Pod Insights The Martin Lewis Podcast Grown Up Stuff: (Free) Wills & (even more important) Power of Attorney About this episode Martin Lewis tackles wills and power of attorney with Melinda Giles, Member of the Law Society’s Wills and Equity Committee, and Austin Lafferty, member of the Council of the Law Society of Scotland. Plus, Mastermind is all about your credit file.
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Transcript 14,739 words · 9 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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1:44 Martin Lewis? Hello, I'm Martin Lewis and this is the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. Usually, much of it comes from a BBC Radio Five Live show with Adrian Charles, though today it's a hybrid, half-five-live, half-pod-only special. And this show is one for grownups. It's about the stuff we don't want to think about, but all do need to think about: wills and power of attorney. It's peace of mind planning at its best, and I'm joined by top lawyers so we can really get into the nitty gritty. In today's pod, how you can get a free solicitor drafted will if you act quickly,
2:27 Martin Lewis? and how to know if your current will is still valid. Then the legal stuff, including when you need a will. Can you get a trust to avoid your home being used to pay for care home fees? Who to appoint as executors? And can your will bind your spouse once you die? After that, it's on to power of attorney, arguably more important than a will. With it, if you lose mental capacity, your loved ones may be locked out of paying for your care. And there's legals with power of attorney too, who to appoint as attorney, when it gets put in place, how to challenge doctors if you think they're making the wrong decision, and more. To finish off, you get my top eight tips on how to do a power of attorney document yourself.
3:10 Martin Lewis? And snuck in all of that, a money mastermind with Adrian, all about checking your credit file. Play the theme tune.
3:33 Speaker 04 Okay, base rate decision. In terms of money management, what should you be thinking of?
3:39 Martin Lewis? Well, what's happened is the Monetary Policy Committee of the Bank of England has voted by a majority, seven to two, to maintain the rate at four percent, so to keep it where it was. Two wanted to cut interest rates, which is an act to try and stimulate the economy a little bit more, but of course, there's a worry about inflation. And what's interesting when you read into this is the committee also voted by seven to do, seven to two, to do a bit more quantitative tightening, which is another way of controlling inflation by taking money out of the market. So, you know, when you look at this, while they do say at the bottom of their statement, a gradual and careful approach to further withdrawal of monetary policy restraint remains appropriate. I think this is a signal that the markets have been saying, we're not likely to see
4:24 Martin Lewis? a base rate cut this year now. In fact, there's only a one in three likelihood of a base rate cut this year. So we've started to see mortgage fixed rates tickle up slightly, I'm talking very small percentages here, not big percentages. You know, the idea that rates are going to continue to plummet seems to have gone, they might shave down a bit in the foreseeable future, the next six months, nine months, but not a lot. So those people who might have been holding off on fixing, thinking it was going to get cheaper quickly on their mortgages, you may want to fix now as things are shaving up slightly. For those looking with savings, you've got a relatively easy decision. Easy access rates are still paying more than fixed rates. But if you want surety over the next three, four, five years, again, fixed rates are pretty decent right now. They're in the mid 4%.
5:09 Martin Lewis? So it's not the biggest deal for the public because we sort of expected this to happen. But it is quite a good time with some stability to make some decisions.
5:17 Speaker 04 Okay, so on to wills and power of attorney. That's your big topic. And we've got two lawyers here to help answer your questions and plenty of questions we've got. Austin Lafferty, member of the Council of the Law Society of Scotland. How are you, Austin?
5:35 Speaker 00 I'm well, I'm well, thank you.
5:37 Speaker 04 Good. And with us, Melinda Giles from the Law Society's Wills and Equity Committee. Where do we start? What's the difference between the two for a start?
5:46 Martin Lewis? Okay, these are both crucially important thing. A will is a document, a legal document that you sign that tells what you want to happen when you die with your assets. Who are they going to go to so that you are making an active choice? Now, the most important people who need to do a will are those who are not married but have a common law partner, someone you live with. Now, when I say marriage and in the context of everything we're going to talk about, marriage also includes those who've done a legal civil partnership, which is basically just the same thing as marriage without the political baggage. And a will says where you want it to go. If you do not leave a will, then you die intestate.
6:26 Martin Lewis? And when you die intestate, it is the government's rules that dictate where your money goes. So the intestacy rules in England say the first £322,000 would go to your spouse. Note it is your spouse, your married or civil partner, not someone you live with. Even if you've been living with them for 25 years and have 17 children, they are not part of the intestacy rules. That is slightly different in Scotland, and we can ask our Scottish law about that in a little bit, in a little bit time. There is a little bit more weight to common law partners in Scotland, but in England, Wales and Northern Ireland, that does not matter. A power of attorney, which when I've done polls on this in the past, less than half the people who have wills have power of attorney, in my view...
7:09 Martin Lewis? Is arguably more important than a will. And if you're sitting there aged thirty five or forty and thinking this isn't me, stop it. What a power of attorney does, says, in the event that you were to lose mental capacity, so you could no longer manage your own finances, there's also a health and wellbeing one, somebody who can make decisions for you about your medical treatment if you weren't capable of doing that, although of course I find that focus on the financial one. In that event, you nominate somebody trusted to take over your finances. Now, the reason I would argue wills are very important, but power of attorney is more important, is once you're dead, you're dead. All we're discussing is where the money goes afterwards.
7:51 Martin Lewis? If you are alive and have lost capacity and you do not have a power of attorney, then nobody has the ability to look after your finances. Nobody may be able to pay your mortgage for you, or worse, be able to pay for any excess care that you needed because you have lost mental capacity. It leaves you in absolute limbo and having to go to somewhere called the Court of Protection, which is a nightmare. I cannot tell you how many horror stories I get about the Court of Protection for people who are having to apply to get the sort of equivalent power that they could have got by just signing or equivalent power that they could have got by their relatives or their friend who they're looking after, having signed a document when they have capacity. So power of attorney is absolutely crucial. We're going to start on wills, we'll come to power of attorney later.
8:36 Martin Lewis? What we need to talk about first is the reason why I'm doing this right now. And that is because this is the perfect time of year to sort out your will, because there are three charity schemes that enable you to get a solicitor drafted will or something like that, either for free or very cheaply. Now, when you're doing a will, the gold standard is for a solicitor to draft it. It normally costs hundreds of pounds, but right now. You can get it sorted. I'm going to run through those three schemes for you quickly. I won't dot all the i's and cross all the t's. You have WillAid, which is the biggest scheme, and bookings are now open. So what WillAid does is as long as you're aged 18 plus, it's UK wide. You can get a solicitor drafted will for a £120 suggested donation
9:21 Martin Lewis? to a list of charities that it has that is spread across eight different charities. Age UK, British Red Cross, Christian Aid, Crisis, the NSPCC, Shelter. It's on in November, but bookings are open now and it fills up quickly. Hence the point of doing this right now. You can also get a mirror will, which is where you basically get the same will, but in reverse for you and your spouse. And for a mirror will, the suggested donation is £200. If you can't afford that amount, under WillAid, you can give less, but please don't game it as it is for charity. The next one is that October is Free Wills Month, which is available to those who are aged 55 or over.
10:03 Martin Lewis? It's in selected UK locations. Again, it is a solicitor drafted will. And this is a winner if you're eligible because you don't have to pay anything. Now, the bookings aren't open yet, but they will be open on the first of October. And you need to get on and do that quickly. So this is a heads up to diarise it. Places tend to book up fast. Now, Free Wills Month operates twice a year. And some locations are on in the October one, some are on in the March one. The October month includes Birmingham, Liverpool, Manchester and much of Wales, Newcastle, Northern Ireland and Southampton. But go and check on its website to see if where you are is included. Now, why do they do this? Again, it's organised for Age UK, the NSPCC, Alzheimer's Research, Men Cap and more.
