Posted on Dec 21, 2018 in Private Client by Morna Coutts
At this time of year, it can feel like life is one very long ‘to do’ list. Christmas shopping, cooking, baking, wrapping, Nativities, Christmas parties…we need not go on!
However, as 2018 draws to a close and with 2019 now close at hand, you may be thinking ahead to a different type of ‘to do’ list and making resolutions for the new year. Why not take up a new hobby, join a gym or…make a Will?!
We would encourage you to consider using the close of this year and beginning of the next to reflect upon whether the following ‘to dos’ would be worthwhile considering for you.
Making a Will
Research suggests that only a third of the population have a Will in place. If you are one of those who do not, a Will can be straight forward to put in place.
Having a Will in place ensures that your wishes on how your assets are to be distributed when you die are met. By making a Will, you choose who will carry out the administration of your estate (your ‘Executors’) and you may give funeral instructions, make legacies of specific items or sums of money, or specify the way you wish your whole estate to be divided.
If you are a parent, having a Will in place allows you to nominate a guardian to look after any children aged under 16 in the event that there is no surviving parent with parental responsibilities. This avoids the need for the Court to appoint a Guardian therefore avoiding the need for grieving relatives to go to court, and potentially reducing the risk of disputes over who should be appointed.
If you die without making a Will (‘intestate’) then your estate is distributed by the operation of law. This may or may not be in accordance with your wishes.
Granting Power of Attorney
You may be more familiar with a Will than a Power of Attorney. A Power of Attorney is a legal document in which one person gives another the power to act on their behalf. You must have the ability to make your own choices and decisions at the time and be capable of communicating these in order to grant a Power of Attorney. A Power of Attorney cannot be granted without this understanding (known as ‘capacity’).
There are two types of Power of Attorney; a Continuing Power of Attorney grants the Attorney the power to deal with an individual’s financial and administrative affairs on their behalf, and a Welfare Power of Attorney grants the Attorney the power to make decisions regarding the individual’s personal welfare. You can grant either separately, or both can be drawn up in a single document.
Once in place, a Power of Attorney must be registered with the Office of the Public Guardian for the Attorney to use the powers granted to them. Depending upon your wishes, the ‘trigger’ for the financial powers can vary depending on your wishes: the powers can come into effect as soon as the document is registered with the Office of the Public Guardian, if you consent to their use, or only if you lose capacity. The welfare powers, in contrast, can only be exercised once capacity is lost.
A Power of Attorney is a safeguard. It may never be needed. However, if you lose capacity without a Power of Attorney in place, a costly court process will be involved to seek the powers required in a Guardianship Order.
Having a Power of Attorney in place means that in the event that you are unable to deal with your affairs a person of your choice will be able to act without any additional hurdles. Please contact us if you would like to discuss this further.
Drawing up a Living Will
A ‘Living Will’ is a formal document in which an adult indicates their wishes in respect of treatment that they would want to receive (and importantly what treatment is not to be administered) in an emergency or when they cannot express their views.
It is an opportunity for an individual to confirm how far they want medical staff to go to keep them alive following a life-altering event such as a major stroke, paralysis or the later stages after a terminal diagnosis.
In Scotland, Living Wills are not specifically covered by law. However, a validly made Living Will is likely to be legally binding on medical staff provided that you were mentally competent when it was put in place, understood the consequences of refusing treatment, you were not influenced or coerced into putting the Living Will in place and the circumstances in which you wish the Living Will to take effect have occurred.
The law does provide a framework for regulating decision making relating to the welfare of adults who are too ill to participate in the decision making process. A key part of that is that those making the decisions on behalf of a person must take account of the individual’s past and present wishes. The British Medical Association strongly supports the principle of Living Wills. On that basis, medical staff are therefore likely to be bound by a Living Will but this point has never been fully tested in the courts.
Tax Planning and Asset Protection
It may be that you have a Will, Power of Attorney (and perhaps a Living Will) in place already but that you have concerns about the potential inheritance tax implications of your estate, or that you have valuable business assets that need more careful attention when planning for the future.
Tax is a complicated, continually changing area. Because of this, it makes sense to take specialist advice to ensure that you are protecting your assets, using the exemptions you are entitled to and minimising your exposure to tax.
Seeking expert tax advice and guidance early about your specific situation is a sensible move, enabling you to effectively plan ahead for you and your family.
If you already have these documents or strategies in place but they were made some time ago or you simply don’t know where to begin our specialist Private Client team can help. We suggest that you regularly review whether the documents and strategies you have in place still meet your needs. If, on the other hand, you simply don’t know where to start, we would be delighted to meet with you to discuss the ways we can assist and make recommendations based on your own circumstances.
Morna Coutts and Lydia Papandrianou are Solicitors in our specialist Private Client team. For more information or advice on Wills, Powers of Attorney or Inheritance Tax please contact Morna or Lydia on 0131 225 8705, or alternatively contact any member of the Private Client team.
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