For those who are not that familiar with court processes and law provisions, the definition of a will and Lasting Power of Attorney/LPA can be confusing. Although both terms are related to each other and share similar characteristics, their uses are different.
With the surge of blogs, bulletins, and other sorts of information online, the search for vital information about these two important documents can be quite overwhelming, making it even more confusing and complicated for those who need to have these two documents processed.
Here at My Estate Planning, we understand your need for accurate and quick answers. In this article, you will find out the crucial differences between a will and a Lasting Power of Attorney/LPA. We will also touch upon topics such as its purpose and the people involved.
Will VS Lasting Power of Attorney/LPA?
As stated above, the will and Lasting Power of Attorney/LPA may have similarities in nature, but their definition and uses are different from each other. Even their importance for the benefit of legal purposes also differs from one another.
What is a will?
Essentially, a will is a legal document that outlines how your assets are distributed and who takes care of your minor children, in the event you pass away at such an inconvenient and unexpected moment.
Anyone who owns a significant amount of money, properties, and important possessions should have a will especially if these possessions need to be passed on to a person to maintain a family business or keep the money in a safe place.
Do note that a will can be challenged through a will lawyer. This is why it is vital to have the will be witnessed to reduce chances of successful challenges against your will. In the UK, if you fail to leave a last will behind, your property and assets will be shared according to the Rules of Intestacy.
Although there is no set time for the will to be read, the only timetable that executors must follow is the tax calendar. Executors are given at least six months to settle the Inheritance Tax. Also, a will can only take effect after the testator’s death.
What is a Lasting Power of Attorney/LPA?
A Lasting Power of Attorney/LPA (POA) is a legal and binding document that assigns to one or more individuals, usually called the Agent of Power or simply Agent, to have some authority to carry out decisions regarding your financial, medical, and legal matters in the event that you are unable to make these decisions on your own.
There are two major types of POAs in the UK. One is the Health And Welfare
Lasting Lasting Power of Attorney/LPA and the other is the Property And Financial Affairs Lasting Lasting Power of Attorney/LPA.
- A Health And Welfare LPA covers your health and general welfare and can only be used when you’re unable to make your own decisions concerning these matters.
- A Property And Financial LPA, on the other hand, deals with the property and financial matters. It is important to note that a POA is only allowed as long as the principal is alive.
Compared to a will, anyone can get a Lasting Power of Attorney/LPA. Whether you have possession or none, you can always get a health and welfare Lasting Power of Attorney/LPA, especially when you need decisions to be made on your behalf at the time when you become incapacitated.
A Lasting Power of Attorney/LPA only takes effect when the principal or the one who made the POA is considered legally incapacitated. For example, if you are diagnosed with serious illnesses such as cancer, the health and welfare Lasting Power of Attorney/LPA can take effect when the doctor declares that you are already incapable of making decisions on your own.
When that happens, getting Lasting Power of Attorney/LPA is highly advisable alongside the property and financial Lasting Power of Attorney/LPA to make sure that everything is set in place even before you become incapacitated.
Acquiring either of the two documents needs the guidance of a legal advisor to make sure that you get the right one for your specific need.
The executor of Estate VS Agent of Lasting Power of Attorney/LPA?
After knowing the differences between a will and Lasting Power of Attorney/LPA, it is also essential to know what sets the executor and an agent apart. This time, let us go through the differences between an Executor: the person in charge of a will, and an Agent: the person in charge of a POA.
Now that we are done with their similarities, let us proceed to their differences:
What is an executor?
An executor is a person or institution assigned by a testator to carry out a living will and manage the affairs of a deceased person’s probate estate. To be an executor, he or she must first apply for probate. Only after the court has granted the applicant can he or she function as an executor.
In contrast with the job of an agent, the executor carries out the business of the dead. That means, only after the testator’s death, can the executor begin to process and settle the will.
What is an agent?
An agent, on the other hand, is a person who has been legally empowered to act on behalf of a person. An agent can be given a decision-making authority through a Lasting Power of Attorney/LPA to process documents and other vital things on behalf of a principal.
To be an agent of Lasting Power of Attorney/LPA, you must be someone that the principal knows, and you must be 16 years old and above. Without any signed consent from the principal, one can never act as an agent of Lasting Power of Attorney/LPA.
A person who served as an agent before can also serve as an executor. However, as mentioned, the former agent has to go to court first to apply for probate. These two jobs do not overlap with each other. The responsibilities of an agent end as soon as the principal dies, and following the death, an executor takes over to carry out and manage the deceased person’s affair.
Can a Person With the Lasting Power of Attorney/LPA Make a Will?
Only the principal can make a will and no one else. Therefore, a person with the Lasting Power of Attorney/LPA cannot, in any way, make a will. Remember that the Lasting Power of Attorney/LPA only covers a limited jurisdiction given by the principal. Any other legal matters not included in the POA cannot be performed by the person with the Lasting Power of Attorney/LPA.
In the UK, when a person dies without a valid Will, the law determines how the estates will be distributed accordingly to the family members.
Choosing to have a POA along with a competent agent is extremely important. After all, you are giving these individuals the ability or power to make critical decisions in your stead. Here at My Estate Planning, we specialise in services such as the creation of legal Lasting Power of Attorney/LPA and making of a will.
We have competent experts who are more than happy to guide you along the process of getting a Lasting Power of Attorney/LPA to make sure that your future is secured. My Estate Planning wants nothing else but for you to have a better understanding of how POA and Final Will and Testaments work.
With that said, we’ve developed our very own booking system to make it easier for you to reach us. You can also give us a call at 0204 516 5969 to talk to our advice team.