Future planning – what it really means

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Nicole Boon describes POAs, Wills and Deputyship Orders.

When the phrase ‘future planning’ is brought up in a conversation, most tend to think of making sure that you have a big enough house to accommodate a growing family, or ensuring that your mortgage is paid off or that you have enough income or capital to continue your lifestyle during your retirement years.

What some don’t consider is what happens if you’re unable to make these decisions, manage your finances, or make decisions on your health.

Lasting Power of Attorney

Lasting Powers of Attorneys (LPA) are documents which allow you to formally appoint one or a couple of trusted family members or friends (known as your Attorneys) to look after your finances or make health decisions on your behalf, if you are unable to. There are two types of documents, one covering

Finance and Property, and one covering Health and Welfare

The Finance and Property document allows your Attorneys to manage your finances, pay any bills and buy or sell property on your behalf, should you not be able to. The Health and Welfare document allows your Attorneys to liaise with doctors on your behalf regarding medical matters, it allows your Attorneys to discuss your long term care needs with any relevant authority and you also have the option to grant your Attorneys the authority to make decisions on life sustaining treatment, which can include (but is not limited to) being kept artificially alive, cancer treatment, or being resuscitated.

These documents are important for anyone, no matter the stage of life, but for those who care for vulnerable family or friends, or who have children with Special Educational Needs, ensuring that your future is safeguarded against as many unknowns, allows for your children’s future to also be safeguarded.

The importance of a will

A common myth is that future planning only applies to a living future, rather than one where you have passed away. Every year, thousands of people pass away without leaving instructions for their loved ones, on how their estate should be divided and who it should be divided between. Without a valid will being in place, that person is deemed to have died intestate and therefore, the intestacy rules will apply. In most cases, the intestacy rules may not change where the deceased wanted their estate to go, but sometimes it causes issues.

For example, under the rules of intestacy, a surviving spouse will inherit all personal possessions, the first £270,000 of the estate (correct as of April 2021) and, depending on whether the deceased had any children, they will inherit an additional one half of the leftover assets, or the whole of the leftover assets.

What some don’t realise is that, should you not be married to the deceased, under the rules of intestacy, you will not inherit from the deceased’s estate. Past experience has shown this to be the most common dilemma, as the surviving Partner may need to move elsewhere, or may even be left homeless as a result of their Partner passing away.

Having a will which has been drafted and executed correctly, will provide instructions on how your estate should be distributed, and will likely provide financial or personal security for those family members who may not otherwise have this following your death. A will is even more important for those family members who may be vulnerable and rely both financially and personally on you. A will helps you provide for those family members, and correctly provided legal advice will ensure that this is completed in the most efficient and personalised way possible.

Deputyship Order

As well as taking care of your family by taking out LPA’s or a will, you have the option of ensuring security for those who may have already lost mental capacity, or for those who may not have mental capacity to deal with their finances. A Deputyship Order is an order awarded by the Court of Protection to deal with someone’s finances or health matters. The purpose of this order is to have someone, or a couple of people, appointed by the Court of Protection to manage someone’s affairs should they not have, or have already lost mental capacity. Due to the nature of the order, the applicant for this order will need to complete a lengthy application, which will be assessed by the Court of Protection, to ensure that they are the correct person or people for caring for someone’s finances. It will also take several months to implement, and will require an insurance policy to be taken out, to protect that person’s finances further, should there be any misappropriation of funds.

For example, if you have a child who has advanced Special Educational Needs, and will not, at any stage of their life, be able to deal with their finances, a family member can apply to the Court of Protection to act as their Deputy. The role of a Deputy is more stringent than that of an Attorney, as there are yearly reporting procedures and the Court of Protection will assess your ability to act as a Deputy, based on the application form submitted and during the ongoing reporting procedures.

Any payment made on behalf of the person who has lost capacity will need to be accounted for, and justification for the payment will be required, if the Court of Protection deems it necessary. A Deputy acts in very much the same way as an Attorney, but a Deputy can be appointed for a child who is under the age of 18.

In respect of health matters, whilst there is a Deputyship Order for health matters, these are less common. The Court of Protection only has a limited scope for allowing health Deputyship Orders, as usually, the Court of Protection will deem a health Deputyship Order unnecessary, as care is often best delivered collaboratively, rather than by one person solely deciding on a person’s care. This is very common in cases where someone is applying to be a Deputy for a younger child.

The key to future planning

The key to future planning is planning. It is easy to be complacent when life seems steady, but it is never known when there may be a detour from that journey. By planning ahead and ensuring that wills and LPA’s are put in place and regularly reviewed, you are ensuring that your future is as uncomplicated as possible for those who may be struggling or adapting to changing times.

No matter what your personal circumstances may be, seeking legal advice into how best to protect your futures and those of your family is of utmost importance. Every day I have clients telling me how they have put wills or LPA’s on the back burner as life got in the way. Whilst the majority have been lucky and managed to sort matters out before any complications arise, some have not been so lucky and are, or have been, dealing with loved ones passing away with no wills or loved ones losing capacity and not being able to pay for their care needs.

My advice would be not to leave discussions of wills, LPA’s or possibly even a Deputyship Order for a cold winter’s day, as it is never known when it may be too late. I urge anyone who has not sought this advice to make contact with a local solicitor and take any steps necessary to ensure that another, equally important, aspect of your future planning is put in place.

Nicole Boon
Author: Nicole Boon

Nicole Boon
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Nicole Boon is a Private Client Solicitor for Langley Wellington LLP, having undertaken her final period of training with Langley Wellington LLP, reaching qualification as a Solicitor in August 2019. On a daily basis, Nicole advises clients on Lasting Powers of Attorney, Wills, Deputyship Orders and Estate Administration, amongst other matters.

Website https://www.langleywellington.co.uk/

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