10:47 Martin Lewis? And the hope is that you will leave a bequest in your will, which is a donation to charity in your will when you die. The suggested amount is £300 or a small percentage of your estate, but it isn't compulsory. And all of these are for simple wills. So you see you've got Free Wills Month, which is free if you're aged 55 plus, and it's in the right area. WillAid, which is £120 suggested donation and is across the UK. There is a third one, slightly different, which is October Legacy Free Wills Month. That's on right now and into October. Again, aged 18 plus. England and Wales only. Now here.
11:26 Martin Lewis? The will is drafted up by Octopus Legacy's non-legal team but then solicitor checks. So it's not quite the gold standard of solicitor drafted, but it's not far away from it. And it is again totally free. So if you can't get the free will scheme, you might want to look at the Octopus Legacy scheme. They do the wills online of our phone or video or in branch. And again, it's done in the hopes you will leave a bequest to one of 150 charities that they support. So that's why we're doing all of this right now for simple wills. One final note, remember, it isn't just about doing the will if you don't have one, it's about having an up-to-date will. And especially if you got married or
12:06 Martin Lewis? divorced recently, check it's up-to-date. In England, Wales and Northern Ireland, wills are usually revoked when you get married. So you'll need a new one. And, you know, it's generally worth it in Scotland too, as I'm sure Austin will tell us. Austin, are you there?
12:21 Speaker 00 Yes, I am.
12:22 Martin Lewis? So yeah, it's not quite revoked in Scotland, but you should still probably do a new one when you get married, shouldn't you?
12:27 Speaker 00 You certainly should. You should update or make a new will at either the points where some big thing happens in your life. And there's nothing bigger than either getting married or indeed getting divorced. But it's something you should always kind of keep in the back of your mind. Do I need to revise my will because I have started a new business? Or I've adopted a child? Et cetera, et cetera. But certainly, a big thing like the start or finish of a marriage is a pinch point for doing or updating a will.
12:56 Martin Lewis? But technically, unlike England, Wales and Northern Ireland, your will isn't invalid in Scotland when you get married, is it?
13:01 Speaker 00 Correct.
13:02 Speaker 04 Okay. Well, that takes us on to Anna's question. Is, who says, is marriage enough? Or do I need a will to leave everything to my spouse? I mean, this is interesting. I'll be honest, should I reveal this? But I had a will. I don't know what I've done with it. I couldn't tell you where it is. But since I wrote it, I got married. And then I put my head in the sand, which is what I normally do.
13:23 Martin Lewis? Well, you don't have a will, Adrian, because you're in England. So, or, you know, it's invalid. And Linda, that's right, isn't it? His will is no longer valid.
13:30 Speaker 05 That's right, although a big lesson there, always do know where your will is because otherwise there's, you know, a huge amount of problems.
13:38 Speaker 04 Look, I can't find my car keys or my spectacles half the time, but yes, look, I'll take your point. My bad. So as it stands then.
13:45 Martin Lewis? Yeah, no, sorry, Adrian. Adrian, I know you're being flippant and you're being fun.
13:48 Speaker 04 No, I'm not. Well, I'm no, I'm not.
13:50 Martin Lewis? Let me say, one of the biggest problems people have is remember, it's not you who'll have a problem if you don't know where your will is. It's the people who you're trying to leave money to, who will already be struggling with grief and in going through a difficult time and having to do a hell of a lot of financial and legal admin. And you've, the fact you don't know where your will is and you haven't placed it securely and they don't know who the solicitor with. All of that is actually a really big problem, not a flippant problem. Forgive me for telling you off, mate.
14:13 Speaker 04 No, I, I, I accept it and I, a point taken, but actually it doesn't matter because mine's invalid anyway. So the default now having got married is that everything goes to my wife. Is that right?
14:25 Martin Lewis? No.
14:26 Speaker 05 Um, no, it doesn't. It does depend on your circumstances if you have children. But no, it doesn't all go to your wife. That's a common misunderstanding. Also, you know, that may be what you want, but you need to check whether that is in fact what you really want, dependent whether you may have children from previous relationship. There's all sorts of ways that you can ensure that all those you love are looked after if you make the will appropriately.
14:52 Speaker 04 So the do nothing option is what? What is, what, what, at this moment?
14:56 Martin Lewis? If you do not have a will and you are in England and Wales, right? And it does depend on which UK nation. The first £322,000 that you leave would go to your spouse. After that, and that's only married or civil partner, not someone you are living with. After that, it will be split between your spouse and your children. And if there isn't a spouse and isn't children, it gets very complicated. So the, but the other big point here, right, is not having a will doesn't, you know, if you're saying, well, I've only got 200 grands worth of assets and I want them all to go to my spouse anyway. So therefore marriage would work for me. The other problem with that philosophy is actually not having a will. It may complicate dealing with your estate. I got a tweet from Samara who said,
15:41 Martin Lewis? "My mum did a will but never went back to sign it as she deteriorated quickly. It left us in a real mess and having to navigate a really difficult situation. Hard to cope with while grieving. Please, for the sake of your loved ones, sort your will." I mean, Austin, not having a will, that makes things a lot trickier for the estate, doesn't it?
15:58 Speaker 00 Well, it does in a number of ways. And what Adrian said, oh, does it all go to my wife? In Scotland, people have that notion as well. Oh, I've got a wife or a husband, I've got children. Oh, they all just get it. No, in Scotland, there are very strict intestacy rules which divvy up the estate between a spouse who gets part of it, may get the house, may get an amount of money. But after that, it can go to other members of the blood family before coming back to before, or rather, instead of going to the spouse, if you don't make a will. And the children are, if there are children, they are entitled to a share of what we call the movable estate. And movable in Scotland means anything except land, buildings and your home.
16:43 Speaker 00 If there are no children, then other blood relatives may come in ahead of the spouse. So it is a mess in terms of the divvying of the estate. But also, there is much more in the way of legal procedure, cost, worry, distress. And somebody must apply to court to be appointed executor. Whereas in a will, the executor is there nominated and has a much easier time of it. So nothing is good about somebody dying and loved ones being left. But if you don't make a will, the logistics of it are much worse. And indeed, the surprise that's on the face of certain family members who thought they would be getting all or part of the estate and get nothing is very often there.
17:26 Martin Lewis? So if you go back to Anna's question, she said, is marriage enough? Or do I need a will to leave everything to my spouse? Marriage is not enough. The sensible and the considerate thing to do with your relatives is to make a will. And right now, as you can get a solicitor drafted one for free, get on with it.
17:43 Speaker 04 Okay, so just if I was to, what would I have to do to earn a big tick from you three now?
17:54 Speaker 04 You should write the will in such a way that, you know, if the worst thing was to happen, it would, everything would process efficiently. So I should have named the executor. And then there's the, is the trustees as well? I get confused about that.
18:09 Martin Lewis? Well, I think you're making it a bit too complicated, Adrian. The honest answer is for a man in your position, you should go to a solicitor and you should pay them to write a proper legally binding will for you.
18:16 Speaker 04 Okay, and then what happens? Okay, and then what happens when I die? That's the bit I'm not clear about. Do you, does whoever the executor is, do they then put their hands up? Are they alerted? You've got to go to them. How does it work?
18:33 Speaker 05 Adrian, I mean, we went back to the point about finding the will. So of course, there's making the will. And when you make it, and this does go to your question, even if you want it all to go to your spouse, you've also got to think of the sorry situation that you both get killed at the same time. Or that by the time your spouse dies before you, you might not have mental capacity to make a new will. So your will is quite, and if this happens and if that happens, document. You don't really want to rush back and change your will every year.
19:01 Speaker 04 Okay, but let's say it's relatively simple. And, you know, I die and it's left to my wife to look at. Okay, let's say she finds the will. And on the will, it will say who the executor is or what happens then?
19:14 Speaker 05 So the executor has the right to deal with all your assets. That could include a property, it could include your bank accounts, it could include your car, whatever it says in the will, but the executor has the right to deal with those assets.
19:26 Speaker 04 And who should that be?
