Protect your interests when will planning on farms

Executors and powers of attorney – most people have heard of these roles and powers. But what do they entail? Alexander Caton of solicitor Charles Russell explains their importance

Executors carry out the wishes of those who appoint them in a will whereas an attorney can make decisions in certain circumstances on behalf of a living person.

Both roles carry what are known as fiduciary obligations and are, ultimately, responsible to the court for their actions.

A fiduciary duty is an obligation to act, with no conflict of interest, in the best interests of another person or group of people.

Those appointed to these roles are also all personally liable for breaches of their duty of care, so these are not obligations to be taken on lightly. The responsibilities may not be handed on to others.

Executors have a duty to administer an estate on the death of the person in whose will they are appointed.

Every adult should have a will unless all their assets are held in joint names and/or they are happy to rely on the arrangements for their family and assets that the intestacy laws will provide.

Failing to draw up a valid will is likely to delay the administration of an estate and could mean that Inheritance Tax (IHT) is paid when there is no need to do so (see box).

It is possible to vary an intestacy or a will within two years of death, but this requires the consent of those affected and if the courts are not to be involved they need to be over the age of 18.

Lasting Powers of Attorney (LPAs) are often drawn up when wills are prepared.

These allow a person appointed (the attorney) to make decisions during the lifetime of the person appointing them, in the event that that person (known as the donor) becomes unable to make those decisions.

LPAs can be made to cover property and financial matters and (separately), health and welfare issues. They allow an individual to state his wishes and give both the attorney and the care provider comfort in setting out who can or cannot act for him. Many care homes insist on LPAs being set up as part of the admission procedure.

Unless your accounts and assets are in joint names, a bank will not generally consent to a person dealing with a spouse’s own accounts without a property and financial affairs LPA in that person’s favour. This could cause problems should a spouse lose mental capacity.

The Land Registry will want to see a certified copy of a property and financial affairs LPA if you are dealing with land held in both names but not held jointly (i.e. where it is held as a “tenancy in common”).

Likewise, it is sensible to have a health and welfare LPA drawn up so that should you lose mental capacity then your spouse, children or other appointee has clear authority over such things as choice of care home and medical treatment.

Failing to put in place the correct arrangements means your next of kin being left to try to deal with your assets or your health matters without clear authority.

Banks can be very unhelpful in this scenario and the next of kin may have to apply to court to be given authority to act.

This is a more expensive, time-consuming and stressful route than simply putting a LPA in place.

A general or a specific power of attorney is useful if you are likely to be unable to deal with your affairs for a period of time during which it is likely that important decisions must be made or signatures needed for documents.

You might, for example, be in hospital or travelling – an attorney can sign on your behalf in that situation and you can specify in which matters that person may act on your behalf.

How to make the right choice– what to consider

Usually your spouse is an obvious choice for executor or your attorney. Likewise children, although that is likely to require more consideration depending on their ages – appointees must be over 18-years- old.

However, some important questions must be considered. Do your children get on? Do you get on with your children? In the case of attorneyship, does your attorney know your wishes or what you are likely to want in a situation? For example, you may have always ear-marked the farm for you son, but will appointing him as an executor or attorney without his sister cause long-term family problems?

Sometimes it is useful to have a trusted friend or more remote family member to act, rather than the spouse or children, or at least to act with them (useful due to the requirements for executors and trustees to act unanimously).

They can bring a degree of independence and may be less emotionally involved in the family affairs. Sometimes it is useful to have a professional appointed, such as an accountant or solicitor. They will charge for their services, but they may have a good understanding of your family and financial affairs without any emotional involvements.

They can act as umpire if needed, and can be useful in taking an independent lead in the administration of the estate or running of a trust. Where there is any possibility of intra-family disputes, it is often recommended that an independent third party act alongside family members, although there is no right or wrong answer on this.

Generally, only those most close to you, that is, a spouse or child, would be suitable for appointment as attorneys under a health and welfare LPA.

Practical steps

Wills don’t have to be drawn up by a solicitor, but it is always better to get legal advice if possible. Although there will be a cost for a will prepared by a solicitor, in the long term it may save more money and a lot of anxiety or distress when compared with a poorly or incorrectly prepared home-made will.

