As restrictions begin to ease this week and things gradually start returning to normal (or the new normal as it is being dubbed), it is important for people to remember what the last 14 months have taught us, particularly in relation to the next generation and how life, at any unexpected moment, can throw a curveball which means that it is all the more important for today’s next generation to have their estate planning affairs in order. Many, if not all, of us know someone who has been unwell over the last 14 months with COVID-19 and often the thought that crosses people’s minds is ‘I really must get my will done’ or ‘I really must get my will updated’ but then life gets back into full swing, and it gets forgotten about. Alarmingly, 54% of people in this country do not have a will* and whilst our team, like many other teams dealing with wills across the country, have seen a significant increase in people enquiring about wills, there will still be an alarming proportion of people who do not have a Will in place, and I suspect those people are within the next generation predominately. Many people are unaware that the Government has written a will for you if you do not do so yourself, and which says how your assets pass on death, to whom and in what proportions. It is therefore more important than ever before to take away the lessons that the last year or so has taught us and take advice about your will to ensure your estate passes as you would like on death.
In addition to wills, and whilst it can only be a positive step to get the next generation thinking about their wills, I often get faced with a look of slight alarm when I mention to clients in their 20s and 30s about powers of attorney, with the response often that they are only needed when you get a diagnosis of a condition causing cognitive impairment, such as dementia. There are two types of powers of attorney, one for property and finances, and one for health and welfare. These are called Lasting Powers of Attorney (LPAs). The LPA for property and finances is effective all the while you have capacity and continues to be effective should you lose capacity, such as because of a cognitive impairment, in the future. The example I have always used is that if you break the arm you write with and need to sign a contract on your house purchase or sign papers for a new bank account, then the LPA can be used by your attorneys at your direction to sign those papers. However, since COVID-19 struck in March 2020, the unexpected happened and there were people in their 30s catching COVID-19 and being so unwell they needed to have some assistance managing their finances but did not have LPAs in place. LPAs are therefore relevant for all life eventualities, are vitally important regardless of your age and I would encourage all of the next generation to put in place LPAs. Think of an LPA like an insurance policy, have peace of mind that it is there but hope it is never needed.
In addition to personal finances, for people with business interests, or who are in the early stages of starting a new business, a LPA limited to your business interests is equally as important as one for your personal interests. Have you (and your fellow business owners) considered what happens should one of you lose capacity, or die? Business planning is key to the succession of that business, which is why it is so important that your will deals with your business interest (and you have a Shareholders’ / Partnership Agreement stipulating how the transmission of the company on death would work) and you equally have LPAs in place to cover a situation where you do not have capacity to deal with the business. The last 14 months has allowed people the time to think about their lives and venture into new businesses and in the midst of that excitement, practicalities such as a business LPA often get overlooked, which could be catastrophic in the future.
This week marks a positive change to life as we have known it over the last year or so and I would encourage all of the next generation to take another positive step by getting their estate planning matters in order so that they and their families and loved ones can put their minds at ease, should life throw another unexpected curveball our way.
*Based on a Which 2018 survey