19:28 Speaker 05 Who should the executor be? It can be your wife. It can be the same person as the beneficiary, which is sometimes something that people don't realise, but it can be the same person. If you feel that there's somebody who would be able to deal with the administration. Now, of course, they can get help in dealing with getting a grant of profit, they can go to a solicitor, but they can also do it themselves. Depends what assets there are, whether there's inheritance tax to pay, which actually there wouldn't be if it was all passive to the spouse in England. But yeah, the executor has the right to get the grant of probate which accesses your assets.
20:02 Martin Lewis? So Adrian, I think the answer to your question, who should the executor be, is a trusted, responsible person who's good at dealing with admin, right, and who's who's willing to accept the role and responsibility. You will be unsurprised to hear, I found myself and quite a few friends being not put down as they said, will you be my executor? Because funnily enough, I'm quite good at admin, even though I'm not a lawyer. So I think that's that's a simple answer. And you were talking about where you keep your will, where you can log it at a solicitor's firm, or you could, if you've got somewhere safely at home, put it. It's worth notifying your primary beneficiary and your executors where the will is kept, so that they can access it if you were to die. As an extra precaution,
20:45 Martin Lewis? there is a commercial firm, and it's important to know, it's a commercial firm, the National Will Register, which is used by 10 million people to log details about their wills are kept, so that to help their loved ones find them if they die. Registering costs about 30 quid. Occasionally, they do free offers, and it's worth keeping an eye out for that. But then it costs 65 pounds for someone to search the register. So you're far better off to do proper communication with the people who need to know where your will is. But if you didn't, that is a backup that you could do.
21:15 Speaker 00 Also, in Scotland, you can register your will at the Books of Council in Session, which is a very grand title. It's part of the registers of Scotland. Normally, wills are registered after people die naturally. But there is a facility to do it. And I came across a case recently where that had happened. And the the principal will can then, I'm not going to say be lost, hopefully one would never lose a will, but the registered version of it is a legal, original, as it were. So there are options. But fundamentally, Martin, if you hadn't given that explanation about registering with solicitor, I was going to jump in and say, making a will is one thing, but it is not, it is essentially a private
21:57 Speaker 00 document. And what most solicitors in Scotland certainly advise is that you leave the will, the principal will with the solicitors. Now, there's not a charge for that. I mean, we sit with something like 10,000 wills in our safe deposit. We give a copy to the client because we sometimes make a terrible joke of it by saying,
22:19 Martin Lewis? I know you are, and many of your terrible jokes are quite good, so let's hear it.
22:22 Speaker 00 You know my jokes well, Martin. If your house were to burn to the ground and you were to burn within it, we also would not want your will to burn. So we have that in a safe, separate place.
22:34 Martin Lewis? Yeah, not that funny, I'll be honest with you.
22:36 Speaker 00 No.
22:38 Speaker 00 I heard a national groan there, but never mind. This wasn't even a joke, there was nothing to groan at.
22:44 Martin Lewis? You've oversold us.
22:46 Speaker 00 We're lawyers, for goodness sake, we're not stand-up comedians. But the thing is, have at home, whether it's a briefcase, or a filing cabinet, or a plastic bag, with your essential documents or copies of them, or reference to them, so that if somebody comes along, particularly if somebody who's unmarried or doesn't have a family and is found, and I've been in this situation as a solicitor, somebody has found they've died in the house and nobody's noticed, et cetera, et cetera. Nobody knows who their lawyer is, nobody knows anything about them, and you've got to start rifling through the stuff that's there. There should be a copy of the will and a note of where the original is kept, who the solicitor is that dealt with it.
23:29 Martin Lewis? And nothing to do with the legals, but from my perspective, I always talk about a financial fact sheet as well, because of the three Ds. Death is only one of them, there's also divorce and dementia. And a financial fact sheet is a document that you have, which has every product provider you have, from your breakdown cover to where your life insurance is, from your main current account to who your gas and electricity provider is. It doesn't necessarily have security details, because you don't want someone capturing this document. But it's the piece of paper that if your spouse or someone else needs to take over your finances, you have that nice list that says, here it is, it's all down in what, this is who everything is with. And I would keep that probably next to the will as well,
24:10 Martin Lewis? and make sure that everybody knows where your crucial documents are, and that they have the ability to access them if something were to happen to you.
24:16 Speaker 00 Okay.
24:17 Speaker 04 Hold that thought, everybody. Let's go to Tokyo.
24:20 Speaker 05 Thank you very much, Adrian.
24:22 Martin Lewis? So we had to leave Five Live then because the exciting race in the World Athletics Championships was about to come on and then President Trump was to follow. So we're shifting to a pod-only style now. I'm delighted that Melinda Giles, a member of the Law Society's Wills and Equity Committee in England and Wales, is with us, and Austin Lafferty, a member of the Council of the Law Society in Scotland, is with us to take questions. And we've had a huge number of questions from people on wills and power of attorney. So I'm going to carry on with the wills questions now. The first one, Jane, and we'll go to you, Melinda, on this. What's the difference between mirror wills and mutual wills, please, she says?
25:00 Speaker 05 So a mirror will is something that a couple make, usually a married couple, where the wills reflect each other, basically, like in a mirror. The husband and wife, or the form of spouses, would leave the same, they would leave everything to each other, and on the death of the first one, they would then leave the estate, let's say, to their children. So they've both done the same thing, depend, never mind which one dies first. A mutual will, or a joint will, is really, most solicitors would not do one for you because they are quite unworkable documents. They're basically saying, I've made my will
25:43 Speaker 05 in this way, and you've made your will the same way, and I promise I will never change it, even if you die. Which, of course, is a really difficult situation, because what if your spouse dies, and you're 50 years old, and you move on with your life, and you want to change your will? So they're really not recommended. They're very rarely seen. Sorry?
26:06 Martin Lewis? Are they binding?
26:08 Speaker 05 They are binding, yes.
26:09 Martin Lewis? Wow.
26:10 Speaker 05 But they're often challenged.
26:12 Martin Lewis? Okay. Is it similar in Scotland?
26:13 Speaker 00 There's also a technical problem in Scotland if you do that. And I saw this once, where a couple had themselves drawn up a joint will and both signed it. And when one spouse died, one spouse died first, and that will was used as part of what we call confirmation, you call probate procedure, that was the will defunct. So it could no longer be used for the second death.
26:37 Martin Lewis? Wow, okay. So basically, what the difference is between mirror wills and mutual wills is mirror wills are the ones that people do, and mutual wills are the ones people shouldn't do.
26:46 Speaker 00 Yeah.
26:46 Martin Lewis? Fair summary. Right. So yeah, mirror wheel's pretty easy. Now, we have two questions that are very similar. One is for Scotland, one's for England. We'll start with Austin on this one. Anne asks, "In Scotland, I'm divorced, aged 62, with my own house. Is there any way of protecting my assets, transferring it to adult children, to avoid it being used for care homes in the future? The house is worth less than £200,000. I have a will and power of attorney." This is always the most common question when we do wills, what about care homes? So what's the Scottish situation first?
27:18 Speaker 00 Right. I'm tempted to go into kind of Martin Lewis mode and bombard you with 150 facts about this, but the short version of it is this, technically, you can do that. You can transfer property to adult children or to a trust, but, but there are all sorts of reasons why it's risky or might not be effective. One is, what if the children that you transfer it to go bankrupt or die, or get in some terrible legal conundrum whereby the property falls foul of that and is taken up by somebody else? You can no longer get it back because if you give it to somebody else, you've given it, you cannot reclaim
27:57 Speaker 00 it for any reason. Also, if a couple of years later, you go into a care home, the local authority may say, "Oh, wait a minute, you owned a property up to a couple of years ago, and you gave it away. We are going to treat you as if you have done this in order to avoid being assessed for care costs and write back in that as capital on your sort of account and therefore deny you benefits." And also, if you have a larger estate and you give the property away and continue to live in it, then there may be a tax issue when you die because you have reserved the benefit of occupation of the property. That is the very short version. We give clients a huge warning if they're thinking of doing
28:40 Speaker 00 it, and if they go ahead to do it, it might be successful if they live long enough and healthy enough, but we don't want to goad them into that risk because it is a risk.
