January is typically a time when we turn our attention to making positive changes, whether it be a resolution to start going to the gym again, a healthier diet, or taking better care of the finances.

Whether we stick to them or not is another matter and this point in January is often when many of these good habits start to fall by the wayside.

However, one good habit that should not be forgotten is estate planning: putting in place a will and power of attorney, and regularly reviewing them to ensure they continue to be fit for your personal circumstances.

Thinking about your death or scenarios where you might need someone to make decisions on your behalf can be sensitive but having the proper preparations in place for those eventualities will help ensure your wishes are respected and make things far easier for your loved ones.

Unfortunately, as many as two-thirds of the population do not have a will and up to four-fifths have no power of attorney in place. Adoption does increase in line with age, however a will and power of attorney is not something that only the elderly should consider. Rather, it should be on the agenda of all adults.

A will is a legal document that appoints executors to look after your estate when you die and sets out who you wish to inherit your assets upon your death. It can also cover the appointment of guardians for your children. Where there is no will in place, an estate is distributed under the law of intestate succession which can have unintended consequences for those you leave behind and often does not leave your assets to those you would expect.

Many people incorrectly assume that should you die with a spouse/civil partner surviving you, your entire estate will automatically pass to them. This is not the case. The actual distribution depends upon whether you die survived by (1) a spouse/civil partner, (2) a spouse/civil partner and children or (3) just children.

If you die without a spouse/civil partner, the distribution depends on the family members who survive you.

A will becomes even more important in the event a couple are not married or in a civil partnership, as a surviving cohabitant’s position is not certain. While they may make a claim for an award to be made upon the death of their cohabitant, how much they receive is very much at the discretion of the court and is based on many factors. The court can make an award up to the same amount as a spouse/civil partner would receive, or they could receive nothing. Having a will in place provides certainty and avoids the division of an estate being left to the application of the law (which takes no account of specific circumstances) or the discretion of the courts.

Powers of attorney are another area fraught with misconceptions. It is commonly thought that powers of attorney are reserved for the frail or elderly and the answer I often hear from clients when asked if they have one or whether they would like to put one in place is: “No, I’m too young to think about that just yet”.

The reality is you are never too young to have one in place. Whether it be an accident or sudden illness, a power of attorney acts as an insurance policy – something you hope you don’t need but which provides comfort that your affairs can be handled if you are no longer able.

A power of attorney is a document that allows the granter to authorise someone they trust (often a family member or friend) to act on their behalf if and when required – typically covering financial/ property issues, as well as matters of personal welfare.

The alternative to a power of attorney is a guardianship order – a court-approved appointment that can be applied for when a person has lost capacity and does not have a power of attorney in place already. The process of applying for a guardianship order is costly (generally several thousand pounds) and they must be renewed in accordance with the period set out in the initial order, resulting in ongoing costs. The process can also be lengthy, time-consuming, and stressful for those involved.  The powers under a guardianship order may also be more restrictive than under a power of attorney.

We advise that you review your will and power of attorney from time to time to ensure they continue to align with your wishes and circumstances. In particular, certain life events can be a good time to assess whether they continue to meet your needs – such as moving in with your partner, marrying your partner, the birth of a child, a death in the family, retirement, change in financial position, disposal of a business, etc.

If you would like to speak to one of our expert private client team about your will and/or power of attorney, please do not hesitate to get in touch.

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