Planning for the Future - The Benefits of Making a Will and Enduring Power of Attorney
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It is well known that a large percentage of people have never made a Will. Of those that have made a Will many will be out of date due to changes in circumstances such as marriage or divorce.
Whether you are in your retirement years, or a parent of a child under 18 years, a Will is the easiest way to ensure that your wishes are carried out, should anything happen to you.
The main reason for making a Will is to set out clearly those you wish to benefit from your estate when you die. If you have not made a Will, your estate will be distributed in accordance with The Administration of Estates Act (Northern Ireland) 1955. It is unlikely that the rules set out in this legislation will mirror exactly with what your own wishes are.
For example, a child or family member who requires specialised help due to a disability will not be looked upon more favourably under the legislation. However, if you have made special provision for this person in your Will you can ensure that they are adequately provided for in the future.
Having an up-to-date valid Will is of particular importance for unmarried couples or cohabitants. There is currently no automatic right for cohabitants to inherit from each other. This leaves the surviving partner extremely vulnerable, particularly if the deceased has children. By making a Will you can ensure that your partner and children are provided for.
A further benefit for making a Will, and one, which many people are unaware of, is that you can appoint a guardian for any children you have who are under the age of 18 years. Not only will you have peace of mind by ensuring your children will be looked after by someone you trust but you also alleviate distress and uncertainty for your family and loved ones by making this difficult decision for them.
It is common practice for couples, whether they are married or in a civil partnership, to make ‘mutual’ or ‘mirror’ Wills. This type of Will usually specifies that the first to die will leave everything to the other, and then to the children when both die. This allows the surviving partner to carry on with as little disruption as is possible in the circumstances.
Making a Will also allows you to make full use of the ‘Nil Rate Band’. (For further information regarding the ‘Nil Rate Band’ please see our article on Inheritance Tax Planning).
Your Will can be amended at any time and it is advised that you review your Will if your circumstances change materially, such as marriage, divorce or having children.
When considering drafting a Will you may also wish to consider making an Enduring Power of Attorney.
Although it is common to associate mental incapacity with old age it can happen to anyone, at any time.
When a person loses mental capacity they require someone to deal with their legal, financial and health affairs. An Enduring Power of Attorney (EPA) facilitates this. You nominate one or two people to act on your behalf should you lose capacity. You can limit the powers of your attorneys if you so wish. We recommend you nominate two people who you trust will act in your best interests and in accordance with your wishes.
The EPA will have immediate effect upon the attorney’s signing it. However, it is possible to include a provision or restriction on when the power should commence. Once it is deemed that you are mentally unfit your attorney must make an application to the High Court for registration of the power.
It should be remembered that you can cancel or amend the EPA while you are mentally capable.
If you require further information on making a Will or Enduring Power of Attorney our Private Client Team are happy to help.
Emma McCann