28:51 Martin Lewis? I was going to ask that. Listening to what you said, what I, when we've spoken in the past is basically, it's very difficult if you're trying to protect your house from being used toward, to be treated towards a care home. I mean, it's just a tough thing to do. What interested me there is you said, if you live long enough. So Anne is 62. Let's imagine she gave away her house now to her children. She gave it away without reservations so that they could use it. She's not living in it anymore, or if she is, she's paying them a commercial rent to live in it, which you'd have to do, I presume. And she lives another 20 years, right? Or it's 20 years rather before she goes into the care home.
29:29 Speaker 00 Yes.
29:29 Martin Lewis? Would time make a difference? And how long does it need to be?
29:34 Speaker 00 Right, it does make a difference. Some people have in their mind the seven years and they're mixing up the inheritance tax period with this care cost thing. If, I mean, the broad answer is if as a matter of family and kind of general planning and organisation, you are saying, right, I've got this property, I want my children to benefit from the value of it, I'm going to transfer it to them, and I have no thought whatsoever of care costs. I am healthy, fit, I might even still be working. I'm not anywhere near going to care home, but I no longer wish to have this value, I wish to pass it on. And then, years later,
30:17 Speaker 00 and I'm not going to say how many years later, because there isn't a specific number, years later, your circumstances change, your health deteriorates, and when the council come to assess you, you say, well, at the time that I transferred this property, I was in good health, I was financially sound, I was not doing it for the purpose of avoiding care cost assessment. And if you can stand that up, as it were, then you will be successful with that. If you are concocting a false narrative...
30:50 Martin Lewis? Well, the fact she's asking the question almost defeats it, doesn't it, in a way?
30:54 Speaker 00 Yes and no. I think it's a perfectly legitimate way to phrase the question, but that is... That there's a kind of thread of risk going through the whole thing. But if a solicitor listening to that question says, right, I understand that question. And here's the answer to it. Let me ask you some other questions. What is your health? What is your general financial position? Are you working? What are your financial plans ahead in the next few years? When do you intend to retire? What family do you have? What is their financial position? You know, what aspirations have you had? And do you have now for passing on wealth?
31:34 Speaker 00 So it may be that there is a perfectly reasonable overall case to be made that says, do this now and your risks of falling foul of assessment at a much later point are much less. I will never say they're not they're nil and I will always.
31:49 Martin Lewis? I'm going to push on, forgive me, because I want to do the same in England. We had a question from Angela, which was questions around will versus trust. Why would someone put their house into a trust rather than leave it in a will? If they wanted to go to their children? I presume this is some kind of tactic to avoid care fees. It means the house could never be used as collateral, thus leaving the child inheritance protected, unlike a will. I mean, how is your answer? It's virtually the same as in Scotland as we've just heard, Melinda.
32:18 Speaker 05 Yeah, it is in short. More or less exactly how Austin explained it there. It does depend again on the value in terms of if people are thinking of inheritance tax. But very often they're thinking about care home fees, as you as you've mentioned. I would actually just flag something. I know you carefully mentioned England versus Scotland there. But whereas we normally and refer to the law in England and Wales, in fact, just to throw a further spanner in the work, when we're talking about health and social care, which is where paying for care homes fits in, the law in Wales is actually different than England.
32:56 Martin Lewis? Right.
32:56 Speaker 05 So Wales have delegated powers in terms of certain types of law and health and social care is one of them. So I can't say to you that the same would apply in Wales.
33:08 Martin Lewis? Okay, so so to be clear, the law, when we're talking about wills and power of attorney, that is England and Wales as one unit. But when we go to health and social care, so specifically care home fees and the attitudes of your local council to a care home, that will that is devolved separately between England and Wales.
33:25 Speaker 05 Exactly right, Martin, yes.
33:27 Martin Lewis? Okay, I'm going to move on to the next question, and sorry, it means people are going to have to do some more research, but at least you know you need to research it specifically.
33:35 Martin Lewis? The next question, Claire, Melinda, we'll do this to you. Can someone be appointed executor of a will without their permission or knowledge? What happens then if they don't wish to take on that responsibility?
33:47 Speaker 05 Yes, I mean, effectively, someone goes along and makes a will and they don't, the executor doesn't necessarily know that they have appointed them the executor. Obviously, it's not the most sensible thing to do, because if you want them to be the executor, then you're going to want them to do it. So it makes sense, really, to ask them that. But if it comes along and then you then die, and this person is suddenly greeted with the news that they're going to be the executor and they really don't want to do it, yeah, they can renounce and step down from being the executor. And what happens then is there's a series of rules as to who can be the executor instead in order to put effect to the wording of the will.
34:29 Speaker 05 So the primary people that can step in are those who are what's called the residuary beneficiaries. So let's say the will says, you know, I leave £10,000 to these five different people, and then I leave everything else to X. X is the first person that can make the application to be the executor. Then if they don't want to, it goes through a various other set of orders until you end up with an executor, hopefully.
34:56 Martin Lewis? And I presume the most common situation where this happens is where the executor has died, and so the executor isn't in place. That would be more likely than them not wanting to do it, wouldn't it?
35:04 Speaker 05 That means more likely, but then again, it makes sense to appoint an alternative executor in your will.
35:10 Martin Lewis? How many would you normally do?
35:13 Speaker 05 You could appoint two executors and, you know, therefore, the surviving one can act, or you can appoint, if this person dies, then I appoint this other person to be my executor. That's often what is done to ensure that you don't end up with a bit of a mess on your hands.
35:29 Martin Lewis? And Austin, I'm hoping the answer is a simple yes. Is it the same in Scotland?
35:34 Speaker 00 More or less, yes.
35:35 Martin Lewis? We'll take it. We'll take it. Caroline is in Wales, says, can I use a DIY will kit? No kids, leaving it to my brother. Under the inheritance tax limits, I plan on spending most of my money. So the first thing I'd say Caroline is better than the DIY kit. If you rewind back the podcast to the three will schemes I mentioned, well, you're doing it DIY to keep the cost down. That's one way. There are also halfway houses like which wills, which are similar to the octopus legacy scheme, where they will have someone drafted and solicitor checked. I mean, I heard a deep sigh. You don't like, clearly we've got solicitors there. You don't like DIY will kits. But this is really simple. Surely this one isn't too bad?
36:19 Speaker 00 There's no such thing as a simple will. I'll be honest, in Scotland at least. Because it's that thing about being a little bit pregnant. Once you go down the road of creating a will, have you, use the right words? Have you signed it in the right place? I mean, in Scotland, the question of where you sign a will and how many pages it's got and so forth can nullify a will. Have you in the will appointed an executor? Or have you just done a one line, say, I leave everything to Jimmy? Which may be a valid will, but if you haven't appointed executor, then going back to the last question, somebody's then got to apply to the court to be appointed executor for this allegedly simple will.
37:03 Speaker 00 You're already adding at least hundreds of pounds to the costs. The idea that there is a simple will is an absolute mistake. I'm all for people doing the free will service. For goodness sake, that's great. But don't think of a will as a simple document. It's not.
37:24 Martin Lewis? So if you use, so if someone were to do a DIY will on a DIY kit, and all they want to do is, I leave everything to my brother and my brother is my executor? How difficult is that?
37:35 Speaker 00 That is valid, but I'll tell you what one big problem is in either online or the old, you know, published DIY wills you get the stationers. People in Scotland forget and don't realise that they are domiciled in Scotland and they use an English document, which can lead to all sorts of other problems. It's just not worth it.
37:59 Speaker 05 I'll tell you a story about a DIY will that I dealt with. So I mean, I think I slightly defer to you, Austin, in the sense that I do think if a will can be a simple will, it could appoint one person executor and the sole beneficiary. However, the crucial thing about the will is the way in which it is written out to make sure the words are exactly as they should be. And that might sound simple, but actually it's not always. And then the way in which it's signed in the presence of witness who must be in the presence of each other and who muster it in a certain way, again, sounds simple, but the number of times we've seen that not been done correctly, which just means the will is invalid or could be valid, could not be valid.
