‘Protect yourself and loved ones from the 3D’s, death, divorce, dementia’.
According to the Money Saving Expert website, run by Martin Lewis, 8.7 million people receive their weekly newsletter. If you are one of these subscribers, you may have read the recent update named ‘Protect yourself and loved ones from the 3D’s, death, divorce, dementia’.
In this article, our family solicitor and Private Client Legal Executive, George Brooks, will take a closer look at these three topics.
Death:
A commonly asked question is, do I need a Will?
A Will is a legal document setting out your wishes regarding the distribution of your money, property and possessions following your death. It can also provide instructions for your funeral, and who you would choose to raise any minor children in the event of your death.
Where a person dies ‘intestate’, (i.e. without a will), the law determines where your property/possessions go and your wishes will not be carried out. Further, your heirs may end up spending additional time, money, and emotional energy to settle your affairs after you’re gone.
It can be possible to reduce the amount of inheritance tax payable if advice is taken in advance, enabling you to make plans for your children’s financial future.
Divorce:
Although the Money Saving Expert website referred to divorce, it actually discussed marriage, and perhaps more importantly, the problems with not getting married and how this could affect you.
Under English law, until you are married, there is no legal relationship between you and your partner, even if you have children, or own property together. When in a cohabiting relationship, where you are not married, your partner is not automatically entitled to any part of your estate. The law offers certain protections to those who are married, or in a civil partnership, but these do not extend to cohabitating couples, no matter how long you have been together or lived in the same household.
The idea of ‘a common-law spouse’ is often discussed, but the concept simply does not exist. Despite various attempts to reform the law on cohabitation, none have been successful, thus far.
A cohabitation agreement records the arrangement between you and your partner; it can set out how the household expenses are to be split, what shall happen to your assets should the relationship break down, and whether the beneficial interest in a property changes, if one party makes an investment into it. Unless you are married or have written a Will leaving your assets to your partner, the assets will pass according to the non-contentious probate rules, which do not include a provision for cohabiting partners.
A Will, unless made in contemplation of marriage, is also revoked once you marry your partner. Gifts made in a Will to a ‘spouse’ will also fail in the event of a divorce.
It is worth remembering, therefore, that if you have written a Will and intend to get married you change the Will. Similarly, if you were married and then divorce, it is appropriate to reconsider your Will and make any necessary changes.
Dementia:
A Lasting Power of Attorney (LPA) is a legal document that allows you to plan, in advance, any decisions that you would want to be made on your behalf if you lose capacity and cannot make decisions by yourself.
A Lasting Power of Attorney can allow you to nominate the people you want to be able to make those decisions and provide some guidance on your wishes if you lack capacity.
LPAs are governed by the Mental Capacity Act 2005, which protects people who may not be able to make some decisions for themselves, due to Dementia, learning disabilities, mental health problems, strokes, or head injuries, and provides a legal basis for how other people can make decisions on their behalf.
If an LPA has not been created and you lose capacity, it can be costly, demanding, and stressful for any relatives, friends, or carers you may have. Therefore, creating your own LPA is beneficial, not only for yourselves but for these people.
There are two types of LPA; one which deals with Financial Decisions such as paying bills, running your bank and savings accounts, making or selling investments, collecting benefits, buying and/or selling your house, the other deals with Health and Care Decisions, such as determinations on medical treatment or care, or where you should live.
If you have not made an LPA and you have lost your mental capacity, someone can apply to the Court of Protection to become your property and financial affairs deputy. This enables that person to pay bills on your behalf, or organise your pension, and/or they can apply to become your “personal welfare deputy”, which enables them to make decisions about medical treatment, and how you are looked after. As a deputy, that person will be authorised by the Court of Protection to make decisions on your behalf. They must send an annual report to the Office of the Public Guardian (OPG) each year explaining the decisions they have made.
If you would like to discuss any of the topics discussed within this article, including divorce, the drafting of a new Will or an LPA, or to discuss any other area of family or private client law, please contact a member of our team at 01608 656 590.