There is a lot to think about when you are a parent, and one the hardest but most important decisions is getting a Will and Lasting Power of Attorney in place. These documents will provide you with peace of mind that everything will be dealt with in accordance with your wishes.
Topics to be answered in this article
What is a Will?
A Will is a legal document which confirms your wishes on how your estate will be dealt with after your death. A Will lets you decide exactly what happens with your estate, this includes your money, property and possessions after your death.
Learn more about Wills: What is a Will?
What is a Lasting Power of Attorney (LPA)?
A Lasting Power of Attorney is a legal document that lets you give someone you trust the legal authority to make decisions relating to your property and finances and health and welfare on your behalf if you are no longer able to or don’t want to.
Learn more about a Lasting Power of Attorney: What is a Lasting Power of Attorney
Why parents need to ensure a suitable Will is in place
According to The National Will Register two-fifths of UK adults have not prepared a Will, with less than 7 in 10 parents with minor children having an up-to-date Will in place.
If you die without leaving a Will, you’ll have no control over who gets what from your estate. Without a Will, the law (Intestacy Rules) will decide who gets what. These laws may not reflect how you want your estate to be dealt with. Therefore, it is important to have a Will so you can ensure that if you or your partner were to die, your family will be provided for in the way you want and your estate will be distributed in accordance with your wishes.
There is a common misconception that Godparents would automatically become legal guardians for their children but this is not the case. As parents, having a Will enables you to make arrangements for the care of your child(ren). You can appoint a Guardian who will step in to look after the child(ren) in the event that both parents die before the child(ren) are 18. If no guardian is appointed, it can be left to social services and the Courts to make the decision.
The Intestacy Rules do not make provision for partners or stepchildren, so if you would like either to benefit from your estate, you need this included in your Will.
Another reason why Wills are important for parents is the appointment of Trustees who will manage the children’s inheritance whilst they are under 18. Your Will can also be used to specify the age your children will inherit as 18 is still quite young to inherit a large sum of money. Typically, the age is specified as 18, 21 or 25. You can also be specific in how the funds can be spent whilst they are under the age set, for example to release funds to pay for their education.
Making a Will provides you with the opportunity to structure your estate in the most efficient way to minimise your inheritance tax liabilities.
If you have remarried, any existing Will usually becomes invalid unless a contemplation of marriage clause is included. This again means that your estate may not go to who you want to inherit, in particular your children from a previous relationship.
It is therefore essential for parents to have a Will in place to cover this. A Will also ensures that everything is clear during a very distressing time for a family.
Why should all parents have an LPA?
Most parents think solely about the preparation of Wills to ensure that their assets go to who they want on death, however there are two vital documents to prepare which can provide a form of protection during your lifetime – Lasting Powers of Attorney. It is important for parents to consider what would happen if they were to lose physical or mental capacity. Who would you want to look after your affairs when you are unable to?
The preparation of both a Will and Lasting Powers of Attorney are the best way to protect you and your children.
There are two types of Lasting Power of Attorney, the first covers your property and financial affairs and the second covers your health and welfare.
As parents you are often focused on looking after your children and cannot imagine the day where you are unable to do this. Then one day roles are reversed and your children will find themselves looking after you. Preparing Lasting Powers of Attorney documents ensures that your children are able to look after your affairs and make the decisions on your behalf rather than a third party who nobody knows or trusts.
A Lasting Power of Attorney ensures that your loved ones and people you trust are allowed to make decisions regarding your finances and health. Sadly, if these documents are not in place there can be serious delays in arranging proper healthcare and accessing your money. These delays create a lot of stress for your family in what is already a possibly difficult and emotional time.
If you lose capacity and do not have a Lasting Power of Attorney, your children will need to apply to the Court of Protection to become a Deputy. This can be a length and costly process. It also leaves your children in limbo where they are unable to make decisions on your behalf, often leaving third parties in control.
There are two types of Lasting Powers of Attorney.
The first covers your property and financial affairs. This allows your attorneys (likely to be your children) to buy and sell property on your behalf, access your banks accounts and pay your bills.
The second covers your health and welfare. This enables your attorneys to make decisions regarding your care, care homes, health and medical needs if you are not in the position to make these decisions yourself.
Typically, parents appoint their children as your attorneys. You do not need to have the same attorneys on both documents. Parents can choose the children who are more financially savvy to deal with their financial affairs and the children who are more emotional for the health and welfare decisions.
The attorneys can be anyone you trust to manage your affairs. We recommend including at least two attorneys with a maximum of four who can act jointly and severally. Replacement attorneys can also be included to cover any eventuality if your attorney finds themselves unable to act.
In short, having Lasting Power of Attorney documents in place provides both you and children with certainty regarding your future and therefore peace of mind.
Supporting children with a disability
Your role as a parent may last longer and can be unpredictable. It is therefore important to ensure that you have the necessary documents in place to simplify your affairs for your children. By deciding on attorneys in a Lasting Power of Attorney and executors in your Will, you can ensure that people capable of making these decisions are chosen, particularly if your children are not best suited to deal with these.
A Will is also a very useful document for parents with children who have a disability. A Will can ensure that your child’s specific needs are met and make sure any inheritance they may receive is not necessarily taken into account with any financial assistance they may be receiving.
In this instance, there are a number of Trusts that can be included to protect the interests of this child. The most common is the inclusion of a Discretionary Trust which provides flexibility and is a way to ensure your vulnerable child has money as and when needed, but they won’t have control over that money themselves. An alternative is the inclusion of a Disabled Persons Trust within your Will, where the child does not control their finances and when they do receive some money it isn’t means tested.
By including certain provisions in your Will, you can limit the amount of court involvement in how and where your estate is spent and ensure that your children are financially taken care of.
How can Goughs help?
The team at Goughs are highly experienced in preparing Wills and Lasting Powers of Attorney. We understand that no two situations are the same, and we take pride in getting to know you and understand your wishes. To discuss how we can help you make a Will and Lasting Power of Attorney please contact us.
