Cheap/DIY Wills: A False Economy?

Wills are offered as a loss leader by many solicitors and will writers in the hope that they will eventually profit from being the ones to deal with your estate. As a result, this important service has been devalued to such an extent that many clients are reluctant to pay for something that they assume involves nothing more than ‘filling in the blanks’. If only it were so easy!  

In order to give you good advice, we have to ask you questions. Lots of questions. You might find some of them awkward or intrusive but, without this information, we can’t do our job properly. 

So, what do we need to know? Well, it may seem obvious but we need to get an idea of your financial position. Clients notoriously undervalue their estates by forgetting life assurance policies; death in service benefits; sums payable under pension policies; a potential inheritance from a relative etc. By asking the right questions, we can give you the right advice. Take some recent clients: their combined estates amounted to c.£750,000 but individually, the husband’s was worth £50k and the wife’s £700k. By removing just a few words (‘provided s/he survives me for 30 days’) from their existing wills, we potentially saved them £130,000 in Inheritance Tax.

Even if your estate is far more modest, we’ll still ask you questions. Things like, ‘do you have any children from previous relationships?’. You may have been thinking that the only way to balance the needs and expectations of both parties would be to leave everything to the surviving spouse on the understanding that they provide for your children in their will. We can talk you through other options.

And, the crux of it all – what do you want to achieve? Do you want to ensure a child doesn’t have access to their inheritance until they’re, say 18 or 21? To simply include a direction that funds shouldn’t be paid over until a child reaches a certain age will be completely ineffective, unless you include further trust provisions. 

Of course it’s tempting to go for the cheapest option, especially if you think your circumstances are pretty straightforward. In my experience, there are lots of things clients don’t even realise they need to think about and the examples above only scratch the surface.

What I’m really trying to say is, don’t mistake ‘cheap’ for ‘good value’. You should leave our office feeling confident you’ve made the best possible provision for the people you care about.

Sophie

Don't believe the hype!

There appear to be an increasing number of companies and solicitors promoting products or schemes that they claim guarantee to protect your home, or other assets, against the cost of care. Often these arrangements fail to do anything of the sort. 

They tend to be marketed very ‘slickly’ and information can be presented by qualified professionals, so it’s not surprising families feel they’re doing the right thing.

They’re branded in many ways but you might have heard them being referred to as ‘Asset Protection’ or ‘Family Protection’ Trusts. It’s not uncommon for set up fees to run to several thousand pounds.  

The past success of these schemes has relied very much on local authorities turning a blind eye but funding pressure means they’re now taking a much more aggressive stance.

If a local authority believes that someone has given assets away in order to avoid paying care fees, they may decide this amounts to a ‘deprivation of capital’. The current law is based on an intentions test. Proving intent isn’t easy but, if you enter into an arrangement that was sold to you on the basis of avoiding care costs or perhaps after you’ve had a diagnosis of a degenerative condition such as dementia, the local authority will find it much easier.

A really common misconception is ‘the 7 year rule’. Our clients often think as long as they’ve made a gift at least seven years prior to needing care that they’ll ‘get away with it’. Actually this rule applies to Inheritance Tax and not the means-testing rules for care fees. There is, in fact, no time limit as to how far back a local authority can look.

There might be lots of good reasons for you to establish some form of trust. You might even find an arrangement does mean you avoid having to pay for your care – but it’s by no means a certainty.

A good adviser should spend time with you explaining all the risks and possible consequences.

I would be extremely wary of any adviser that tells you any such scheme is guaranteed to work. I would even go so far as to say that such a claim is disingenuous…

Sophie

To treat or not to treat?

This week the Court of Protection gave an NHS Board in England permission to proceed with risky, but potentially life-saving, treatment against a patient’s wishes.  The patient, known as Mrs K, had schizophrenia and held a ‘delusional belief’ that she did not have cancer.  Evidence demonstrated she was unable to make an informed decision and her family were in agreement that she should have treatment.  However, the solicitor appointed to represent her ‘best interests’ felt the surgery was too risky.

This isn’t the first case to consider the treatment of an incapable patient against their will. In 2010, the Court gave permission to doctors to sedate a woman with learning disabilities and transfer her to hospital for surgery against her express and consistent wishes. The sedative would probably need to be concealed in a drink and she would be sedated for a period following surgery to ensure she didn’t become agitated and leave.

These cases involve complex ethical dilemmas and place massive emotional stress on families.  When is it acceptable to treat someone against their express wishes, if ever?  What would the person have wanted?  Which factors can legitimately be taken into account?  What weight should we give to the views of families?  On the one hand, we often hear stories of profoundly disabled people effectively being denied treatment or families finding DNR notices appearing on files with no discussion.  On the other, it’s crucial not to underestimate the potential psychological damage of being sedated and having invasive surgery against your wishes. 

Perhaps we should all think about the circumstances in which we would or wouldn’t want treatment and about the people we want to make decisions for us, if we are ever unable to make our own.   Living wills, advance statements and powers of attorney are all vital tools we can use to make our wishes clear and guide both our families and professionals about the decisions we want them to make.  These documents are at least as important as your will, if not more so, given they affect decisions while you are actually here!

Nicola

More information

1. The Court of Protection operates in England.  In Scotland, cases would be heard by the Court of Session. 

2. For anyone interested the 2010 case is DH NHS Foundation Trust v PS [2010] EWHC 1217 and the Mrs K is as yet unreported but there are more details here http://www.telegraph.co.uk/news/uknews/law-and-order/9609692/Woman-who-does-not-believe-she-has-cancer-can-undergo-operation.html

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