Wills, Trusts, Tax & Probate - FAQs

Making a Will FAQs

Q. What is a Will?

A. A Will is a person's statement as to how they wish their estate to be dealt with upon their death. It must be in writing, signed by the person making the Will in the presence of two independent people who should also sign the document.

Q. Do I need to make a Will?

A. Everyone should make a Will. It makes it clear who you would want to deal with your estate and what your wishes are. It is especially important that you make a Will if you have children under the age of 18 or if you own a property.

If you wish to specify that your estate passes to your children then you can control at what age they inherit to prevent them from receiving "too much too young". It also allows you to make provision for other people who may not be capable of managing money for themselves.

Many people believe that they have nothing to leave. However, it is a sad fact that many of us are worth more once we have passed away, so having a Will can be vital to ensure your estate passes in accordance with your wishes.

Q. What if I do not make a Will?

A. If a valid Will cannot be found on the event of your death then your estate is distributed in accordance with the rules of intestacy. This may not be in accordance with your wishes and, in some cases, can end up with relatives benefiting from your estate that you have never seen. If there are no relatives then your estate would pass to the Crown.

If no Will can be found then this may create problems within your family. Your nearest relatives would have to decide who would deal with your estate. This may mean that relatives not of your choosing have access to your private affairs and become involved in the administration of your estate. There could also be problems if your relatives do not get on causing further stress, delay and costs at what would be a difficult time for your loved ones anyway.

Q. I have property in another country, does that matter?

A. Yes it does. Other countries have strict laws governing how certain assets, such as property, can be distributed in the event of a person's death. It is vital that you take advice from a lawyer specialising in the laws of that country to ensure that your estate passes in accordance with your wishes subject to the laws of that country.

It is possible to make more than one Will to control the assets which may be in different countries. However, it is vital that the lawyer preparing each Will knows about the existence of the other Wills to prevent them from accidentally revoking (cancelling) the others.

Q. What do I need to consider before making a Will?

A. Who do you want to deal with your estate? These are known as your Executors.

Who do you want to look after your children under the age of 18? These are known as Guardians.Who do you want to actually benefit, i.e. receive your estate? These are known as Beneficiaries.

Carefully consider what you actually own and the values of your assets? It is also important to consider those people that are dependant on you and if they will be adequately provided for in the event of your death.

Probate FAQs

Q. What is Probate?

A. Probate is confirmation that the Will of a deceased is that person's last Will. It also names the Executors who are actually dealing with the estate. The Executors can then collect in the assets of the estate, settle the debts and distribute the estate once Probate is obtained.

If there is no Will then the nearest relatives to the deceased will obtain what is known as Letters of Administration. This is confirmation that they are the correct persons for dealing with the estate and will distribute the estate in accordance with the Laws of Intestacy.

People dealing with an estate are also known as Personal Representatives.

Q. Do I need to get Probate?

A. If the value of the estate is less than £5,000 then Probate will not be required. If the estate is worth more then you will need to liaise with the financial institutions where the deceased had funds to ascertain whether they want to see Probate before they will accept instructions from those dealing with the estate. If the deceased was the sole owner of a property then Probate must be obtained.

Q. How do I get Probate?

A. You would need to obtain valuations of the deceased's assets and liabilities as at the date of death. The valuations must include assets that were in the joint names of the deceased and another person even though those assets would not be under the control of the Will. It is necessary to establish the size of the estate in case there is any inheritance tax due as a result of the death of the deceased. The valuations, together with other details about the deceased, then need to be submitted to the Probate Registry.

Q. Is it possible to include estimate figures rather than exact valuations?

A. As Personal Representatives you have a duty to carry out the administration of the estate as best you can. It is possible to include estimates but you must have good reason to do so. H M Revenue & Customs have been known to issue penalties if they believe that the Personal Representatives of an estate have not discharged their duty adequately.

Trusts FAQs

Q. What is a Trust?

A. A Trust is when one individual (known as a Trustee) holds an asset on the behalf of another person (known as a Beneficiary).

These can either be set up during a person's lifetime or on their death by Will or as a result of the Laws of Intestacy.

Q. Why would I need a Trust?

A. Trust can be useful in a variety of circumstances, for example, looking after an asset for a beneficiary until they reach a certain age and old enough to manage that asset for themselves.

They can also be useful to control assets for the benefit of a number of beneficiaries with competing interests, for example, in second marriages it is often necessary to ensure that the spouse of the second marriage is provided for but in the event of that person's death then those assets are ring-fenced for the benefit of any children of the first marriage of the first person who died.

A Trust can also be useful if it is not a good idea for the funds to be transferred direct to the beneficiary. This could be because they are not capable of managing those funds or as part of their own tax planning.

Q. What duties do Trustees have?

A. Being a Trustee is an extremely responsible position with no reward. A Trustee cannot profit from their position. The Trustees have a number of duties including ensuring that the assets within the trust are looked after, taking advice when relevant (for example investment advice) and ensuring accounts are kept to show the beneficiary when asked. These are just a few of the duties a Trustee has. If you have been appointed as a Trustee then ensure that you take advice.

Q. Can Trustees be changed?

A. It is perfectly possible for Trustees to retire from the responsibilities of a Trust. Trustees are also able to appoint other people as Trustees to work with them to carry out the responsibilities of the Trust.

It is also possible to get a Trustee removed by order of the Court in certain circumstances. If this is an issue then please contact us for further advice.

