Private Client – Myth-busting

In many cases, clients have preconceived ideas about the law. This is especially the case when it comes to planning for the future. Some may hear a story about a friend or a family member’s situation and think the same applies to them, when this is not always the case.

Below, some of the most common misconceptions are addressed.

“If I don’t have a will, everything will pass to my spouse anyway”

If you are married (or in a civil partnership) and do not have a will, the intestacy rules dictate how your estate will pass.

If you are married and do not have any children, grandchildren or great grandchildren, your whole estate will pass to your spouse.

If you are married and do have any of the above, the first £322,000 of your estate will pass to your spouse, along with your personal possessions. If the value of your estate exceeds this amount, the rest of the estate will be divided into two. One part will pass to your spouse and the other amongst any children.

“If I need to go into a care home, the council will sell my home to pay the care fees”

In England & Wales, the local authorities are required to carry out a financial assessment to determine whether someone is eligible for support towards the payment of care fees. The assessment will consider an individual’s income and assets, which includes a share in any property or land.

In Wales, if you have capital above £50,000 you will be required to pay for all of your own care fees. In England, the cap is £23,250.

The local authority can include the value of your home as an asset when calculating your ability to pay for care. However, some exemptions apply and there may be circumstances where the property is disregarded from the financial assessment.
In circumstances when the property is included in the financial assessment and funds are required to pay for your care, the local authority would not force the home to be sold during your lifetime and can enter into a deferred payment scheme.

“If I have a will, my family will not need a grant of probate”

This is not true.

Your family will need to obtain a grant of probate if the estate includes property or land.

A grant of probate may also be required by other asset holders such as banks, building societies, share registrars and more. Whether a grant of probate is necessary depends on their requirements, which is usually linked to the value of the asset.

“I don’t need a lasting power of attorney, my spouse or children can look after my affairs if I lose capacity”

Unfortunately, our loved ones do not have an immediate right to deal with our affairs on our behalf if we are unable to deal with them ourselves.

Having a lasting power of attorney for both property & financial affairs and health & welfare is therefore very important. In the absence of such documents, many decisions relating to your finances and health could be delayed until the court have approved them as an appropriate person to deal with your affairs.

For more information please contact one of the experts in our Private Client Team.