Probate is a topic many of us don’t know about until we have to deal with it on a personal basis. My clients frequently ask me these common probate questions that I have put into a useful FAQ blog.
Is my Enduring Power of Attorney (EPA) still a valid document?
Yes. Any old EPA documents are still valid. However, EPA documents only deal with property and finance therefore a Health and Welfare Lasting Power of Attorney may still need to be considered.
It may also be a good time to review your EPA and ensure it still fits with your circumstances. Property and Financial LPA documents also allow a bit more flexibility than an old EPA document.
There are two types of LPA: Property and Financial and Health and Welfare. The Property and Financial LPA deals with the management of property, bank accounts, bills and other assets. The Health and Welfare LPA deals with choices such as health and care plans, medical treatment and end of life wishes.
What happens if I don’t make a Lasting Power of Attorney (LPA)?
If you don’t have an LPA and are not able to make certain decisions for yourself you will need someone to legally make decisions for you. You are unable to make an LPA once you have lost capacity.
In order to appoint someone to deal with such matters like paying bills, care costs and decisions about your future care – someone may need to apply to the Court of Protection in order to become your deputy.
A deputy has similar powers to an attorney. The process of becoming a deputy is usually more expensive and time consuming than an LPA. Deputies are supervised by the Court of Protection so are also required to pay annual administration fees and account to the Court of Protection every year. A relative or friend may apply to be your deputy. A professional may also apply.
My family know what I want, why can’t they just deal with everything when I’m gone? / If I don’t have a will what will happen to my assets when I die?
When you die without a valid will your estate will be dealt with according to the rules of intestacy. This means if there isn’t a will, anybody who is entitled to a share of the estate under the rules of intestacy can deal with the estate. The rules of intestacy are basically a pecking order of which relatives will be entitled to somebody’s estate if they didn’t leave a valid will.
Will my estate need a grant of representation?
The nature and value of your assets will dictate whether a grant of representation is required. Financial institutions and banks have different limits on the value to which they will release funds without a grant of representation. If property is held jointly – this will usually pass to the surviving joint owner without the need for a grant of representation. If property is held in the sole name of an individual, houses and land will require a grant of representation in order to sell or transfer it.
Will I have to pay any Inheritance Tax?
This depends on the size, value and nature of your estate and who your estate is left to. As a basic rule, every individual is entitled to £325,000 before they pay any Inheritance Tax. This is known as the Inheritance Tax nil rate band. If your estate is passed to your spouse, it is spousal exempt. Any unused nil rate band on the death of the first spouse can be transferred to the estate of the second spouse to die. There is also an extra residential nil rate band which can be utilised when a main residence is left to descendants. This extra nil rate band is also transferable between spouses.
Will all my assets pass under my will or rules of intestacy?
No, not all assets will pass under the terms of the will or rules of intestacy. Some jointly held assets will not pass under the terms of the will or intestacy but will pass automatically to the surviving joint owner. Some other assets, such as some life insurance policies and pension death benefits, will pass outside of the estate to beneficiaries who have been nominated by the deceased, or at the discretion of pension trustees.