Estate Planning After A Terminal Diagnosis: Why Wills And Lasting Powers Of Attorneys Matter
The recent announcement from Lucy Davis (famously known as Dawn Tinsley from the television show The Office) that she had been diagnosed with stage IV incurable breast cancer highlights the importance of prospective estate planning. A terminal diagnosis can bring into focus the need to ensure personal, financial and family arrangements are in order. Estate planning goes beyond just tax and legal formalities and ensures that an individual has control over their wishes.
The importance of making/reviewing a Will
Fundamentally, a Will gives an individual prerogative to state who should inherit their estate and who should administer their estate. Where applicable, one may add other provisions such as funeral wishes or who should act as a guardian for any minor children. It is particularly important to make or to update an existing Will in situations where the family situation is complex. In the absence of a valid Will, the estate will be distributed in accordance with the statutory rules of intestacy. Under these rules, a testator/testatrix’s personal wishes may not be reflected. A Will also allows an individual to choose who they want to have the responsibility to administer the estate. This includes collecting assets, paying liabilities and distributing the estate in accordance with the Will. An individual may choose to appoint a family, friend or professional executor (such as a law firm) as the executor of their Will. Hence, if an individual wants control over the effect of their wishes, it is important that a valid Will is prepared accordingly.
Timing/Capacity
In the context of a terminal illness, capacity and timing in the preparation of a Will is key. To make a valid Will, a person must have testamentary capacity. This can be affected by an individual’s terminal illness as they may reach a point of cognitive decline or fluctuating lucidity. If a Will is made at this point, then this increases the risk of a challenge later down the line. This is the reason a solicitor will want to take instructions directly from an individual to ensure that the nature and effect of their Will is understood.
Lasting Power of Attorney
A terminal diagnosis should also prompt consideration of a Lasting Power of Attorney (LPA). This differs from a Will which takes effect on death whereas an LPA takes effect during the lifetime of the individual. An LPA allows attorneys to make decisions on behalf of a person if they lose capacity. This will be in the context of their finance and property of in the context of their health and welfare. An LPA must be made whilst an individual has the mental capacity, and it is therefore important not to leave this too late. In the context of a terminal illness, an LPA can provide reassurance that important decisions will be handled by people chosen by the individual.
Planning ahead after a terminal diagnosis will be emotionally difficult. However, it is important to also see this as a way of regaining control, protecting your loved ones’ interests and ensuring that your wishes are respected. A properly drafted Will along with a Lasting Power of Attorney where appropriate will provide clarity both during a person’s lifetime and after death.
If you or a loved one has received a terminal diagnosis, it is important to seek legal advice as soon as possible. Contact our specialist Wills & Probate team on 0330 822 3451, who will provide expert legal advice and guidance.