Wills and Lasting Powers of Attorney – Do I Need Both?
FAQs on the differences between Wills and Lasting Powers of Attorney.
Under a Lasting Power of Attorney (“LPA”), you can appoint someone to manage your affairs on your behalf if you are unable to do so, for example, following a loss of capacity due to a brain injury or dementia. They can therefore be exceptionally useful documents, but while most people understand the need for a Will, many are not so aware of LPAs and why these documents can be equally as important.
When we discuss Wills and Powers of Attorney with clients, we are often asked the same questions about the interaction the two. We therefore set out below these FAQs and our responses, which will hopefully show you just how important we think that you have both a Will and Lasting Powers of Attorney in place.
What is the difference between an executor and an attorney?
An executor is the person appointed in your Will to administer your estate following your death. The undertake tasks such as notifying banks of your death, selling your house and ensuring that your estate is distributed to the correct beneficiaries in accordance with the terms of your Will.
An attorney is the person appointed in your LPA to manage your affairs on your behalf during your lifetime, if you are no longer able to do so. They could therefore be registered on your bank account and manage your financial affairs by arranging payment of your bills, or could be appointed to act on your behalf in respect of health and welfare matters and so make decisions as to your medical treatment.
Although your executors and attorneys can be the same people (and, indeed, often are), they undertake very different roles. The executor only steps in following your death, whereas the attorney manages your affairs during your lifetime. It is important to be aware that just because someone is appointed as an executor in your Will, does not mean they can automatically manage your affairs during your lifetime and vice versa.
I’m appointed as an attorney in a Lasting Power of Attorney for someone who has passed away. Can I use this to administer their estate?
The short answer is no. Although an LPA legally allows the attorney to deal with someone’s financial affairs during their lifetime, this does not extend beyond death. When the “donor” passes away, the attorney’s authority to deal with their affairs comes to an end. Instead upon the donor’s death, the Will comes into effect and that money forms part of their estate to pass under the terms of their Will.
This is why it is very important to ensure you have up to date Wills and LPAs in place, to ensure the correct people are legally appointed to act and can act at the appropriate time in relation to your affairs.
But can’t my family members just sort everything out?
During your lifetime, no-one has an automatic legal authority to step in and manage your affairs for you, even if they are nominated as your “next of kin”. Therefore, if you have close family members who you would trust to appropriately look after your money and to make sensible welfare decisions for you, they should be formally appointment under an LPA, as without such an LPA, they will not legally be able to make these decisions for you.
Following your death, if you do not have a Will in place, your estate will be administered in accordance with the Intestacy Rules. Under the Intestacy Rules, your closest blood relatives will be entitled not only to administer your estate (i.e. act as your executor would), but also to inherit your estate. In some circumstances, the closest blood relatives are not in fact the family members with whom you are closest in terms of your relationship. Therefore, again, it is vital you have an appropriate Will in place to ensure your estate can be administered and inherited in accordance with your wishes.
Wills and Lasting Powers of Attorney – Do I Need Both?
As you will have seen, the short answer is yes! It is vitally important that you ensure that your assets and health and welfare matters are appropriately managed on your behalf during your lifetime if for any reason you are unable to manage your affairs. Equally, it is vital to ensure that your estate is properly administered and inherited by your intended beneficiaries following your death. The way that both can be achieved is by making a Will and Lasting Power of Attorney.
If you would like to discuss these matters further then please do not hesitate to contact a member of our Wills, Trusts and Estates Team.
