We’re heading towards the end of the year and reflecting on the things we’ve enjoyed and what hasn’t gone quite so well. As will writers, we often find ourselves thinking about the clients we tried to help after something had gone wrong. So, we thought we’d share some of our nightmares before Christmas so you can avoid the pitfalls.

DIY will-writing kits

We once worked with a client to set up a deputy order as they could no longer manage their financial affairs and didn’t have a Lasting Power of Attorney (LPA) in place. When we asked about their will, we discovered that they’d used a DIY will-writing kit from the Post Office before having surgery.

The Post Office will-writing kit consisted of two sets of double-sided A4 pages for a will if you are situated in England and Wales, and another two sets of  A4 pages if you live in Scotland.  They’d given specific gifts and appointed executors on the pages for England and Wales and had signed and dated them. Where instructions on how to deal with the residual estate should have been, there was a blank page. The instructions for the rest of the estate were written on the Scotland page, which wasn’t signed or dated. That meant we’d struggle to get it through probate because it hadn’t been properly signed. There had been a falling-out in the family, but since the client had lost capacity, they couldn’t change it.

People say using the Post Office form is easy, but it’s more complicated than you think. Most people need a plan B, and you may also need to include a trust depending on your circumstances. Every client says it’s more complicated than they thought after speaking with me about their options.

Incorrect information on a Lasting Power of Attorney

You can complete your LPA documentation online, but the process isn’t always straightforward. We worked with a family who had applied for LPAs themselves, only to have them rejected three times. When they finally received the approved version, they realised some of the details were wrong. In particular, there were misspellings of names and incorrect dates of birth. That’s when we got involved.

If the information on your LPA doesn’t match your representative’s ID, you often won’t be able to use it. Financial institutions like banks and building societies will always ask for ID, and if the details don’t match, they can refuse to let your attorney access your accounts. That could be serious if the mortgage needs to be paid and you can’t manage your finances. It can be less of an issue with health and welfare LPAs, but doctors and care homes are getting hotter on checking ID. If you’re creating your LPA yourself, always check your attorney’s ID carefully to make sure you have their correct name and date of birth.

Ignoring trusts in a will

Since 2007, spouses and civil partners have been able to share their inheritance tax allowances. This includes the residential nil rate band that reduces the amount of inheritance tax you pay when leaving the family home to your children or grandchildren. Before that, we could use trusts to mimic the effect of inheriting a tax allowance, so if you have an older will, it might include a trust which isn’t needed. We use trusts in other ways, to protect your home from care home fees or leave bequests to vulnerable or younger people.

The problems occur when people don’t understand that their loved one’s will includes a trust and ignore it. A trust in a will goes live upon death, and they have to be registered with HMRC. If it’s not needed, you can wrap it up. That must be done within 2 years. Alternatively, if needed, it must be managed. There are rules to follow, and the trust must be in the trustees’ names. There are potential tax implications and fines if you don’t do it properly, so getting proper advice can help you understand what you need to do.

If you need to make a will or create a Lasting Power of Attorney without the nightmares, we can help. Get in touch using the form below or call us on 0116 380 0752.