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Throughout life, your Legal Planning – Wills and Lasting Powers of Attorney will take many twists and turns. Disaster may follow if you don’t keep track.
Some twists are expected, some not, but you need to be prepared and keep your planning under regular review—not less than every three years, but more frequently with significant life events such as pregnancy, changes in wealth, marriage, divorce, tax issues, going into business, etc.
Questions and comments are most welcome, as this can only be a simplistic overview of the multiplicity of changes that can happen.
A Special Note for Blended Families
Legal planning for such families is critical to avoid disputes and family feuds.
Worse still the scenario where the surviving partner, inherits everything, marries again, dies without a well written new Will and the new spouse gets the lot for his or her children. Some people even make a career out of it!
It is perfectly possible to be fair to everyone with sound Legal Planning.
Stage 1: Minus 9 months to almost 18 Baby to Almost Adult
At this stage, you are entirely dependent on whether your parents have suitable legal planning in place. You are their responsibility, and you don’t yet have the full rights accorded to an adult, so you can’t make Lasting Powers of Attorney.
A few on active service may be able to make a Will once they are 16, but that is mainly theoretical.
So you had better hope your parents have the right plans in place, as far as the Law allows.
Why the minus nine months? Before you are born, your mother’s medical treatment, should she be unable to make a decision within a reasonable time, bearing in mind the urgency, may be made by those appointed to do so under a Lasting Power of Attorney Health and Welfare. Similarly, the financial side could be taken care of by her appointed Attorneys under a Lasting Power of Attorney, or by the Court of Protection. Your father may well be frozen out of the joint accounts if your mother should be sufficiently unwell.
Not all fathers will have parental responsibility, so if your father is not named on your birth certificate, he will not automatically (unless Social Services object) be in charge if your mother is unable to look after you. See footnote 1.
As far as the young person is concerned, if there is not a parent with mental competence AND parental authority, the Court of Protection would rule on all Health and Welfare matters, though the Financial LPA attorneys of either parent could pay the bills.
These days, some people under 18 are quite wealthy, and there is little you can do if you don’t want your parents to inherit if you die, apart from getting married so that your spouse becomes the prime beneficiary. See footnote two.
Stage 2: Young Adult (18-25) YOU ARE NOW ON YOUR OWN.
Your parents / spouse/ partner have no legal influence if things go wrong unless you have taken the necessary precautions to choose them to protect you in that unexpected time of need. Examples might be
- mental health conditions – such as schizophrenia or bipolar disorder
- dementia
- severe learning disabilities brought about by deterioration or illness or accident
- brain damage – for example, from a stroke or other brain injury
- accident
- drugs (1 mistake can do it) or alcohol misuse.
Will: Even at this stage, having a Will can be beneficial, especially if the individual has significant assets or specific wishes about inheritance. Otherwise, footnote two applies.
Lasting Power of Attorney (LPA): this ought to be done on your 18th birthday. Establishing an LPA for Health and Welfare can ensure that decisions about medical treatment and care are made by someone trusted if the individual becomes incapacitated—similarly, make a Lasting Power of Attorney Property and Financial Affairs. Fail to do so and the Court of Protection will make decisions for you, at your expense, should you be unable to through accident or ill health, within a timescale reasonable in the circumstances.
All three should be set up if you start a business (special agreements if there are any partners or co-shareholders) or live with a partner (cohabitation agreement).
Stage 3: Early Career (25-40)
Review everything every 3 years or when significant changes take place.
Your Will becomes increasingly important as individuals may acquire more assets, and start families. Your Will can specify guardianship for minor children and how assets should be distributed.
Trust: Setting up a trust (usually in the Will) can offer protection for assets, especially if there are minor children involved. It can ensure that assets are managed for their benefit until they reach a certain age.
Lasting Powers of Attorney: after an early peak due to accidents as a young adult, medical and other issues slowly rise as you get older, and your LPAs are more likely to be used – if they are there. Family and business alike will suffer if not. If you have your own business, it’s even worse. So both types of Lasting Power of Attorney remain crucial but must be kept up to date, just as other Legal Planning is.
Stage 4: Established Career and Family (40-60)
Your Will remains critical for ensuring that assets are distributed according to your wishes and responsibilities, especially if there are complex family structures or significant assets involved.
Trust: Trusts can be used to protect assets from various risks, including taxation, divorce settlements, or ensuring provision for children from previous marriages.
Lasting Power of Attorney (LPA): Both Health and Welfare and Property and Financial Affairs LPAs can be crucial at this stage to manage affairs in case of incapacity.
Stage 5: Retirement (60+)
Your Will: reviewing and updating it is essential to reflect any changes in circumstances, beneficiaries, or wishes.
Trust: Trusts can be used for estate planning to mitigate inheritance tax liabilities and ensure assets are passed on efficiently.
Lasting Power of Attorney (LPA): Continuing to have LPAs in place is important to ensure someone trusted can manage affairs if the individual becomes unable to do so.
In each stage of life, Wills, Trusts, and Lasting Powers of Attorney provide different forms of protection, from ensuring assets are distributed according to wishes to managing affairs in case of incapacity. Consulting with legal professionals is advisable to ensure these documents are drafted correctly and provide the desired protection.
Ill Health or unpleasant diagnosis
It is crucial that all documents are reviewed in these circumstances, as it could soon be too late to make any changes, or it may become easier to challenge your changes by virtue of claiming that you were under undue influence or no longer had sufficient understanding of the nature and extent of your estate, of those you should look after.
There are also concerns about Wills etc made shortly after and sometimes before significant events such as the death of a child or spouse, an operation etc. Getting a doctor to discuss things with you to asses capacity and witness your Will is the gold standard, but few will assist, and private consultations with suitable doctors are not cheap!
The moral is to keep everything under review, not less than once every three years, and more often if significant changes occur.
Footnote One: Parental Responsibility More on Parental Responsibility
In England, parental responsibility is a legal term that refers to the rights, duties, powers, responsibilities, and authority that parents have in relation to their children. It encompasses the right to make important decisions about a child’s upbringing and welfare, such as where they live, their education, their medical treatment, and their religion.
Parental responsibility is automatically granted to mothers, married fathers, and fathers named on the child’s birth certificate (for births registered after December 1, 2003). Unmarried fathers who are not named on the birth certificate do not automatically have parental responsibility, but they can acquire it through various means, such as by jointly registering the birth with the mother, by marrying the mother, or by obtaining a parental responsibility agreement or court order.
A Parental Responsibility Agreement is a legal document that allows an unmarried father to acquire parental responsibility for his child. It must be signed by both parents and registered with the court. This agreement grants the father the same rights and responsibilities as a married father or a father named on the birth certificate.
Parental Responsibility Agreements are typically used in situations where the child’s parents are unmarried or where the father’s name is not on the birth certificate, but the parents wish to share parental responsibility equally.
It’s important to note that parental responsibility cannot be acquired through informal means such as simply living with the child or being involved in their life. It must be formally established through a legal process such as a Parental Responsibility Agreement or a court order. Once acquired, parental responsibility is a significant legal status that carries various rights and responsibilities in relation to the child’s upbringing and welfare.
Footnote two: Rules of Intestacy (no valid Will).
Footnote three: Change of Sex
For Wills executed prior to 4 April 2005, this can be an issue, and they should be reviewed.
See the Gender Recognition Act 2004.
