5 common misconceptions in relation to Wills and Powers of Attorney
1. My attorney is my executor
Unless you have formally prepared a Will and a Lasting Power of Attorney appointing the same person to act in both of these roles, there is no transition from attorney to executor when you die.
An attorney acts during lifetime and can often be appointed when you are unable to make your own decisions regarding your health and personal welfare, or your property and financial affairs. Once you die the role of an attorney ends.
An executor is appointed by your Will and can only act upon death. Your executor cannot assist you during lifetime (unless you have formally appointed them under an Enduring or Lasting Power of Attorney)
2. You only need a Power of Attorney when you are elderly
Sadly we have had cases where individuals and in particular business owners have been in an accident, and have been unable to manage their own affairs. In these circumstances it is useful to have an attorney appointed who can step in and help.
3. I have lived with my partner for many years; they will inherit my estate if I die
Under current law there is no entitlement for non married couples to benefit from an estate. If you don’t specify your wishes in your Will then your estate will be governed by the Intestacy Rules. The Intestacy Rules dictate where your estate goes when you die. There is no reference to non married couples within these Rules.
4. I have a Will. I made it years ago.
We recommend that you keep your Will under review and check it every 5 years. Your circumstances will change and, legislation changes. It is best to keep your Will fully up to date. The private client team at MLP law offer a free Will review service.
5. If I give an asset away to my children then I won’t have to pay Inheritance Tax on this asset
Provided you live for 7 years from the date of giving away this asset AND you no longer benefit from it then this statement is correct. If however, you give an asset away and you continued to benefit from this asset (for example if you transferred your property to your children and continued to live there) then this is regarded as a gift with reservation of benefit and the asset will fall back into your estate for Inheritance Tax purposes, despite when the gift was made.
For more information or to discuss any of the above then please contact our Wills, Trusts and Probate team on 0161 926 9969 or contact firstname.lastname@example.org