38:42 Speaker 05 And I once dealt with a homemade will where the person had written it all out beautifully, had it signed and witnessed, but forgot to put the name of the beneficiary in it. They said, I leave all my estate to, and there was a gap. And they'd appointed an executor, they'd signed and witnessed it, and then just had missed off the name, like we all make careless mistakes sometimes. So I think if I'm honest with you, for the cost of a will, it is really worth getting the advice and getting it done properly.
39:15 Martin Lewis? We'll move on to Carol now. If a widow remarries, can she specify in her will that her estate must go to her children and not to her new spouse? Well, that's surely the point of a will, I would have thought, isn't it, Melinda?
39:26 Speaker 05 Yes, exactly right. You can put in your will what you want and you can put that. That's not to say that the new husband wouldn't be able to say, well, where am I going to live then? But that's a whole different story. You can make your will as you want.
39:39 Martin Lewis? Let me step this up a second. Could Carol leave everything to her new husband in her lifetime, but then specify in her will that the money that was passed on must then go to her children?
39:54 Speaker 05 Yes, and it's very common in second or third or subsequent marriages to do that.
40:00 Martin Lewis? And that's legally binding. So I'm going to leave you half a million pounds and the house and everything, but when you die, you must leave this to my children. And that's, and that's not challengeable. And the, the new spouse couldn't then do a different thing in their will?
40:15 Speaker 05 Well, when you say it's not challengeable.
40:17 Martin Lewis? Okay, everything's challengeable.
40:18 Speaker 05 Everything's challengeable.
40:19 Martin Lewis? It's difficult to challenge. It's a standard thing to do.
40:23 Speaker 05 It, it, it makes sense. And, and quite often, both spouses want to do the same thing anyway.
40:28 Martin Lewis? Yeah, no, but that's where I'm pressing. If you're not sure about, you know, you've got a dodgy new spouse, you've got them because they're really hot and you like them, but you're not quite sure they're morally with you. And so you think, all right, you know, we've had a great time together. I want to leave my money to them in my lifetime, but I don't want them to screw over my children for their children from their previous marriage. That's what, that's what I'm thinking here. How, how watertight is the ability to be able to do that?
40:51 Speaker 05 Yeah, very much so. It's exactly the normal will that you do. It's, it sort of makes, the best, the best thing to do is to let them know that as well. Perhaps they might not hang around, but then you'd learn quick enough that about that. But it's, it's quite good to have openness as to what to happen if one of you died when you're in that situation.
41:10 Martin Lewis? Austin, I'm hoping that's the same in Scotland and it doesn't deviate too much.
41:15 Speaker 00 Broadly, yes, but here's a hint. Make somebody else the executor and not the new husband.
41:20 Martin Lewis? Okay, that does make sense. Yes, perfect. I presume that would work in England too. I have one last question, which sort of makes me smile, that came in by text during the show on this before we finish on wills. It's from Richard. He says, I made a will with my spouse 20 plus years ago in Scotland. We now live in England and our son is still in Scotland. Should we urgently update or get a new will or will it still be valid? So this is one I think you both need to answer together. Made the will in Scotland, now lives in England. Whose law trumps whom?
41:55 Speaker 05 There's not such things as a trump. It really depends where they're domiciled and where the assets are.
41:59 Martin Lewis? I'm not sure you can say in this moment, there's no such thing as a trump, but carry on. Fake news, that's fake news, Melinda, that's fake news. Anyway, yes.
42:09 Speaker 00 Well, as President Trump, of course, is not quite a domiciled Scot, he's one generation away from being a domiciled Scots person to his mother. Actually, I've had plenty of cases where people have moved north and south the border, and sometimes an English will is perfectly acceptable in a Scottish court. Sometimes you need an opinion from an English solicitor that the will conforms to the laws of England, and thereby it is acceptable in the courts of Scotland.
42:43 Martin Lewis? I'm guessing the sensible thing, though, is if it's a 20-year-old will, it's probably, and you've moved between different UK nations, it's probably simpler to go and get a new English will at this point, isn't it?
42:57 Speaker 05 Yes. Yeah. And the same applies to powers of attorney, I'm sorry to say. If you've made one in Scotland, you very probably will need to make one in England.
43:05 Martin Lewis? And actually, wider, I presume, as well. If you were to move outside the UK, you can't assume that your UK power of attorney would still continue to apply and be relevant, could you?
43:14 Speaker 05 It very likely won't be relevant.
43:16 Martin Lewis? Okay, well, that is a good way, I think, to move on now.
43:21 Martin Lewis? Now, at this point, I need to sneak back into the studio with Adrian to do a quick mastermind on the radio. I say sneak back into the studio, I'm staying in the same place. We're operating from two virtual studios, one with producer Matt in doing the podcast, and one with the Five Live team in with Adrian and his crew. So my sneaking back in means somebody's just pressing a button. You've probably heard too much of this already. We'll be coming back to more on power of attorney in a moment. For now, play the mastermind theme tune.
43:51 Martin Lewis? Adrian, this is Money Mastermind, and your score is balanced on a razor's edge. You have 11 right and 22 wrong in our three-option multiple choice, which means you are exactly the same as a monkey picking hairs out of its nose to decide which option it would choose. You are Mr. Random Chance. Let's see if we can improve that today. Are you ready? I'm ready. Ladies and gentlemen, Adrian has joined a gym. It's a brave move. The first thing the instructor asked was, "What's your fitness goal?" Adrian's response, "To get out of here without anyone seeing me in Lycra." He's paying £25 a month, that's the joining fee, there's a FOB fee, and he's a little worried now that he's also signed up to lease a treadmill. In a state of
44:36 Martin Lewis? panic, he's convinced this is a dodgy finance deal, he's got to do 10 burpees a week and a balloon payment in 2035. So when he gets home, he started to check his credit file more than he checks the West Brom score. The question today, Adrian, does the fact you check your credit file go on your credit file? A, yes, and it can impact your ability to get credit in future. B, yes, but it doesn't impact your ability to get credit in future. Or C, no, it doesn't go on your credit file.
45:14 Speaker 04 Um.
45:15 Martin Lewis? So you understand, does your checking and going to look at your credit file?
45:18 Speaker 04 Yeah.
45:19 Martin Lewis? Impact?
45:20 Speaker 04 And just remind us how you do check, do you?
45:23 Martin Lewis? Go online to Experian, Equifax, or TransUnion, or you can go to other sites that offer their credit files for free and you look at your details. It gives you all the details of which companies you have deals with, or have you been making repayments on time, and all the other stuff that the credit reference agencies have information about you. And that's what you've gone online to check. So in your case of your dodgy gym deal, you're seeing, did you really sign up for a finance deal just to lease a treadmill? That's what you've gone on to check to see if it started appearing.
45:51 Speaker 04 I'm going to give you a no. See, I, I, surely, is nothing sacrosanct, just a few moments with your credit rating, seeing what it is. Can you not be left alone just to enjoy it in peace and privacy?
46:04 Martin Lewis? So your answer, final answer, is the fact that you have checked your credit file does not go on your credit file. Lady uh-uh. Yeah, I'm afraid that's wrong. The fact you check your credit file does go on your credit file. So what we are left is, does it affect your ability to get credit, or it doesn't affect your ability to get credit? The good news is, the correct answer is checking your file does go on your, checking your credit file does go on the file, it is recorded, but it doesn't impact your ability to get credit. And there's a crucial distinction in what goes on your file between what is called a soft search and a hard search. Soft search are things that go on your file, but lenders cannot include when they're assessing your future ability to get credit.
46:46 Martin Lewis? Checking your credit file is one, using an eligibility calculator is one, using some indicative offers on loans is another, and a hard search, which is a proper application, and that, especially lots of them in a short space of time, can diminish your ability to get credit in future. And when you look on your credit file, they will be split up between soft searches and hard searches.
