Published on: 3rd July 2017

What is Estate Planning?

Figures show that 48% of over 55 year olds who have not written a Will, simply just "haven't got around to it". Wills, including a Life Interest in Property Trust, together with Lasting Powers of Attorney are solid Estate Planning techniques. The following case study shows what can happen. Mr & Mrs Smith and Mr & Mrs Brown were both healthy, happily married couples in their sixties.

Following a meeting with a Consultant from Casey & Associates, Mr & Mrs Smith decided to follow the Consultant's recommendation to create Wills, to include a Life Interest in Property trust, as well as create and register Lasting Power of Attorney (LPA) documents. Mr & Mrs Brown meanwhile decided to "think about it" and said they would get around to sorting their affairs at a later date.

Before Mr & Mrs Brown got around to it, Mr Smith & Mr Brown each suffered an unexpected stroke within a few days of each other. As a result of their stroke, they each lost mental capacity. When bills and bank statements started to arrive, Mrs Smith was immediately able to use the Property and Financial Affairs LPA to assist with Mr Smith's finances. Furthermore, Mrs Smith was also able to use the Health & Welfare LPA to help decide the treatment Mr Smith would have wanted. Mrs Brown, however, had to apply to the Court of Protection for a deputyship order.

Whilst it is similar to an LPA in that you can appoint a Property & Financial Affairs deputy and a Personal Welfare deputy, it is a lengthy and expensive process. Furthermore, the deputy has to purchase an insurance bond to cover the assets they are handling. A few months later, Mrs Smith and Mrs Brown unfortunately pass away within a few days of each other. Unable to care for themselves, Mr Smith & Mr Brown each have to go into a care home and as a result, their assets (savings and the family home) are assessed by the local authority to pay for care. Half of the Smith family home went into a Life Interest in Property Trust for the Smith's children when Mrs Smith passed away.

This half of the family home cannot be assessed for care fees and so is protected for the children. None of the Brown's family home is in trust and so the local authority can assess the value of the whole house to pay for care fees. In due course the Brown's family home is sold to pay for Mr Brown's care. After many years in the care home, both Mr Smith and Mr Brown sadly pass away. Mr Smith's estate was distributed as per his wishes stated in his Will. His chosen beneficiaries received his estate which included at least half of the Smith family home.

Unfortunately, as Mr Brown had not written a Will, his estate passed via the laws of intestacy. His stepchildren, whom he had regarded as if they were his own children received nothing. Furthermore, Mr Brown's assets had been hugely depleted due to care fees, and his beneficiaries did not receive the significant amount Mr & Mrs Brown would have hoped them to. Please see below for a table of events.

	Mr & Mrs Smith	Mr & Mrs Brown
Accepted advice from Casey & Associates Consultant
Created Property & Financial Affairs and Health & Welfare LPAs
Wrote a Will
Mr lost capacity
Mrs is able to immediately assist with Mr's finances
Mrs is able to make immediate decisions on Mr's care and treatment
Mrs passed away
Half of the family home goes into Trust
Mr goes into a care home
Local Authority carry out financial assessment
Protection for at least 50% of family home
Mr passed away
Distribution according to wishes of Mr & Mrs

If you are a home owning couple and you do not yet have Wills, which include a Life Interest in Property Trust, together with Lasting Powers of Attorney please contact us here.

If you have any questions on the above please click here.

If you would like to see a video which shows a further benefit of a Will with a Life Interest in Property Trust please click here.

If you would like a Consultant to visit you please click here.

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