.
  4. Defacement.

 

Accidental destruction of a will

A will may be revoked on destruction, by the testator. If a will is in the possession of the deceased and is lost or destroyed, it is presumed to have been ripped up with the intention of revoking it.

Notwithstanding, innumerable factors may result in a document’s accidental destruction, for example: damp, fire, moving house, insect larvae, flooding, young children or pets. Such harm may go unnoticed in the years separating creation and application.

Where a will is accidentally destroyed, it is up to those seeking to benefit to show that its destruction was the result of an accident, and that there was no intent to revoke. This is difficult and potentially impossible.

By keeping the will in a professional storage unit, the testator protects themselves from accidental destruction in three ways.

Firstly, the will is stored in fire and water proof materials, physically reducing the risk of accidental destruction. Secondly, professional storage units retain digital copies of documents and records of clients’ access thereto. Thus, they are able to demonstrate that documents were not in the possession of clients at time of destruction, supporting the case for the use of copies. Thirdly, in the unlikely event that the will cannot be enforced, such entities carry insurance (usually several million pounds), to compensate harmed parties.

 

Accidental loss of a will

Will are regularly lost and assumed revoked. They are lost in house moves, clear outs and simply as a consequence of disorder’s tendency to increase over time. Even if all documentation relating to the will’s storage, and all those present at the making of the will are lost central databases, of documents held in storage facilities, can be searched during probate to locate the document.

 

Defacement of the will

A mutilated will may be deemed revoked. Various degrees of ‘scribbling’ or ‘striking out’ have been found to revoke or not to revoke elements of the will. If a young child finds the document or even a mischievous party who stands to gain, chaos may be wrought! Conversely, well-meaning folk, seeking to organise matters may attach an associated document like a deed or letter to the will. Many are surprised to learn that even this may be catastrophic and lead to revocation. Retention away from the home vastly reduces the risk of such interference.

 

Wilful disposition of the will

On death, many may gather at the house of the deceased. It is not unheard of for parties who stand to benefit from intestacy or a previous document, to seek out a will and destroy it. A key protective function of professional storage units is their restriction of those who’ve access to documents.

The above is not exhaustive. We hold that the use of professional storage units is in the interests of all concerned.

If you’d like to discuss any of the matters raised above, please contact Confidence Wills. You can book a free consultation at www.confidencewills.co.uk.

Why do I need a will and a trust?

Why do I need a will and a trust
  • To ensure that your estate ends up with those you care about
  • To ensure your property is not lost in the event your spouse remarries
  • To insulate your estate from care fees and other creditors

 

I shall restrict my answer to consideration of ‘will based trusts’ (as opposed to lifetime trusts), and within that sphere, to one category of trust, being that to which the above question most often (though by no means exclusively) relates in my experience: the ‘life interest’ trust. For the avoidance of doubt, this article does not address issues relating to discretionary or vulnerable persons’ trusts.

Trusts have been a feature of English law for many centuries. Their core function is to separate legal and beneficial ownership. Will based trusts come about when a will is activated (on death of a testator – they do not exist from the moment the will is executed). In a sense they allow one to define a wholly new beneficiary in their will and, by this means, exert some degree of control/protection over assets for a period after death.

Perhaps the most common type of trust seen in modern wills are ‘life interest trusts’. As the name suggests these instruments allow the individual making the will to give a ‘life interest’ to someone (known as ‘the life tenant’) whilst retaining some agency over the final destination of the asset. A ‘life interest’ describes an ongoing benefit to the life tenant e.g. the right to live in a house (or to sell it and hold a new property on trust) which persists only while the life tenant lives.

By way of an example, ‘Mr’ and ‘Mrs’, a couple in their early fifties, own a substantial home. Should either pass, each wants the other to be able to live in the family home until their own death, however, they have worked hard to build up their estate and are keen that their son should receive the property, when the second of them passes. In particular, both wish to prevent their son’s losing out, in the event the surviving spouse should re-marry or be required to part or wholly fund their care in later life.

With this in mind, their will is drafted such that, instead of passing their respective interests in the family home to one another on first death, they instead pass them to a life interest trust (sometimes known as a Protective Property Trust, when it relates to a home).

To illustrate the usefulness of such a trust, let us consider the two situations feared by the couple described, and compare what might happen in the presence and absence of a life interest trust.

  1. Remarriage. Mr passes away, in the absence of a Protective Property Trust, his interest in the family home passes to Mrs. After a period of grieving, Mrs remarries. Mrs passes away soon afterwards, without having made a new will.

In this situation, Mrs, has died ‘intestate’. Her original will was revoked in law when she remarried. Under intestacy rules her entire house may now pass to her new husband. This situation, which is not only common, but which often arises without intent on the part of the deceased, is called ‘sideways disinheritance’. Had Mr used a Protective Property Trust in his will, his half of the house would have passed to the trust on his passing and from there to his son on the death of Mrs.

  1. Residential care. Mr passes away, Mrs is placed in residential care. Local authorities seek to fund her care through the sale of her assets. Where no Protective Property Trust has been used in either will, Mrs will take ownership of Mr’s interest in their family home, on his death. As such the entire property is exposed to an erosion in value by virtue of Mrs’s care home fees.

Had Mr used a Protective Property Trust in his will, his half of the house would have entered the trust on his passing, shielding it from charges. In practice, a much more significant portion of the estate’s value may be protected because ‘half a property’ lacks financial value.

It is crucial that arrangements such as those described, are properly established by a licensed and insured firm. Confidence Wills offer a high quality and affordable service, if you’d like any more information, please get in touch now at info@confidencewills.co.uk or visit our website at www.confidencewills.co.uk.

