Preparing your Affairs for the Future

Planning for the future is essential to ensure that your affairs are managed according to your wishes, both during your lifetime and after your passing.

Key components of this planning include creating a Will, having a Lasting Power of Attorney (LPA) in place, understanding the Probate process, and being aware of the role of the Court of Protection. You may also want to consider seeking legal advice for inheritance tax planning purposes and trusts.

In this article, we provide an overview of these aspects to help you prepare effectively.

A Will is a legal document that outlines how your assets and affairs should be handled after your death. It allows you to specify beneficiaries, appoint executors to manage your estate, and, if applicable, designate guardians for minor children.

If you have a Will, check that it’s up to date and still suits your wishes and circumstances. Have you bought a house, got married or divorced, had children, suffered a bereavement, or faced another big life change? These are all events that could impact your wishes for the future, so it is important that your Will is up to date and reflects this and, in the case of marriage, could revoke your previous Will.

If you don’t have a Will, you should seriously consider putting one in place, as without a valid Will, your estate will be distributed according to the rules of intestacy, which may not align with your personal wishes. Therefore, creating a Will is a fundamental step in future planning.

An LPA is a legal document that enables you to appoint one or more individuals (known as attorneys) to make decisions on your behalf if you lose mental capacity or no longer wish to make decisions for yourself. There are two types of LPAs:

Property and Financial Affairs LPA: This allows your attorney to make decisions about your financial matters, such as managing bank accounts, paying bills, and buying or selling property.

Health and Welfare LPA: This permits your attorney to make decisions regarding your personal health and welfare, including medical treatment and living arrangements.

Establishing an LPA ensures that trusted individuals will then be able to act for you immediately and can manage your affairs in accordance with your preferences, should you become unable to do so. Without an LPA, your loved ones might need to apply to the Court of Protection to gain the authority to act on your behalf, which can be a lengthy and costly process.

The Court of Protection is a specialist court that makes decisions on financial or welfare matters for individuals who lack the mental capacity to make decisions themselves. Its responsibilities include:

• Appointing Deputies: If someone loses mental capacity without having an LPA in place, the court can appoint a deputy to make financial decisions on their behalf.
• Making Specific Decisions: The court can make one-off decisions about a person’s property, financial affairs, or personal welfare.
• Handling Disputes: The court resolves disputes about decisions made under an LPA or by a deputy.

Engaging with the Court of Protection can be time-consuming and expensive. Therefore, setting up a lasting power of attorney in advance is advisable to ensure that your affairs are managed by individuals you trust, without the need for court intervention.

Probate is the legal process of administering a deceased person’s estate, ensuring that debts are paid and assets are distributed to the rightful beneficiaries. If the deceased left a valid Will, the executor named in the Will applies for a Grant of Probate, which confirms their authority to manage the estate. If there is no Will, an administrator is appointed, and they apply for Letters of Administration to handle the estate.

It’s important to note that not all estates require probate. For instance, if the estate has accounts with less than around £10,000 (this varies between financial institutions), a Grant of Probate may not be needed.

There is a wide range of legal tax planning measures that can be taken to reduce the potential for paying Inheritance Tax. Trusts are one of the options that can be considered as part of the estate planning process.

We understand that legal documents can be confusing, and that’s where our experienced, friendly team can help. For personalised advice tailored to your specific circumstances or to give your legal affairs a thorough check over, contact our expert team today.

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