Estate Planning

It is possible to change the way in which a person’s estate is divided up with or without a will, so long as all parties who are negatively affected by the change agree.

This is known as a deed of variation. A deed of variation must be used within two years of the person’s death and could be used to help with inheritance tax, or to provide for a partner who has been cut out of inheritance due to intestacy laws or an out of date will.

As illustrated in the diagram above, if you died without any surviving children and without being married or in a civil partnership, there are a number of people who could stand to inherit. Immediate family such as parents, siblings, nieces, nephews and grandchildren could also inherit.

The order of who inherits first will depend on a number of scenarios. In order to see who would inherit first and how the estate would be divided up, visit the Government website.

If there are no surviving relatives, everything passes to the crown. In the circumstances where you believe you should be entitled to an estate but the crown has inherited everything, you may challenge this but would need suitable legal advice.

A will makes it simpler for your family or friends to sort your affairs out when you die and pass the right things on to the people you’d like. Without a will the process can be more time consuming and stressful and not everyone may agree with how your belongings should be shared out.

Writing a will is especially important if you have children or other family who depend on you financially. If you have children, you should make a will so that arrangements for the children can be made if one or both parents die. Within the will you can specify who you would like to be the children’s guardians. If you have not done this, guardians for the children will be appointed and they may not be who you would have wanted.

Whether you have a will or not, when you die your belongings are grouped together to make up a legal term known as your estate.

If you die without a will, your estate will be shared out in a standard way which may not be in the way you’d like. The way your belongings are shared out varies depending on which country in the UK you live in. These are called intestacy laws and the details of these are available in the intestacy laws section.

Although you can write a valid will yourself, it can be complicated if you have shared assets like houses or bank accounts or if you’ve been married or divorced. There are a number of ways you could write a will.

Firstly, a solicitor could produce a valid will for you. This may be the most expensive option in terms of upfront cost, but it could be the best value option if you have a number of people you’d like to inherit your estate, or if you think that inheritance tax may have to be paid. A good solicitor will help you plan your will around current inheritance tax laws, as well as giving you the peace of mind that the will would be valid and has been completed by a regulated professional.

You could use a will writing service available either by arranging a qualified will writer to visit your house or by doing it online. This is normally cheaper than using a solicitor. If you use a will writing professional, they should be a member of the ‘Institute of Professional Willwriters’ or ‘The Society of Will Writers’ which will mean that although they are not regulated in the same way as solicitors, they will have had to undertake training.

If you use an online company to do your will or use a shop bought pack, check the company’s reputation and reviews. There is no guarantee of the will being valid but this could be a good option if your plans are simple and do not require complex instructions.

Alternatively, many charities offer a solicitor will writing scheme at either a discounted cost in the form of a donation to the charity or for free. These wills are usually written or checked by a solicitor so you can have confidence in these wills.

There are also yearly events arranged by charities like ‘Free Wills Month’ and ‘Will Aid’.  ‘Free Wills Month’ runs every March and October and allows anyone aged over 55 to get a will written by a solicitor for free. If you’re getting a will as a couple, only one of you needs to be over 55.

‘Will Aid’ runs every November and is available to people of any age. Solicitors involved waive their fee for writing or amending a basic will, and invite people to make a voluntary donation to ‘Will Aid’ which distributes funds to its partner charities.

Although these wills are advertised as free, it is hoped that you would make a donation to the charity or leave something to the charity in your will in exchange for the will writing service.

Once you’ve written a will it’s also important to update it after any major life events. A marriage or divorce will automatically revoke a will, meaning the estate is subject to intestacy laws covered in the intestacy section. Although this is useful as people are not likely to want to leave inheritance to a former partner, it can also be a bad thing as all the other directions in the will are invalid too.

One type of power of attorney allows you to give an attorney the power to make decisions about things like medical care and life sustaining treatment, moving into a care home or the way your daily routines are assisted if you’re not able to perform normal activities like getting dressed or washed.

This can only be used when you lose mental capacity. The definition of this varies depending on where you live in the UK so check the links to the government website to find out more in your area.

The other type of power of attorney gives an attorney the power to make decisions about your finances. This can be day to day activities like managing your bank account, receiving benefits and paying bills, but it can also larger things like selling your home. It’s really important you know and trust the person who would be doing this for you. This type of power of attorney can be used as soon as it’s registered but needs your permission.

Depending on which country you live in in the UK there are slight differences. We’ll now look at the names of the documents in each region and what is possible.

A power of attorney is a legal document detailing who you would like to help you with important decisions about your finances or health when you’re not able to. This could be a partner, a son or daughter over the age of 18, a trusted friend or even a company.

Traditionally, people start to think of this as they get older, however, not being able to make decisions about your health or finances could happen at any time due to accident or illness. If you didn’t have this set up and someone had to try and make these decisions for you when needed, it can end up taking a long time and may involve costly legal fees. So it could be better to have one set up and never use it, than not have one set up when you most need it.

Although the process and names of the forms differ depending on where you live in the UK, broadly there are two types of power of attorney. Those that allow decisions about your finances and those that allow decisions about your health. In most areas of the UK you can either have one of these or both.

In England and Wales you can get a both types of power of attorney explained above.

These are known as health and welfare lasting power of attorney and a property and financial affairs lasting power of attorney.

Both power of attorney documents are available in Scotland but have different names. A welfare power of attorney allows someone to make decisions about your health. A continuing power of attorney allows someone to manage all your financial affairs.

In Northern Ireland there is only one type of power of attorney, an enduring power of attorney. It lets someone manage all your financial affairs. There isn’t a power of attorney that lets someone make decisions about your health

There are a number of things you need to think about when setting up a power of attorney.

Firstly, you need to decide who the power of attorney is going to be. Ideally, it would be an adult you’ve known for a long time and someone you trust. It may be better to ask someone younger than you to take the role, as someone your own age may experience similar issues at a similar time.

It’s important to note that you could have more than one power of attorney, so two or more people are sharing the responsibility.

Setting up a power of attorney can be done online via the government website. You can do this all yourself, so although you’ll have to pay a fee to create a power of attorney, you don’t have to pay a company to do this for you.

Once your chosen person understands the responsibility and accepts, you can find the forms online through the Government website.

Once you’ve completed the forms, you’ll then pay a fee and will have to register the power of attorney with the relevant department to make sure it is valid. The government link provided will guide you through the process, click here to access this guide.

Once the power of attorney is registered it can be used when needed, either if you lose mental capacity, or if you need to ask someone to help out with financial decisions.