Preparing properly just makes sense.
Trusts
Trusts in wills are widely used in England & Wales but not everyone understands what a trust will is and how it works.
A trust exists when one or more people look after property or other assets for the benefit of one or more other people. Trustees are the people who look after the property in the trust for the benefit of others.
Trusts in wills are most frequently used to protect property, and they’re widely used when providing for children in a will or when taking care of vulnerable loved ones.
The people who look after the property in the trust are called trustees, the people who stand to benefit from the property in the trust are called beneficiaries.
If your will creates a trust then, once your executors have carried out the terms of your will, the trustees will go on to manage the trust property for however long the trust lasts. Trustees normally have the same amount of control over trust property as if they owned that property themselves however the terms of the trust are set out in your will.
Trustees owe a legal duty to the trust’s beneficiaries, meaning they must manage the trust for the benefit of the beneficiaries and must act in the beneficiaries’ best interests at all times.
Being a trustee can be a difficult and time-consuming role, and trustees will often need the support of legal experts and/or a solicitor that specialises in trusts if they are to carry out their roles correctly.
Trustees should be trustworthy, financially responsible and have good administrative skills. It’s important to talk to someone you’re considering as a trustee before you appoint them. You should also get them to agree to their appointment, as a reluctant trustee may not be nearly as effective as a willing trustee or may even refuse to act after your death.
Lasting Power of Attorney
A power of attorney is a legal document that allows someone to make decisions for you, or act on your behalf, if you're no longer able to or if you no longer want to make your own decisions.
There are a number of reasons why you might need someone to make decisions for you or act on your behalf:
This could just be a temporary situation: for example, if you're in hospital and need help with everyday tasks such as paying bills.
You may need to make longer-term plans if, for example, you have been diagnosed with dementia and you may lose the mental capacity to make your own decisions in the future.
Mental capacity means the ability to make or communicate specific decisions at the time they need to be made. To have mental capacity you must understand the decision you need to make, why you need to make it, and the likely outcome of your decision.
Some people will be able to make decisions about some things but not others. For example, they may be able to decide what to buy for dinner, but be unable to understand and arrange their home insurance. Alternatively, their ability to make decisions may change from day to day.
Needing more time to understand or communicate doesn’t mean you lack mental capacity. For example, having dementia doesn't necessarily mean that someone is unable to make any decisions for themselves. Where someone is having difficulty communicating a decision, an attempt should always be made to overcome those difficulties and help the person decide for themselves.to make or communicate your own decisions before setting up a power of organisation called the Court of Protection may become involved.
There are different types of LPA and you can set up more than one.
LPA for financial decisions
An LPA for financial decisions can be used while you still have mental capacity or you can state that you only want it to come into force if you lose capacity.
An LPA for financial decisions can cover things such as:
buying and selling property
paying the mortgage
investing money
paying bills
arranging repairs to property.
You can restrict the types of decisions your attorney can make, or let them make all decisions on your behalf.
If you’re setting up an LPA for financial decisions, your attorney must keep accounts and make sure their money is kept separate from yours. You can ask for regular details of how much is spent and how much money you have. These details can be sent to your solicitor or a family member if you lose mental capacity. This offers an extra layer of protection.
LPA for health and care decisions
This covers health and care decisions and can only be used once you have lost mental capacity. An attorney can generally make decisions about things such as:
where you should live
your medical care
what you should eat
who you should have contact with
what kind of social activities you should take part in.
You can also give special permission for your attorney to make decisions about life-saving treatment.
Don’t assume
If you’re married or in a civil partnership, you may have assumed that your spouse would automatically be able to deal with your bank account and pensions, and make decisions about your healthcare, if you lose the ability to do so. This is not the case. Without an LPA, they won’t have the authority.