Do I really need a Will?
No one needs to have a Will if they choose not to but this would be against the best advice of those involved in the legal profession and amongst Will writers. This is because if you do not have a valid Will your estate will be dealt with under the Intestacy Rules. This means that it could pass to people you may not wish to inherit it or it may go to people related to you that you don't know and perhaps have never even met. Further unintended consequences of the failure to make a Will include the fact that it can take longer to deal with your estate adding cost to the probate process, it can lead to disputes within your wider family and even risk claims being made against your estate by disappointed beneficiaries which in turn simply leads to unnecessary cost and angst.
Even if you are married or in a civil partnership you may wish to draft your Will in such a way as to protect your share of assets for your children after the death of the survivor of you. This may be more important in a case where you have entered into a new marriage or civil partnership and have children from a previous relationship who you wish to benefit at a later date.
Although there is no legal recognition of 'common law husband and wife' many of us now choose to live together but not get married or enter into a civil partnership. If you make no provision for your partner there is a chance that they could receive nothing at all and in certain circumstances would be advised to bring an action against your estate.
Making a Will allows you to decide exactly what happens to your assets when you die, and look after your loved ones whilst also reducing the risk of family fall-outs or large legal bills to put things right.
What is the difference between an Executor and a Trustee?
An Executor is the person that you appoint to act in the administration of your estate. Their duties will include collecting in your assets, settling any liabilities, obtaining a grant of probate, paying any taxes due and distributing your estate under the terms of your Will. Although technically it is possible to appoint more, the maximum number of Executors to whom probate will be granted is four. The more Executors that you appoint the more chance of dispute as to the best ways to administer your estate which can create more expense. We would normally therefore advise you to appoint two people who are over 18 (as probate cannot be granted to someone under the age of 18) that you trust and that you know can work together. Even though this is a personal appointment you should bear in mind that your Executors are able to appoint professionals to assist them in the administration of your estate. A beneficiary under your Will can act as an Executor should you wish them to do so. Alternatively frequent appointments include an independent family friend, a business colleague, a professional adviser or a trust corporation.
While it is common for people to appoint the same people to act as Trustees as Executors the roles are distinct and separate from each other. You do not have to appoint the same people to act in both roles if you do not wish to do so but for convenience it is often better to do so and as such it makes sense to make provision for your trustees to be the same people as those who obtain the grant of probate in their name. A trustee will hold any monies to be held in trust until a contingency mentioned in your Will comes to pass such as a child reaching the age of 21 or under the terms of any trust outlined in your Will.
What is jointly owned property?
There are some assets that you will be unable to deal with under the terms of your Will. These would include assets held in trust such as some life policies which are usually dealt with by trustees taking into account any nominated beneficiary form but it would also include assets that you own jointly with another. Examples include your home and other property if it is owned as joint tenants, such as a joint bank account. This is because in law the right of survivorship is deemed to apply and as such the 50% of the first to die will automatically vest in the surviving co-owner no matter what the terms of your Will might be. If this is not what you would want to happen then you can choose to 'sever' your joint tenancy which will leave you free to pass your share of the joint asset to anyone you wish to receive it, under the terms of your Will.
What is a Declaration of Trust?
Sometimes property can be held jointly but not necessarily in 50:50 shares. In these cases the owners can enter into a binding agreement that the beneficial ownership will not be equal, but will be in different percentages depending on their agreement. The best example of this is a couple who, when buying a property together, have made different contributions to it as is often the case when buying property during the course of a new relationship. The document that formalises what shares the property is to be held in is called a Declaration of Trust. This document sets out how the property is held, for example 60%/40%, but it also makes provision for how to deal with any uplift or drop in the value of the property should it have to be sold. It is therefore a very useful document to protect different levels of contributions or to show where parents have provided funds towards a deposit.
Do I need a Lasting Power of Attorney?
In most cases it would be advisable to consider entering into what is known as a Lasting Power of Attorney. There are two types of Lasting Power. One deals with your property and financial affairs and one deals with questions relating to your health and welfare. In both cases you will need to appoint one or more attorneys to act on your behalf and you will need to decide, when appointing more than one, whether you wish for them to act together when making decisions on your behalf or whether they can make decisions independently of each other. The issue with appointing attorneys to act for you jointly is the risk of possible impasse if the attorneys cannot agree the best way forward, moreover if one of them should die or go bankrupt then the whole power would fail as joint decision making would no longer be possible.
A Lasting Power can give your attorneys the right to act on your behalf should you lose mental capacity or find yourself incapcitated for a short while due to unexpected illness. In the event that the worst was to happen and you did not have Lasting Powers in place those closest to you may have to make an expensive application to the Court of Protection to be appointed as your Deputies which are in effect court appointed attorneys. This is an extremely lengthy and costly court process and usually means there is a period in which no one has any rights to act on your behalf.
Within a health and welfare Lasting Power you can decide whether you wish for your attorneys to be given the right to give consent to, or to refuse, life sustaining treatment should the worst happen. While a property and financial affairs attorneyship can be used immediately should you wish it to be so the health and welfare attorneyship cannot be used until it can be shown that you have lost capacity. This is important as this power allows your attorneys to make all the decisions that you would have made for yourself in relation to such things as where you live, what you wear, who you see etc. and therefore as long as you are able to make these decisions, no one should be making them for you.
There is guidance given to your attorneys under the Mental Capacity Act and they should have recourse to this in order to ensure that they are always acting in your best interests.
What is a Deed of Variation?
You may have heard friends and relatives who have stood to benefit under the terms of a Will say that they chose to vary the terms of the Will to benefit another person, for example, their children. In essence you can choose to give up some or all of the assets that you were due to inherit. The ability to vary the distribution of assets under a Will can only be achieved within two years of the death of the person who made the Will. Such variations are most often used to help save tax for the person agreeing to have their share of the assets changed but it is important to note only adults of full mental capacity can enter into such an arrangement. It should be said that the same rule applies to those who may have benefitted under the Intestacy Rules, so where someone has died without a Will.