What power does an executor of a will have in the UK?

What power does an executor of a will have in the UK
  • Executors have a wide range of powers and responsibilities.
  • They owe a duty of care to beneficiaries.
  • Under limited circumstances, they may vary or withhold gifts.

 

An executor can only be appointed by a will (otherwise an ‘administrator’ is installed by the courts).

The responsibilities of the executor are quite wide-ranging, and the powers conferred on them commensurately so too. It’s recommended that someone trusted and willing is appointed to the role as the workload might be significant.

The chief tasks which the executor must complete are (non-exhaustively):

  • Registration of death and attainment of Grant of Probate.
  • Identification of those named in the will.
  • Identification and securing of the deceased’s assets.
  • The organisation of funeral.
  • Notification of institutions such as HMRC, banks, mortgage providers etc.
  • Valuation of the estate and associated accounting.
  • Calculation and payment of inheritance taxes.
  • Distribution of assets in line with the will.
  • Locating creditors and settling debts.

 

Significant powers are required to carry out the above tasks. The wording of the will has material bearing on powers conferred on executors, however, those commonly seen include:

  • Manage the deceased’s assets over the course of distribution to beneficiaries.
  • Powers to access the deceased’s bank accounts and other financial documents.
  • Power to calculate and settle debts.
  • Powers to hold assets on trust for minors until they come of age.
  • Power and responsibility for the application of capital to the maintenance of any for whom money is held on trust.

 

Two of the lesser-known powers that executors may exert are:

  1. The ability to change a will’s contents and
  2. The power to withhold gifts from a beneficiary.

 

Each of the above may only be applied in a very specific set of circumstances. With respect to ‘1’, a will may be varied only with the consent of beneficiaries. It is not vanishingly rare for this to take place and the most common reason for the variation in the management and reduction of tax payable e.g. inheritance tax.

The scenarios in which money might be withheld from beneficiaries are limited but include:

  1. Situations in which unspecified debtors come forward. In such cases, settlement of the will may be delayed by up to 6 months as this situation is resolved.

 

  1. Where there are safety concerns. In the case of a child, these are likely to be around parental issues, in which case settlement may be withheld until the child reaches 18. In the case of an adult, concerns over issues such as addiction or mental capacity may lead to a beneficiary’s gift passing into a trust established for their protection.

The above powers are significant but so is the potential liability of the executor. Probate may take 9-12 months to complete, during this time, executors owe a statutory duty (2000 Trustee Act) to carry out their duties with due skill and care. They are required to act in the best interests of the beneficiaries of the will and to not harm the estate in any way. Executors must keep detailed records of all transactions relating to their function and be prepared to produce them if challenged.

Crucially, the executor’s duty of care does not disappear once probate is complete, should a creditor, for example, challenge or bring a claim against the estate after it has been distributed, the executor may be found liable and be required to settle damages from their own resources.

 

If you wish to discuss any of the issues raised or to find out more, call Confidence Wills now on 0121 202 4714 or visit us at www.confidencewills.co.uk.

 

WHO CAN BE AN EXECUTOR OF A WILL?

WHO CAN BE AN EXECUTOR OF A WILL
  • Anyone over the age of 18 and of sound mind can act as an executor
  • Executors are often beneficiaries of a will
  • Many opt for a professional executor, although costs vary

 

An Executor is the person named in your will who, will be responsible for ensuring that your estate is organised and distributed in accordance with the document.

Any one over the age of 18 and of sound mind can be an Executor.  Executors can also be beneficiaries. An Executor can be a witness of your will as long as neither they nor their spouse are also a beneficiary.

Many people choose their spouse, partner or adult children to be their executors, these being people who are familiar with your affairs. This of course isn’t always possible or even desirable, in which case, you may select a close friend or relative whom you think suitable. When appointing one from outside your immediate circle, a small monetary gift, contingent on their performing the role, is sometimes given.

Some choose a professional executor such as a Solicitor or Accountant etc. who would normally charge a fee. It is important to enquire as to their terms of engagement and fees, in advance of instructing them, to make sure they are acceptable to you.

The Executors you choose don’t have to be professionally qualified, if they need professional help with financial or legal aspects of the work, they can always seek this at the time.

There can be quite a lot of work involved in executing a will and it is worth asking potential Executors if they would be prepared to undertake the task. Consider discussing your estate’s complexity with them so that they can decide if they are prepared to act for you, when the time comes.

Tasks which fall to executors include (non-exhaustively):

  • Obtaining proof of all your assets such as bank accounts, insurance policies and property ownership. If you own a property overseas, for instance, this may involve significant extra work.
  • Obtaining valuations of all your personal assets such as heirlooms, jewellery, cars, caravans, boats and property etc.
  • If you are a property owner in the UK and/or overseas, instructing agents to sell the property after having obtained several valuations (always a good idea to get more than one!) is required.
  • Dealing with your financial affairs, such as outstanding debts, mortgages etc.
  • Liaising with the HMRC to ensure correct calculation of Inheritance tax Liabilities (this can be particularly onerous in the case of larger estates).

 

 

These are just some aspects of the job, it is important to choose someone you can rely on to execute your will in an efficient and sensitive manner and most of all who you can trust.

You can have up to four Executors but it’s worth remembering that they must work jointly and the more you have, the more difficult it may be for them all to co-ordinate and agree. Many choose to have one or two executors, so as to minimise logistical challenges. You can appoint ‘reserve executors’ to act in the event that one or more of those you appoint cannot fulfil their role.

 

If you’d like help with any aspect of probate or will writing, contact Confidence Wills now on 0121 202 4714 or visit us at www.confidencewills.co.uk and book a free consultation.