Frequently Asked Questions
|What are Pre Paid Funeral Plans?||What is Lasting Power of Attorney?||What is Life Assurance Plan?|
|What is Intestacy?||What is a Life Assurance Plan?||Why should I make a will?|
Q: What is a Lasting Power of Attorney and Why do I need one?
Lasting Powers of Attorney were introduced in 2007 to replace the old Enduring Power of Attorney.
There are two types of Lasting Power of Attorney (LPA).
- One to cover Property and Finance and one to cover Health and Welfare.
- The Property and Finance LPA gives our loved ones or trusted friends the ability to look after our finances, banking, paying bills etc and even buying/selling a house on our behalf if we become unable to do so.
- The Health and Welfare LPA takes care of the social and medical needs, where we live, what we wear, medical care and even down to turning off a life support machine.
- The health and welfare LPA has been underused as people see more benefit in the property and finance LPA, however, you may recall the woman who was arrested for taking her mother out of a care home when it was going to go into lockdown. If she had an LPA for Health and Welfare she would have had no trouble in taking her mother out of the home.
- I always advise clients to take both LPA’s out, yes it costs more to have two, however, compared with the costs hassle and time involved in dealing with a loved one’s affairs if there is no LPA in place, the cost of two LPA’s is minimal.
- If we do not have LPA’s in place and we lose the capacity to make decisions for ourselves our family will have to apply to the Court of Protection for “Deputyship”. Currently, the application fee for of Deputyship is £365 per application (£730 for both LPA’s Property & Finance and Health & Welfare). Plus an annual fee of £320 for general supervision.
- The cost of setting up both LPA’s through me is currently £180 each, the cost of registering the LPA’s with the Office of the Public Guardian (OPG) is £82 each.
A total cost of £524 for the two LPA’s for one person. Compared with the £730 application fee for Deputyship and an annual fee of £320.
- At the moment the cost for me to set up LPA’s for a couple including the registration fee to the OPG is £1,000. This cost can be spread over a period between 1 & 5 years starting from around £28 per month.
So to summarise it is more cost effective to set up LPA’s while we are able to do so. For a couple to set up and register both sets of LPA’s the total cost is £1,000 with no further fees to pay.
The cost of applying for “Deputyship” with the Court of Protection if there are no LPA’s in place for one person is £730 plus the annual fee of £320. If that person lives 10 years assuming no increase in the annual fee the total paid would be £3,930. (Compared with £524 to set up and register both LPA’s for one person or £1,000 to set up and register LPA’s for a couple).
Q: Why do I need a Pre-Paid Funeral Plan?
To protect your family from unexpected costs and uncertainty about your final wishes.
A pre-paid funeral plan will enable you to pay for your funeral in advance, giving you peace of mind that you are protecting your loved ones from having to find the money for your funeral and ensuring that everything is as you would have wanted it.
You can take out a funeral plan to pay for your own or someone else’s funeral, as long as it’s held in the UK.
Q: Why not take out a Life Assurance Plan?
The advantage that a funeral plan has over a life assurance policy is that it will always cover the whole cost of a funeral, whereas the sum payable from a life assurance policy may not fully cover the cost of a funeral due to the effects of inflation.
Q: Are Funeral Plans Expensive?
A Pre-Paid Funeral Plan is not expensive, prices range from £2,000 to £4,000 depending on what is required.
Buying now is cost-effective as the cost of a Funeral will increase in the future. The estimated cost of a Funeral will be over £10,000 by 2029.
You can spread the cost of a Funeral Plan to fit your current budget, with an initial deposit of as little as £250.
Q: Why should I make a will?
A: Your will is your way to tell everyone what should happen to your money, possessions and property after you die (all these things together are called your ‘estate’). If you don’t leave a will, the law decides how your estate is passed on – and this might not be in line with your wishes.
You will need a will because:
- If you don’t write a will, everything you own will be shared out in a standard way defined by the law – which isn’t always the way you might want.
- A will can help reduce the amount of Inheritance Tax that might be payable on the value of the property and money you leave behind.
- Writing a will is especially important if you have children or other family who depend on you financially, or if you want to leave something to people outside your immediate family.
- A will is your way to be sure who will have your money, property and possessions when you die.
- You can also use your will to tell people about any other wishes you have, such as instructions for your burial or cremation.
Q: What happens if I don’t leave a will?
A: If you don’t have a will when you die, your money, property and possessions will be shared out according to the law instead of your wishes. This can mean they pass to someone you hadn’t intended – or that someone you want to pass things on to ends up with nothing.
When you die without leaving a will, the law decides who gets what and how much, and it doesn’t matter what your relationship with those people was like when you were alive.
By leaving a will that says clearly who should get your property and money when you die, you can prevent unnecessary distress at an already difficult time for your family or friends. For example, some parents have had to sue their own children to get a share of their partner’s estate when their unmarried partner dies. The law says that in this situation the children get everything.
Q: What is ‘Intestacy’?
A: Dying without a valid will is called intestacy or dying intestate.
The law about exactly who gets what is different in England, Wales, Scotland and Northern Ireland, but there are some common problems wherever you live.
Common rules if you don’t make a will:
- If you’re not married and not in a civil partnership, your partner is not legally entitled to anything when you die.
- If you’re married, your husband or wife might inherit most or all of your estate, and your children might not get anything (except in Scotland). This is true even if you are separated but not if you’re divorced.
- If you have children or grandchildren, how much they are legally entitled to will depend on where you live in the UK – but if you make a will you can decide this yourself.
- Any Inheritance Tax that your estate has to pay might be higher than it would be if you had made a will.
- If you die with no living close relatives, your whole estate will belong to the Crown or to the government. This law is called bona vacantia.