Powers of Attorney FAQs

Q. What is a Power of Attorney?

A. A Power of Attorney is authority given from one individual (the Donor) to another (the Attorney) to make decisions on behalf of the Donor. There are several types of Power of Attorney.

General Power of Attorney

This is a simple document allowing the Attorney to manage the financial affairs of the Donor. These documents can be set up quickly but are normally temporary in nature and are of no use if the Donor is subsequently mentally incapable of managing their affairs.

Enduring Power of Attorney

This is a document allowing the Attorney to manage the financial affairs of the Donor. This authority would continue even if the Donor was unable to manage his own money by reason of mental incapacity although the document must then be registered with the Office of the Public Guardian. No new Enduring Powers of Attorney can be made as of 1st October 2007. Any existing Enduring Powers of Attorney validly made before then are still effective.

Lasting Power of Attorney

This replaced Enduring Powers of Attorney on 1st October 2007. There are two types of Lasting Power of Attorney

A Lasting Power of Attorney for Property and Affairs which allows the Attorney to manage the Donor's money and property.

A Lasting Power of Attorney for Health and Welfare which allows the Attorney to make decisions regarding the Donor's Health and Welfare i.e. where they live, what they eat, what they wear and give or refuse consent to medical treatment. This can include making decisions about life sustaining treatment. This document can only be used if the Donor is unable to make these decisions.

Q. When should a Lasting Power of Attorney be made?

A. It should be made in advance of it actually being needed. Many people think that they will make a Lasting Power of Attorney when they are unable to manage their affairs themselves - this would be too late! The document must be made whilst you are mentally capable of doing so.

Q. Why do I need a Lasting Power of Attorney?

A. Everybody should make a Lasting Power of Attorney for Property and Affairs. Only you can give instructions on how your money can be dealt with unless it is in the joint name with someone else. If you were unable to manage your own money then no one else would be able to get access to those funds on your behalf. You should not just consider yourself unable to manage your own money if you were mentally incapable as a result of dementia etc. You could be incapable as a result of a fall or accident which meant that you were physically unable to get around or manage your affairs but mentally you would still be fine.

The need for Lasting Powers of Attorney for Health and Welfare really depends on your personal circumstances. If you have strong feelings about certain types of medical treatment then having this in place will help the person of your choosing to ensure your wishes are followed. If you are reliant on someone who is not an immediate family member then having this document will ensure that are involved.

Q. Can a Power of Attorney be cancelled?

A. Yes if you are mentally able to understand the implications of doing so.

If an Enduring Power of Attorney or Lasting Power of Attorney has been registered with the Office of the Public Guardian then the Office of the Public Guardian will have to be advised of the document being cancelled.

Q. Can I appoint more than one Attorney?

A. Yes. The appointment of attorneys can be made so that they have to act together or that they can act independently of each other.

Court of Protection FAQs

Q. What is the Court of Protection?

A. The Court of Protection deal with applications regarding people who are mentally unable to manage their own affairs and a decision needs to be made. This can be a decision regarding that person's finances or health affairs. Individuals subject to the Court of Protection are known as the Patient.

Q. What is a Deputy?

A. Deputy is an individual appointed by the Court of Protection to make decisions and manage the affairs of a person who is mentally incapable ("the Patient"). Ordinarily a Deputy (formerly known as a Receiver prior to 1st October 2007) is appointed to manage the financial affairs of the Patient. The Deputy then has to file accounts to the Office of the Public Guardian each year and ensure that insurance is in place each year (called a Security Bond). The Security Bond is necessary protection for the Patient in case the Deputy is negligent or steals the Patient's money.

Q. How is a Deputy appointed?

A. An application is made to the Court of Protection using specific forms including details about the Patient's finances and circumstances. A medical report is also included to confirm that the Patient is mentally incapable as otherwise the Court of Protection would not be involved. Notices are then served on the Patient and to specific relatives and people involved with the Patient's affairs.

Q. How long can it take to have a Deputy appointed?

A. This can be a long process and it is normal for such applications to take 6 months from start to finish, even if there are no complications.

Nursing Home Care Fees FAQs

Q. Can I get assistance with the cost of my residential care?

A. Yes. If you have what is known as a "Primary Health Need" then the cost of your care should be paid for by the NHS. If you don't but still require some nursing care then you can get a contribution to the weekly cost to cover the nursing element.

If you are not eligible for full NHS funding then your finances will be assessed by the Local Authority to establish whether you should pay for your care in full or in part. It may be that not all of your assets are included in the assessment depending on your circumstances.

You should also ensure that you are receiving all the state benefits to which you are entitled to receive.

Q. Do I have to sell my home in order to pay for the cost of me going into residential care?

A. No. In some circumstances your home is specifically not taken into account in assessing your finances. If your home is included then it may be possible for the Local Authority to pay your fees and they will secure those funds against your home, similar to a mortgage, only to be repaid when the property is sold at a later date for example, when you have passed away.

Q. Can I challenge decisions about the funding of my care?

A. Yes. If you believe that you have not been properly assessed or an error has been made in your assessment then you can challenge the decision.

Q. What do I do if I have a complaint about the NHS and/or concerning my assessments?

A. You should follow the complaints procedure for that particular institution. They should provide you with this. If you do not get a satisfactory result then you can take your matter to the Health Ombudsman.

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