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Lifetime Planning

Age is just a number when it comes to lifetime planning.  Most people seem to wait until they either foresee a problem or reach later life before thinking about lifetime planning tools, such as Wills and Lasting Power’s of Attorneys this case study shows how planning early could make a difference.

Demonstrated below is a Q&A session with a 32 year old man who has just been diagnosed with cancer and is awaiting surgery to remove a tumour.
Russell is married and has two young children, aged 7 and 3 and is working a full time job as a teacher. He bought a house jointly with his wife just a few years ago. After a short illness and some tests he has been diagnosed with cancer and is awaiting surgery to remove a tumour from his kidney.  An unexpected situation that he had not foreseen.
He wants advice about how best to protect himself and his family from going through any more hardship than they need to regardless of what could happen next.

Q: I’m waiting for surgery, I’m hopeful that everything will be okay, but in case its not, what can I do in advance to make things easier for my family, in particular my wife?

There’s nothing that can stop the difficulty that you and your wife are facing but what might some piece of mind and comfort to you both is giving some certainty about what you want to happen in the event of your death. It would be a good time to think about what should happen to your assets and who you trust to take care of dealing with your estate and looking after your children if you pass away. You can do this by making a Will.
In your Will you can appoint people to deal with the estate and to raise your children. The person who deals with the administration of your affairs after your death is called an Executor. A person chosen to care for your children after your death is called a Guardian.
The only assets that will be taken into account in your Will are those that your own on your own solely. This would not include jointly owned property such as your house, which would pass by way of survivorship to your wife as the surviving owner.

Q: If I die and appoint a guardian for my children, will the guardian have parental rights over my children jointly with my wife?

No, the guardianship appointment can only be accepted if there is no surviving parent with parental responsibility surviving. It is still a good idea to appoint a guardian in your will, as you will not know who of the two of you will die first, but this will only take effect on the second parent’s death. It would be advisable for both you and your wife to make wills and to consider who will look after the children if you are both gone.

Q: If my wife and I make wills together saying similar things, will my wife be able to change her will in the future. If say she remarried again?

Yes. Wills are independent documents and while many married couples make “mirror” wills which are wills that say very similar things, either one of you could change your wills at any time both before and after death.
The only time this could not happen is if the Will is made by way of a contractual agreement, called a Mutual Will. Mutual Wills should be approached with caution and proper legal advice should be sought before entering into one as the survivor will be contractually linked to the terms of the Will as soon as one of you passes away.
The other thing to bare in mind is that if you were to pass away and your wife were re-marry, marriage automatically revokes a Will and so in that situation your wife would need to ensure she made another will in expectation of a second marriage, or after marriage. If she did not have a valid will at the time of her death, either because she had not made one in expectation of marriage or after her second marriage, then her estate would pass by the intestacy rules and her new husband would become entitled to either all of it or a significant part of it depending on the amount involved.

Q: I don’t want my wife to struggle but I also want to make sure my children are provided for. Can I give everything to my wife and then force her to give it to my children after her death if she has remarried? I wouldn’t want our family wealth passing to her new husband’s family and risking my children missing out.

Once you give away an asset, that asset becomes the property of the recipient and your control of it has then been lost. There are mechanisms that can be incorporated into your will however that would give your wife an ability to use an asset (such as a share in your house) for the rest of her life without disturbance or interference but with the capital value of it ultimately then passing to your children at the end of her life. This is called a life interest.
This is particularly useful in an age where second and third marriages are becoming increasingly more common. To do this, we would need to write the life interest into your will and to change the way that you own the house by “severing” the joint tenancy. Your share of the house would then pass in accordance with the terms of your will.
There are also other types of trusts that we could consider to protect your family wealth and ensure your loved ones are provided for.

Q: My wife relies on my salary, what would happen if I were to die?

Unfortunately there is no easy answer to this.
You can of course provide for her in the terms of your will but also, some other things to consider are whether you are entitled to receive a “death in service” benefit from your employer. This is usually a payment that is made to your loved ones if you pass away whilst still employed. It is typically a lump sum payment of 3 or 4 times your annual salary.  If you are entitled to a death in service benefit, make sure you have nominated who you would like to receive that benefit. Speak to your employer about this.
Also, do you have any life insurance policies in place? Most people are advised to take out life insurance when applying for a mortgage so check your paperwork in respect of this to see if there are any premiums that will pay out from the life insurance in the event of your death.
Another thing to consider is whether there would be any entitlement for your wife from your pension provider. Some people do forget about the pensions they are paying into, particularly those who are younger. It’s worth calling your provider and asking what would happen to the pension pot in the event of your death, and if you need to, to nominate a recipient.

Q: What if dealing with my estate becomes too much for my wife to deal with after my death?

You don’t have to appoint your wife as your Executor. You could choose a different person or you can even appoint a solicitor to step in and act to take that pressure off of your wife. You can also appoint more than one person and executors in substitution of others.
Alternatively, it is always open to your wife in her capacity as your appointed Executor to instruct a solicitor to assist her if she does not feel able to carry out the administrative responsibilities of the estate.

Q: I’m staying positive, and I am hoping that all goes well. If, or rather when I survive this, can I change the will in the future?

Yes you can make as many new wills during your lifetime as you like, provided you have testamentary capacity to do so. Making a will now is more about covering the current situation as thoroughly as possible but the Will itself will never take effect until you actually pass away.
What if my quality of life changes for the worse, what extra can I do to make things easier for my family if say I become disabled or mentally incapable?
You can make a Lasting Power of Attorney (LPA). This is a legal document that gives authority to others to assist in your affairs during your life time and to make decisions for you in the event that you are not able to make them for yourself. There are 2 kinds of LPA’s, one that is linked to property and finances and the other that is linked to health and welfare decision making.
The property and finance LPA can be used with your permission if you have capacity and is useful if you become less mobile or unable to sign documents. It can also be used without your permission if you loose capacity.
The Health and Welfare LPA can only be used if you have lost capacity. You are expected to make your own health and social decisions whilst you are able to.
Then LPS will form a legal agreement between you and your chosen attorneys and anything your attorneys do for you must always be in your best interests.

Q: What if my attorneys are not able to act for me in later life?

You can appoint replacements attorneys who will only step in if your primary attorneys are not able to act for you anymore.
If I make an LPA and then I am well enough to act for myself again in the coming months and years, have I lost my ability to look after my own affairs?
No. if you are able to make a decision then your attorneys must not take over and make decisions for you. They are obliged to help you when you cannot, but when you can make decisions for yourself they must allow you to do so. If you regain capacity after a period of being unwell then the LPA would remain valid but the attorneys would simply seize helping you and you would carry on as before.
The LPA is a lifelong tool and would then simply be kept safe in case it is needed in the future.

Q: What if I choose a family member to be my attorney but circumstances change in the future and we are no longer close?

Provided you still have capacity you can revoke an attorney’s appointment without terminating the LPA. If you wished to appoint a new person however, then you would need to make a new LPA.
The best advice I can give you is to plan as much as possible to avoid uncertainly and if your situation changes, check your Will and LPAs and seek more advice and make changes if it becomes relevant.

If you need any advice on Wills or LPA’s contact our Specialist Team on 0800 088 6004.