47:10 Martin Lewis? Now, let's move on to a lasting power of attorney. I've already explained that in my view, it's probably even more important than getting a will. This is where, if you were to lose your faculties, many people assume that their relatives could walk into the bank and access your money for you. They can't, not even to pay for your care or the mortgage. And that's what a lasting power of attorney, from this point on, we're just going to call it power of attorney, although there are also short-term power of attorneys, that's what a lasting power of attorney is there to fix. And this isn't trivial. I mean, if you lose your faculties, there are big questions left. Who will look after you? Who can access your funds to pay for necessities? Who will ensure your money is still working for you if you're no longer capable of doing it?
47:55 Martin Lewis? If you don't have a power of attorney, they will need to apply to take care of your finances via the Court of Protection, or the Sheriff Court in Scotland, or the Office of Care and Protection in Northern Ireland, but they're all roughly similar in the, in the big picture context. That is often difficult, costly, and takes a long time, leaving the situation in limbo in the meantime. Now, you may be sitting there thinking, losing your faculties isn't, is something that just happens to the elderly. It isn't. Accidents, stroke, early onset dementia may hit anyone and more. And younger people, the way that finances have changed, tend to have finances that are more separate, so it can be even tougher to sort things out because there's no joint accounts to get you over the gap.
48:39 Martin Lewis? I am only fifty-three. I know, I know, I know, I sound thirty-two, but I am only fifty-three. I have no reason to foresee losing my mental capacity, but I have had a power of attorney set up since my thirties, and I would strongly suggest that you do so too. Just to go on quickly before we come to our two brilliant lawyers. A power of attorney means you nominate a trusted friend or relative who can look after your affairs if needed. It does not mean you are giving up control now. You can opt for it to only be in effect if you're no longer capable. And included within that as a safety net, you can nominate other separate people to be notified if the power of attorney
49:23 Martin Lewis? is enacted. So they could object to it and say, no, hold on, they're still perfectly compos mentis, this shouldn't be going on. There's a fixed cost to register a power of attorney. It does vary across the UK nations. In England and Wales, it's currently eighty-two pounds per power of attorney, and there are two, one for finance and property, one for health and welfare. So both is a hundred and sixty-four pounds. Worth noting, that's increasing by ten pounds to ninety-two pounds for applications from the seventeenth of November. So if you get it in quicker, it's cheaper. If you're unsure how to do this, pay for help, especially if you've got complex financial affairs or are uncertain. Again, gold standard is a solicitor to get a power of attorney. That could cost you four hundred
50:05 Martin Lewis? to seven hundred and fifty quid. Alternatively, there's a halfway house at which, where which wills will get you to fill in a questionnaire, it populates, then it's checked by a specialist paralegal within two weeks, normally costs around a hundred quid. And I will give you some DIY power of attorney tips later, but it is only for people who are seriously, you know, on the ball, can dot the i's, cross the t's and follow instructions very carefully, and are good at admin tasks. Otherwise, it can get quite tough. With that, over to our, I was gonna, I don't know why I was gonna call you tame lawyers. I don't think you're either particularly, I'm gonna call you tame lawyers, and yeah, there we are. Melinda and Austin are back with us. Let's get on to some of these power of attorney
50:44 Martin Lewis? questions. Steve, my wife and I are fifty-seven and fifty-three. The kids are twenty and twenty-two. Should we be thinking about giving them power of attorney now so it's in place, or wait until we are a little older and retired? I mean, Melinda, you set up a power of attorney, but you wouldn't have your your kids taking over as as your attorneys now.
51:05 Speaker 05 No, no, most of us wouldn't want our power of attorney to be used by our attorneys as soon as we've made it. It's a sort of just in case it needs to be used document really in the ideal world. And especially at that age, you would do it, you would keep it safe, you would let your kids know it's ready if anything happens.
51:24 Martin Lewis? And Austin, I presume exactly the same, just do it as early as you possibly can. Once you've got, you know, and then then it's in place and there's nothing to worry about.
51:32 Speaker 00 Absolutely correct. One thing, the public guardian guardian in Scotland are, I mean, the fantastic organisation, but they're always seem to be under pressure and it takes months to register. It can take up to a year to register a power of attorney in Scotland, although if there's an emergency, they'll take it out of the the pile and do it for you there and then. So it's something that should be done. I think of it as like an insurance policy. You might never need it. You might live healthily until you suddenly pop off at the end, but if you don't have it and you need it, then it's too late to get it. So yes, plan it in advance, do it when you're fit and well.
52:09 Martin Lewis? And then that's where we move on to Dean's question next. Dean says, can you give two examples of how much it costs with a power of attorney and costs without? So in layman's terms, et cetera. Do you know what, Dean? The best thing I can do is read to you what Stephanie wrote to me on Facebook and I can just say this is one of countless similar examples I get about the problems of not having a lasting power of attorney in effect. Stephanie says, I can't stress enough how important a POA is. My mother had made a will but not a power of attorney. Sadly, she suffered a stroke which led to vascular dementia. She could not make decisions regarding her finances. I had to apply for a deputyship's order via the court, which took eight months to
52:54 Martin Lewis? come through and cost £4,000. Plus, I had to make annual reports to the Office of the Public Guardian, which costs £300 a year, as to how my mum's funds were being used. All in all, a very costly exercise. And many people get in touch with me, not just talking about the cost, the time, the delay, the frustration of not being able to do anything, the huge amount of admin and stress that it loads on top when you're already trying to look after a struggling person who's got dementia or who has lost their capacity. So, I mean, the physical, you can't do a direct a power of attorney costs this and court of protection costs more, or the equivalent court of protection to court of protection
53:35 Martin Lewis? costs more. But very simply, not getting a lasting power of attorney if you then need to take over somebody's finances is far more expensive, far more stressful, and takes far longer. I presume I've got no disagreement from the lawyers on that.
53:50 Speaker 05 Well, I would add actually something more, and that is, let's say you've got two children, one applies to be the deputy in the court of protection and the other objects to that person applying. You've then got a contested one, which takes even longer, costs even more money. So making the lasting power of attorney means that you choose the person you want to manage your finances to.
54:10 Martin Lewis? That takes me on to Carol. What do you do if you live on your own and don't have anyone who could act as power of attorney?
54:16 Speaker 05 Sometimes people decide, well, I've got a couple of trusted friends who are in the same position as me, maybe we can do a deal with each other and we'll both act as attorneys for each other. On the other hand, maybe we're both the same age and therefore what if we both get old and sadly lose our faculties at the same time? So.
54:35 Martin Lewis? I mean, it's tough. You've got to choose someone trusted, haven't you? I mean, abuse is possible. I should say, I'm very strong that people get a power of attorney. I don't want anyone to think that I'm blinkered and think that the situation, it is a perfect solution. There are problems with power of attorney, they can be abused.
54:51 Speaker 05 But a lot of people then do turn to a solicitor. It does cost money because you've paid for the power of attorney and then you do pay for the professional work they're doing in terms of managing your finances. However, they're regulated, they're insured.
55:06 Speaker 05 And so, you know, they know what they're doing as well. And at the end of the day, as you say, trust is so important when you don't know what's going on yourself.
55:15 Martin Lewis? So Austin, I mean, you may well know this. Any other options? Are there any charities out there who might be able to help if you haven't got anyone to be your power of attorney?
55:23 Speaker 00 One difficulty in Scotland is you can appoint for your financial and property side, which by the way, we call a continuing rather than lasting power of attorney. I don't know why it's our word. You can appoint a kind of institutional attorney and it could be a firm's solicitor's trustee company. If charities offer this, then that's fine. For the welfare powers, it has to be a kind of human person. And I think that's because there are decisions about care, about turning off machines, about placement in nursing homes and so forth. So it has to be a real person, as it were. And there you really just do have to find somebody who is trusted. Now, it could be a solicitor or other professional acting in a kind of personal capacity. And yes, you can talk about costs, et cetera.
56:08 Speaker 00 I mean, I am an attorney and a guardian for various people, just because they don't, they kind of don't have anybody else. So that's something that I've kind of ended up having to do. But it's, I would be very sad if somebody really didn't have anybody at all that they could nominate as a trusted representative as attorney. But that is the answer. But the welfare powers has to be a human person.
