A recent report from the Solicitors for the Elderly has focused on the risks of DIY Lasting Powers of Attorneys and Wills. With the ever growing power of the internet and the constant desire to make financial savings, the amount of DIY legal forms on offer has never been greater, so what are the risks and is the potential short-term financial benefit worth not seeking professional advice?
What is a Lasting Power of Attorney?
Lasting Powers of Attorney (LPA's) are legal documents that enable a person to appoint a chosen 'attorney' to handle their affairs in the event that they are unable to do so themselves if, for example, they lose their mental capacity.
There are two types of LPA:
- Health and welfare
- Property and financial affairs
You can choose to make one or both and each will give the 'attorney' (the person in charge of handling affairs) the power to make decisions on the 'donor's' (the person without mental capacity) behalf. LPA's are powerful and complex legal documents and as such, the correct drafting of such documents is imperative.
What is the risk of a DIY Lasting Power of Attorney?
- Mistakes in the application
Whilst a DIY LPA might seem like a more cost effective method, if there are any mistakes made on the form it will be rejected and have to be resubmitted incurring a fee for reapplication (£55) or even a whole new application (£110 per document).
If mistakes are not found in the application but are present, the LPA could very well be rejected at the time when you need to use it. Banks, Utility providers, Doctors and other professionals have stringent checks and if a mistake was made in the drafting of the LPA then they will not accept it. This could cause significant delays and stress at the time when the LPA is designed to relieve just that.
- The applicant doesn't have full capacity
There is the potential that rushed applications could lead to abuse. A relative or friend appointed without being advised of the Attorneys duties under the Mental Capacity Act could act inappropriately.
If the applicant no longer has mental capacity, an LPA will no longer be an option. Instead, the Court of Protection will appoint a Deputy and that person may not be who was originally intended.
The role of a solicitor is not only to draft the document correctly but also to provide counsel and support the donor. Solicitors can also ensure the attorneys know their duties and the limits of their powers, e.g. making gifts or investing. There is a real danger with DIY LPA's that a donor could be persuaded to sign something without fully realising the repercussions.
A valid LPA must include a certificate from an independent third party confirming that the donor understands the purpose of the LPA and the powers conferred by it. They also confirm no undue influence or fraud is being used to manipulate the donor into creating the LPA. If you instruct a solicitor then the solicitor will also provide the certificate and as they are professionals regulated by the Solicitors Regulation Authority this is an important safeguard for you.
Why is my Will important?
Having a Will ensures that all of the savings and assets that make up your estate are distributed in the manner that you intend after your death. Making sure that your friends and family are provided for in whatever way you see fit. If you die before making a Will your estate will be distributed in accordance with the Intestacy Rules which can be unjust and unfair.
What are the risks of a DIY Will?
Like LPA's, many DIY Will making facilities are now offered online and by several companies allowing you to do it yourself. You can buy 'Will making kits' from high street shops or fill out online forms. The seeming benefit of this DIY method is primarily the cost.
- Mistakes in drafting your Will
Inaccuracies in drafting can lead to partial intestacy i.e only some of your estate goes where you want and the rest is distributed under the intestacy rules. For example: "I leave £10,000 to my daughter" but your estate is worth £50,000 and you haven't specified where the rest should go then the £50,000 would fall under intestacy rules to dictate who receives the remainder.
- Not witnessed correctly
If a Will is not witnessed correctly then it can be rendered invalid, often with the error being irreparable, as the mistake is only discovered post death.
- Potential risk of being contested
A DIY Will may be more susceptible to potentially being contested on grounds that at the time of making the Will you did not have the capacity to do so. A solicitor can get a doctor to provide a capacity assessment to prevent this and ensure the correct legal test of capacity is applied. The DIY drafting may well be somewhat ambiguous and thus leave the Will open to being contested by jealous family members or the like.
- Complex family situations
With the increase of blended families and second marriages the 'simple' Will concept is becoming less common and the complexity of a Will may well depend on the make-up of your family. For example, if you cohabitate but are not married then you will not automatically have rights to a partners estate if the Will fails to stipulate what should pass to the survivor. If you get married after making a Will then the Will can be automatically revoked unless it expressly states otherwise.
- Changes in circumstances
Sometimes, you might not consider a change in your circumstances requires your Will to be updated, but lawyers will know.
Take for example a scenario where you own an old piano which you would like your nephew to inherit the piano upon your death. You draft the Will yourself and gift the piano to him. A few years later you purchase a newer, much more expensive piano and sell the previous one you owned when you drafted the will, you don't think this is a problem as you refer to a piano in your will. Right?
Wrong! Upon your death if you have not changed the Will your nephew may not receive the newer piano as that was not the piano you owned when you drafted the original will. The newer piano could fall under intestacy rules and go to someone who you never intended it to.
For most people the purpose of drafting LPAs and Wills is to give peace of mind and reassurance that your wishes will be respected in the future and to relieve the stress for family and friends during emotional times. The danger with DIY Wills and LPAs is that you risk not doing either, leaving them instead with a costly legal minefield.
At Clapham & Collinge, we have dedicated expert solicitors who can ensure that these significant legal documents are not only correctly drafted but that you receive expert counsel on these matters.
Contact us today to discuss your individual requirements in further detail, we'd be delighted to help. Call us on 01603 693500 or email us using 'Make an enquiry' form appointments available at our Norwich, North Walsham, Sheringham and Brooke offices.
For more information on Making a Will please see our Making a Will page.
For more information on Lasting Powers of Attorney please see our Lasting Powers of Attorney page.