“Life Planning”
Presentation by Justin Nelson on 01 July 2020 to Wealden Business Group
Lawyers like to refer to the topics I am going to cover as “life planning”, but really it is planning for death, incapacity and serious illness – that sounds a bit miserable, though, so “life planning” is preferred.
Planning for death – Wills
Everyone should recognise the importance of making Wills and keeping them up-to-date, especially if you are a business owner – otherwise, you are leaving the distribution of your estate to luck and the blunt instrument of the intestacy rules, which cannot take your particular circumstances into account.
If you do not have an up-to-date Will, it is usually a simple process to make one, depending on age, assets and responsibilities. It can be quick: completion within a week is not unusual; and it is inexpensive: £360 including VAT for a simple Will or for simple mirror Wills for a couple.
In cases that are not completely straightforward, it makes sense to consult your independent financial adviser (IFA) to review your finances and make sure they are arranged in the optimum way, and to consult your accountant to check what tax savings can be made – we are happy to work with those other professionals to ensure that your Will is drafted so as to maximise the benefits for your beneficiaries.
As a starting point, I can send you some notes on making Wills – email me at justin@nelsonslegal.co.uk or you can download them from www.nelsonslegal.co.uk/wills/
Planning for incapacity – Lasting Powers of Attorney (LPAs)
A Will only applies if (and when) you die – ordinary powers of attorney (authorising someone else to act for you while you are alive) only apply while you are mentally capable of managing your own affairs. If you want to authorise someone to act for you in case you become mentally or physically incapable, you need to make an LPA – or have a valid Enduring Power of Attorney (the old version of an LPA) in place already. It is important to do this before you need to: once you become incapable, it is too late.
Commonly, people choose their spouse as their attorney, and their children as replacement attorneys in case their spouse cannot act for any reason. However, there are plenty of other options and it is important that your arrangements suit your circumstances – but it’s always a good idea to have a replacement attorney in the wings in case of need.
There are two types of LPA –
- one for property and financial affairs
- the other for health and welfare decisions
In most cases people choose the same people as their attorneys for both, so this effectively doubles up the cost, but there are circumstances where the people you trust with your money cannot be trusted with your health, and vice versa
In the health and welfare LPA, you must decide whether to trust (or burden) your attorney(s) with making life-and-death decisions –to end life-sustaining treatment. If you do not want them to make these serious decisions, there is an alternative: an “advance direction” (see below)
LPAs can be made online – https://www.gov.uk/power-of-attorney – make sure you use the gov.uk version to avoid paying unnecessarily. Alternatively, I can prepare them at a cost of £200 + VAT per LPA. Once made, they need to be registered with the Office of the Public Guardian (which charges £82 per LPA) before they can be used
Planning for serious illness – advance direction/advance decision
Often referred to as a “living Will”, an advance direction or decision can be used instead of expecting your attorney(s) to make life-and-death decisions for you.
The decision/direction sets out the circumstances in which you would not want to be kept alive, or in which you would want particular treatment (eg, pain relief, even if it shortens your life), or both. The decision/direction should be made after consultation with your GP and, ideally, your family.
While they are not legally binding, they are strong evidence of your wishes in particular circumstances, in case you are not able to express those wishes yourself.
I can provide a template for use, but advance decisions are not legal documents so I would not normally prepare them myself.
01 July 2020