56:35 Martin Lewis? I mean, it could even be your local clergy, if you happen to know them, or somebody like that. Anybody you could ask. So I'll move on to a question from Di, who asks, when should you activate the power of attorney? I presume by this she means when should you, you know, sort of say, I'm no longer capable. What's the tipping point there?
56:52 Speaker 00 Well, I think it's like fingerprints, everyone's different. I think that it becomes obvious to those around. And let's assume that there is family and there are friends or, you know, associates that are seeing somebody. I just think there's a growing realisation.
57:07 Speaker 00 God forbid that there's a crisis, you know, you fall or you you wander out into the street or you give somebody a lot of money, but it's there are warning signs. And I think that the principle underlying it all is you've got to be honest with your family and friends. You've got to you've got to have a shared information kind of regime or or philosophy with them, not boring everybody rigid about every single thing that happens to you, but people, your family have got to know what's going on and you have got to be, if people sit down with you and look you in the eye and say, you know, you missed your meals, or you've done this, or you're wearing odd socks and so forth, you know, if if there's a picture building up, people have got to be honest and open to that. I think that's the best I can do.
57:53 Martin Lewis? I'm going to move on to Michael's questions. Thank you for that, Austin. Melinda, I'll put this to you. They're asking what mix of skills and experience should a power of attorney holder have? And how do you replace a power of attorney holder or the attorney effectively we're talking about?
58:08 Speaker 05 How do you replace them? What if if they die?
58:10 Martin Lewis? Or you want to change somebody, I presume.
58:12 Speaker 05 Okay, so if you want to change your attorney, unfortunately, you have to completely cancel the power of attorney document that you've got and start gain. You can, though, in the other scenario, if one dies, for example, then you can have a joint and several appointment, and that means that the surviving attorney can continue to act. What skills do they require? Well, obviously, they've got to be honest and trustworthy in the first place. The next bit is depends upon what your finances are like. If your finances are pretty simple, pretty low key, then just the skills of someone who knows how to manage a bank account and has the right ethos in terms of making sure you have everything you need. If you've got
58:56 Speaker 05 complex affairs, if you're the director of a company, all those sorts of things, then you really need to go to another level in terms of the expertise that your attorney needs. And very often, that would include, or maybe lean you towards having a professional power of attorney.
59:14 Martin Lewis? They could power, you could have a professional and a non-professional, couldn't you, to do it together? So that you have you have someone who's sort of your trusted person, and then they've got somebody else who's working with them?
59:25 Speaker 05 Yeah, and of course you have to decide whether that is jointly, as in they both have to do everything, or jointly in several. Of course, you can put also guidance, et cetera, in your power of attorney. So you could say, I've appointed them joint in several, I want this one to deal with these type of affairs, this one to deal with that type of affairs, and I actually want them to share uh details of what they're doing all the time. You know, you can go quite detailed as to how you want them to manage things for you.
59:50 Martin Lewis? Uh and it's important, isn't it as well, you can only tell your representative to act in your best interest. You can't instruct somebody to act in the best interests of, say, your children or your partner. Your attorney can only act for you.
1:00:06 Speaker 05 That's actually just the law. It's not even about what you're telling them. The Mental Capacity Act is the one that provides for the making of lasting powers of attorney, and that is the absolute duty of an attorney, that they have to only act on behalf of that person. So even if you're attorney for your mum and you think your mum would want to do some inheritance tax planning and give you a nice wodge of money, if your mum has lost mental capacity, you can't just think she would have done it. You have to go and get permission to actually benefit yourself to that degree.
1:00:39 Martin Lewis? So there's a question from Rock and Roller nine one two who says, and this is for you, Austin, can a person who is a beneficiary of a will have power of attorney in Scotland? For example, as signing a do not resuscitate in hospital for a relative. So therefore, I presume the assumption is that they may well benefit from the will if they were to sign a do not resuscitate because the person would pass away more quickly and they would gain the finances. So is there an implicit conflict of interest there or is it allowed?
1:01:09 Speaker 00 It it is, it is allowed, uh but that that sounds like more like a dinner party, a conversation question than a an actual legal conundrum. Um it it comes down, I think, to reality and
1:01:24 Speaker 00 Separating out the best interests of the adult person under the the power of attorney to everything else, that that comes first. And if the situation is that in order to minimize, you know, end the suffering of an extreme situation where uh somebody's in a hospital bed and they're on machines and they're being kept alive by this, then uh i- i- if somebody has been appointed an attorney, then uh th- that is the principal issue that everybody would focus on. The fact that that attorney, who may very well be a beneficiary of the will, and there's nothing uncommon about that, because you might be appointing a spouse or or grown-up children as attorneys, and they are the principal beneficiaries of your will.
1:02:08 Speaker 00 So uh the the the conjunction of those two ideas is not novel at all. Um, the idea that uh somebody could swoop in and demand that uh uh an adult um be treated in such a way that would end their life in order for me to get their bongar is kind of fanciful, because there are so many stops in in in that in that path. The doctors uh would have to uh give advice that um uh there was nothing else to be done than uh ending care. Uh, the there would be other family around, there would be nursing staff. You know, if it really, really came to it, another member of the family could seek an
1:02:51 Speaker 00 interdict, which is the Scottish version of an injunction in court urgently to, you know, stop this person acting as an attorney, or the public guardian might be a a consulted. But that is a really extreme and unusual situation that is being presented.
1:03:04 Martin Lewis? Let me turn it on its head with this question from Eileen, though, about power of attorney, and she doesn't say whether it's England or Scotland. We'll we'll go with Scotland for now, because I presume on this issue it's pretty similar. She says, we had a health one in place for my mum. So that is where you the the you are putting a power of attorney in place that says someone else will be able to make medical decisions for you in the event that you don't have capacity to make them for yourself. My brother told the doctors at the hospital it was not in her best interest to actively treat her. The doctor asked, did he understand what it meant? Yes, he did. But the doctors ignored this, treated her, and made her linger for another week. What should we have done?
1:03:44 Martin Lewis? So I presume it would have been going to court for an injunction against treatment, would it?
1:03:49 Speaker 00 Yeah, in Scotland an interdict, but similar thing. Yes, it would have been, it would have been taking the matter to a judicial referee, for want of a better word. Probably before that, the attorney would have sought a second opinion from other medical people within the hospital or elsewhere and brought that to bear as pressure and would have accelerated, or not accelerated, but would have escalated the matter up to higher authority within the medical world. And only when that didn't work or didn't create the result that the attorney genuinely thought was the right thing for the adult, then urgently you could go to the Sheriff
1:04:30 Speaker 00 Court and seek an interdict and the matter would be brought into an independent judicial environment.
1:04:37 Martin Lewis? Melinda, I presume while the process might be slightly different in England, the principles are roughly the same.
1:04:43 Speaker 05 Yes, although what I would add is that if somebody hasn't already made a lasting power of attorney for health and welfare, they might not realise this, that there are two parts to it. One is to provide a general right to make decisions as to health and welfare. The other is to either agree or not agree that the attorney has the right to make a decision about life sustaining treatment. So you can be a power of attorney for health, but not have the right to make a decision about life sustaining. So that's the only thing that I would add in there.
1:05:16 Martin Lewis? I know, that's very interesting.
1:05:18 Speaker 05 Yeah, and that's obviously extremely important. And then, yes, in our, in England and Wales, we apply to the Court of Protection for a court decision as to whether the treatment can be stopped.
1:05:30 Martin Lewis? Now, I've got two, two last ones, both just about, once power of attorney is in place, operating finances. There's an England one first. SARAH. It would be valuable and helpful to receive instructions as to how to register with banks when it's received. I had no idea anything had to be done, only discovered in a passing comment. Now, in England, you can actually get a code with your power of attorney. Why don't you talk us through that, Melinda?