Intestacy example

If a married person with an estate valued in excess of £250,000 dies without a will, their estate will not all pass to their spouse.

A portion will have to pass to the children or, if there are none, to his parents or siblings. This means that the full exemption from IHT will not be available.

Furthermore, inheritance by elderly parents or by siblings who may already be well-off may be IHT inefficient and may not be what the deceased would have wished. In addition, IHT reliefs, such as Agricultural or Business Property Relief (APR and BPR), may not be taken full advantage of.

    A will does not take long to prepare – in extreme circumstances one can be prepared in a day, although usually it takes a couple of weeks in practise.

    A general or a specific power of attorney can be drawn up very quickly, though due to the necessary wording, it is often simplest to ask a solicitor to do the work.

    An LPA can be drawn up without a solicitor’s involvement but asking a solicitor to prepare the papers – this also gives you the opportunity to discuss the LPA and mental capacity regime with a practitioner in the area.

    The Office of the Public Guardian charges a registration fee of £110 per LPA and takes at least six weeks to register an LPA. Whether a will, trust deed, LPA or PA, once the relevant document is executed it is usual practice for the original to be stored in the solicitor’s strongroom and certified copies to be given to the client.

    It will make an executor’s life, a trustee’s life or an attorney’s life much easier in performing their duties if your paperwork is up to date and your “family papers” are together in one safe place.

    You may appoint an executor without the executor’s consent, but generally it is best to ask as he will be able to turn down the role if consent has not been given.

    An executor may appoint others, usually a solicitor, to act for him in putting together the papers to obtain probate.

    You will need the consent of a proposed attorney to act as an attorney under a PA of any kind.

    As far as possible, explain your wishes to your executors and attorneys before they will need to act. This is particularly the case if there are family sensitivities that the executor or attorney may not be aware of.

    If there are family advisors such as solicitors or accountants, let your executors and attorney know of them, and the relevant names and contact details.

    Powers of executors


Appointed in a will to administer an estate on death
    • Role is to execute the terms of the will
Executors are under an obligation to administer the estate (including the paying of outstanding debts and tax liabilities such as IHT) of the deceased correctly
Can be any number from one to four
    • Executors apply for probate – the court document giving them legal authority to act
Primary function is to establish, locate and then gather in assets and distribute according to the will
    • After administration of the estate is complete, executors either hand the estate over to the beneficiary/ies of the will, or they continue to act as trustees – for example, if the will gives the surviving spouse a life interest in the deceased’s estate
An individual may choose either not to act at all (known as renouncing) or to take a step back and to reserve his power while allowing the other executor(s) to act, as long as he has not begun to act
Once an executor acts in a deceased’s estate he must see the process though

    Powers of attorney

There are several types of power of attorney (PA):
A general or ordinary PA is given by an individual (the donor) to another person (the attorney) 
Allows the attorney to undertake the donor’s (financial and other) affairs, either generally or on a specific matter – automatically ends upon donor’s loss of mental capacity 
    • An enduring power of attorney (EPA) is a general PA that is suspended upon the donor’s loss of mental capacity: the attorney then has to apply to register the EPA at the Office of the Public Guardian (OPG) and, upon registration, it revives
It is no longer possible to put in place new EPAs, although any existing EPA signed before 1 September 2007 is valid 
The matters relating to a donor’s health and welfare cannot be delegated to an attorney under a general PA or an EPA
Modern version of the EPA is the lasting power of attorney (LPA) which can cover (separately) property and financial or health and welfare matters
    • A property and financial affairs LPA is executed by a donor and then has to be registered at the OPG before it can be used – once registered it can be used at any time by the attorney
A health and welfare LPA must also be registered at the Office of the Public Guardian before it can be used and, even once registered, it cannot be used until the donor has lost mental capacity
A PA may be revoked at any time through a specific form for ordinary powers of attorney
An EPA or LPA may be revoked by the execution of a new LPA, so long as the donor still has capacity – the court has an overseeing capacity, so an attorney can be removed by the Court of Protection if an application is made to it.

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