Wills, Probate & Care Fees

As the Law Society’s advertising campaign used to say, “Making a Will Won’t Kill You”, but not making one could cause all sorts of complications and may mean paying unnecessary tax and care fees. Most of the wills that On Legal prepares for clients are straightforward, simple documents that ensure that a person’s estate goes where they want it to go after their death. Some are more complex affairs that not only deal with a person’s estate but also allow that person to avoid or minimize inheritance tax on their estate or minimize their liability for care fees in the event that they need residential or nursing care.

It is particularly important to make a will if:

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You are not married to your partner or you are not in a registered civil partnership
You have young children especially if you are a couple with children from previous relationships
There are people who could make a claim on your estate because they are financially dependent on you
You have an overseas property
You own all or part of a business

A power of attorney is a legal way of giving someone else the power to manage your financial affairs when it is difficult for you to manage them yourself. It can be a simple document, for example allowing someone to sign documents on your behalf while you are abroad. However, many people when considering giving a power of attorney want someone else to manage their affairs and carry out their wishes in the unfortunate event of them becoming incapable of managing their own affairs. For this they need to make a lasting power of attorney (“LPA”). There are 2 types : one that deals with property and affairs and another that deals with health and welfare. LPAs are sometimes referred to as “living wills” because they allow a person a degree of control over what happens to them and their property and belongings if they become incapable of making their own decisions and arrangements. Under an LPA you can appoint one, two or several attorneys (or replacements in case one you appointed cannot act) and you can give them a blanket power to act and make decisions on your behalf or you can put limits and restrictions on them and give them guidance - it is up to you.

If someone loses their ability to manage their own affairs and they have not made an LPA someone will have to apply to the Court of Protection to be appointed as that person’s “deputy” before they can deal with that person’s property or belongings or make any decisions affecting that person.

If a person (“the deceased”) dies leaving an estate worth over £5,000 (there is a degree of flexibility in that limit) or including a property that estate cannot be dealt with until the administrators (where the person did not make a will – “intestate”) or the executors (if the person made a will) obtain “letters of administration” or “probate” from the Probate Registry. The administrators or executors have to prove (hence the word “probate”) that they are entitled to deal with the deceased’s estate.

Before applying for probate or letters of administration the executors or administrators have to assess the value of the estate and fill in an inheritance tax form. After probate or letters of administration are granted the estate has to be “got in” – all the assets valued, sold, transferred as the case may be – and an estate account prepared. Only then can the estate be distributed – divided among the beneficiaries according to the will or the intestacy rules. Depending on the value and complexity of the estate, the process can take many months.

Through a will or through a trust you can arrange your property and assets in such a way that you minimize the extent to which that property and those assets are eaten up by care fees in the event that you need residential or nursing care.