1:05:54 Speaker 05 Yeah, so there's a code issued that you send to the various banks. Now, what I would say is there is no standard across the banks, so they don't have one set of guidance as to how they process powers of attorney. Each bank has their own set of rules, their own risk assessment, etc. So some require you to go in person, show your ID, others will do it online. It's obviously much easier if you're very, if you're at the same bank as your mum, for example, and you're verified with your ID there, then that will usually be easier. What is, hopefully, I think, some good advice is if you have a power of attorney for somebody elderly who can manage their affairs, but they want you to support and help them,
1:06:39 Speaker 05 then you could register the power of attorney with their bank so that your signature is acceptable, so that you can help them out, but make it absolutely clear to the bank that your parent still has mental capacity. In other words, not to prevent them themselves also dealing with the bank. The beauty of doing that is that if your parent then deteriorates and is no longer able, and it becomes urgent that you do have that ability, you're already on record, you can already do it.
1:07:10 Martin Lewis? And when I said it was, well, I just say, I should have just explained the online code. What the online code is, is you have to prove you have the lasting power of attorney. And in England, you can get a 13-digit code that is effectively an online digital representation of the lasting power of attorney that is legally valid, England and Wales, I should say.
1:07:27 Speaker 05 Yeah, yeah. Not all banks or financial institutions accept that, unfortunately, because you could be having to deal with an insurance company, for example.
1:07:36 Martin Lewis? No. And interestingly, with my, a separate hat on as Chair of the Money and Mental Health Policy Institute, we are undergoing research on third-party access for mental health and capacity across not just as power of attorney, but also carers' cards and other things. I think there needs to be a standardised system that makes it easier for everybody to operate, because at the moment, there is a stickiness. If you are, if you're acting as somebody's representative, there's often a stickiness that means you can't switch to a better Because it's just so much hassle to do and we need to get rid of those barriers. They're not there. I'm going to move to our final question, which is for you, Austin. And normally Scotland does quite well in these things with rather good rules. Margaret's not very happy though. She says, in Scotland, why do I always have to get a newly certified
1:08:20 Martin Lewis? copy of the power of attorney as banks won't accept one certified more than six months ago? Why isn't there a code system as there is in England?
1:08:30 Speaker 00 Great question. Don't know the answer. Wish there was a code. I have had to personally traipse into banks and building societies where I've been appointed attorney, even though they know perfectly well who I am and I've had to go through the lengthy procedures. I don't object to it because whatever's needed I'll do. But we are behind the times in Scotland when it comes to administration of powers of attorney. And I agree with Margaret's frustration.
1:08:58 Martin Lewis? I tell you what, at the end of this podcast, Austin, why don't we, why don't we write a joint letter to the minister responsible in Scotland to say, come on, pull your finger out and get something going similar to the one in England?
1:09:10 Speaker 00 Well, I am not a political person, but I think that is a good idea from an administration point of view, but we should maybe start by writing to the Public Guardian in Scotland to say, we love what you do, but we need these changes made to bring things into a more streamlined procedure for the adults that we support.
1:09:37 Martin Lewis? Of course, it's not a political suggestion, certainly not a party political one. It's just a general one saying, hey, you know, come on, let's make it a little bit easier for the people of Scotland who are already in under difficult circumstances to be able to put their power of attorney in place. And maybe I'll get in touch with you privately and we'll see if we can come up with something. I will get it, I'll get it drafted and you'll, if you fancy checking the legals for me on it. We got it the right way around.
1:09:58 Speaker 00 As long as I don't need to check the spelling, we'll be fine.
1:10:00 Martin Lewis? No, I know. I have other people who do that. My spelling's awful. That's why I'm a broadcaster. Right. So just a huge thank you so much to Austin Lafferty, who's a member of the Council of Law Society in Scotland, and Melinda Giles, who's a member of the Law Society's Wills and Equity Commission and is works in England and Wales. My apologies to those in Northern Ireland that we don't have a Northern Irish lawyer. Many of the principles balls we've talked about for England and Wales tend to be similar or not exactly the same in Northern Ireland. So you will need to get some specific guidance, but hopefully it's given you a way through. You two were both brilliant. Thank you so much for coming on board.
1:10:39 Martin Lewis? Now, our solicitors have gone, but I have one more quote to read out. I'm not doing it behind their backs. Don't worry. It's from Louise who says, "I want people to know that in some situations, power of attorney can be done for free. You don't have to pay hundreds with a solicitor or a barrister. It's just eighty two pounds per pop, that's writing in November, on the government website, and it's so easy to do. I've just done it for both my parents. It's also worth me noting, by the way, that if you're on a very low income or on benefits, you may be able to get the power of attorney for free, and it's worth looking at their guidance on that. Now, look, I think Louise has made it a little bit easier than it is. I have many people who have real struggles in doing the power of attorney for themselves. I would always say if you've got a complicated situation or you're confused, then do go and pay for some help
1:11:24 Martin Lewis? to get this right because it is such an important document. And it's worth noting that in the financial year 2023 to 2024, fifty one thousand power of attorney applications were rejected due to mistakes. Now, this is specifically for England and Wales, as you can't do it online in Scotland and it's more difficult in Northern Ireland. But I do have eight key checks for you if you're going to try and do the power of attorney yourself. And you will start to see from these, this is only for people who are really good at dotting I's, crossing T's, good at admin, and understand how everything works. So. Let's do the eight checks. First of all, use the right form. There are two types of lasting power of attorney. One for property and finance, another for health and welfare.
1:12:08 Martin Lewis? You must apply for each separately, yet they're similar. So people often use the wrong form. Number two, be specific about what is an instruction and what is a preference. This is in section seven when you're filling it in. For example, a preference would be, I'd like my attorneys to consult my doctor if they think I don't have the capacity to make decisions about my house. An instruction is, my attorneys must not sell my home unless, in my doctor's opinion, I can no longer live independently. Be very specific about the difference between them. Number three, as I've already mentioned, instructions and preferences can only be in your best interests. Not in the best interests of anyone else, even your child or partner.
1:12:52 Martin Lewis? They must act for you alone. Number four, you can only ask them to do legal things. So for example, you can't give instructions or preferences currently about euthanasia or assisted suicide, nor can they alter your will. Number five, include all the necessary and sometimes unnecessary information. So I mean, include writing middle names where a full name is required. Check every number and postcode and spelling and send every page of the application back. Even if they're blank, send every page back. Number six, cross out, don't delete mistakes. Tippex correction fluid is not your friend. You need to fill in the form in black pen, pencil isn't allowed.
1:13:34 Martin Lewis? If you make a mistake, you must cross it out and write a correction, then initial that. In other words, you know, I would put M L, my initials, next to it as close to the box as possible. If you get that wrong, it could be invalid. Number seven, use an impartial certificate provider to verify your application. There are strict rules around this. It can't be one of your representatives or someone related to one of your representatives, even by marriage. So make sure you look up who can be, who can be your certificate provider's impartial signature first. Don't just do it willy nilly. And finally, number eight, get the form signed in the right order. Sounds straightforward? But the form needs to be signed five times before it can be sent off and that
1:14:17 Martin Lewis? has to be done in the right order. There is more details on all of that online if you want to check it out. You understand why I say this is a panicky thing that you need to do to do it right. And it's one of the reasons why 51,000 were rejected and why getting advice could help you. As well as also, there's a lot of thinking that needs to go into doing a power of attorney. You know, what structure, what you actually want to happen, what are the questions to ask yourself. So hopefully for those of you who do want to do it yourself, that's given you a little bit of help. But don't think that means I recommend that's the first option that you should be taking. In many cases, advice is probably the best.
1:14:53 Martin Lewis? That's it for this week. Thank you so much to our two solicitors who were absolutely brilliant. If you've enjoyed today's podcast, please tell your friends you've been listening to the Martin Lewis podcast and why not suggest they and you subscribe, then your pockets will be pleased with you. We tend to put out a new episode every Thursday and if you've not enjoyed it.
1:15:29 Speaker 06 Martin Lewis is the founder of MoneySavingExpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing [email protected] . The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.
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