Planning for Death and Incapacity
Few of us wish to think about our own mortality, or what will happen after we are gone. We also do not wish to think about the possibility that we might be incapacitated and unable to make our own decisions. However, it is important to think about these things beforehand. Once you are dead or incapacitated, it is too late—and while this doesn’t matter for you, it could matter a lot to those around you.
Our page on Talking About Death notes that there is a huge taboo about talking about death in many cultures. However, it points out that it is important that we consider these things calmly, while we are able to do so. This page discusses the issues around planning for death and incapacity, including financial and legal issues, and how to ensure that your loved ones are protected.
A Question of Contingency Planning
Think of planning for your death or incapacity as contingency planning: considering what might happen, and how you can protect others.
This may seem an odd way of looking at things. After all, as Benjamin Franklin reportedly said, only two things in life are certain: death and taxes. However, it may be helpful as a way to keep calm and rational about something that few of us wish to dwell upon: our own mortality.
Planning for Incapacity or Illness
Unfortunately, illness and incapacity can affect anyone at any time—and as you get older, the likelihood becomes higher.
For example, around 5% of the world’s population, about 50 million people, are currently living with dementia. These figures are projected to increase to around 152 million by 2050, an increase of over 200%. This is partly the result of increasing life expectancy. More of us are living longer, so more of us are developing age-related conditions—and many of these conditions affect our ability to make decisions about ourselves and our lives.
Dementia is perhaps the best known of these conditions, but issues can arise as a result of other illnesses or accidents. These can strike ‘out of the blue’—and it may then be too late to protect your partner or children by getting married, or making a formal financial arrangement (see box).
Case study: Derek Draper and Kate Garraway
In March 2020 in the UK, former political adviser Derek Draper was hospitalised with COVID-19. He was in an induced coma for several months, and in hospital for a year. He has liver and pancreatic damage, kidney failure, and heart failure, as well as holes in his lungs from several severe bacterial infections while on a ventilator.
His partner, television presenter Kate Garraway, was open about the challenges that she faced during his hospitalisation, in the hope of helping other people avoid her situation.
She has spoken in interviews about the fact that she could not access his bank account or credit cards, and that her financial situation was difficult because she stopped work while he was in hospital. She could not refinance their joint mortgage without him signing the paperwork, or update their mobile phone contracts—all of which were in his name. She has also said that she could not see his medical notes because of data protection.
Kate Garraway’s issues arose partly because she and Derek Draper were not married—and UK law does not recognise ‘partners’, even if they own a house and have children together. However, this is not the whole story.
Even spouses or civil partners can have trouble in the event of someone’s sudden incapacity. You certainly have no right to deal with your spouse or partner’s financial affairs if they are unable to do so.
There are ways to manage this.
You can put all or some of your finances in joint names
For example, if there are particular accounts that you use to pay for an important element of your lives, such as the mortgage, put that into both names. This means that both of you will always be able to access those bank accounts if necessary. This will at least give you some financial protection.
It is also helpful to put your utility bills into both names, so that there is no question about the company needing to ‘talk to the account holder’ before any changes can be made. The same applies to insurance: if you cannot put policies in joint names, then at least make sure that the company has a letter on file that authorises either of you to deal with the account.
Set up a power of attorney in advance
A power of attorney allows someone else (your attorney) to make decisions for you, or act on your behalf, if you are not capable to acting for yourself. This might be temporarily, for example, while you are in hospital, or it might be permanent, for example, if you have dementia.
If you have not set up a power of attorney, then your spouse or partner may need to go to the Court of Protection, or similar authority in your country, to get access to finances, or be authorised to make medical decisions on your behalf. This can take some time—which is why it is important to think ahead.
Understanding Powers of Attorney
In the UK, there are different types of powers of attorney: ordinary and lasting.
An ordinary power of attorney gives someone you appoint (your attorney) the power to make decisions about your finances for a limited period.
A lasting power of attorney is needed if you have permanently lost the capacity to make decisions. There are two sorts: covering health and care decisions, and covering financial decisions. You can set up either or both. A lasting power of attorney is registered while you have capacity, and then can be used at any time in the future if necessary.
Making a Lasting Power of Attorney
To set up a lasting power of the attorney in the UK, you need to fill in a form available from the Office of the Public Guardian. You have to sign the form, and so do your attorneys (to confirm that they agree to act on your behalf). Your signatures on the form must be witnessed. The form must also be signed by someone else (that is, not a witness or an attorney). Their role is to confirm that you are making the power of attorney of your own free will, and not being coerced into it, and that you have the capacity to make that decision.
You also need to register the power of attorney with the Office of the Public Guardian.
You can find out more from the UK government page on lasting power of attorney.
In other states, the rules and arrangements governing powers of attorney may vary. In the US, for example, general powers of attorney are accepted in all states, but the precise rules vary slightly between states. You can also specify to which aspects of your life the power of attorney applies.
Legal advice is advisable
When making a power of attorney, it is advisable to get legal advice to ensure that what you are doing is legally correct. It is easy to make a mistake—and much harder to correct it later.
Planning for Death
The financial issues mentioned above can also be an issue when you die.
For example, when you die, your bank accounts are immediately frozen. The funds in them will not be released except to those handling your estate, and then only after you have received probate.
An important part of your contingency planning should therefore be to ensure that your partner has access to sufficient shared funds to be able to manage until your estate is released.
This may mean putting money into joint accounts, or sharing your savings more evenly. For example, check whether your savings are all or mostly in one partner’s name—and if so, make the accounts joint, or move some money into accounts in the other partner’s name. It is particularly important to ensure that both partners have access to the funds used to make basic payments in your lives, such as the mortgage, or any household direct debits.
Similarly, try to ensure that all utilities and household accounts are in joint names, because this makes continuing with the accounts much easier after the death of one partner.
You should also provide a document setting out what you want to happen to your money and other assets after you die. This is known as your will.
What is a Will?
A will is a legal document that sets out your wishes about what should happen to your property after your death. It also states who should be responsible for managing your property until it can be distributed, and then distributing it to the beneficiaries (the people who benefit from your will).
There are provisions in law to say how your estate will be distributed if you die without a will (known as dying intestate. However, these are quite complicated for all those involved. It is much better to simply make a will, however basic.
Writing a Will
A will is a legal document, so it is important that it is drawn up correctly. This does not mean that you absolutely need to involve a solicitor—but it may be helpful.
However, you can get forms online or from organisations like the Citizens’ Advice Bureau and create your own will if you wish.
The important aspects to consider are to:
Set out your wishes clearly and as simply as possible. Try to avoid complicated provisions like I leave Thing x to Person y, but only if they are prepared to do Activity z. These are difficult for executors to manage, and almost unenforceable in practice. After all, who is going to check up on it? Try not to tie anyone’s hands more than necessary.
Ensure that any children will be protected in the event that you and your partner die together. You can both appoint guardians—but it is sensible if you agree beforehand who should be appointed.
Appoint executors who will ‘manage’ your will for you. You can appoint a solicitor, or another respected member of the community, such as a religious leader, or you can appoint family members or friends. A solicitor will, of course, require to be paid for their actions. It is advisable to ask your executors before appointing them.
Have your signature witnessed by two people who are independent—that is, who are not beneficiaries under the will, or executors of the will.
Put your will somewhere it will be found, such as a deedbox or lodged with your solicitors. Leave instructions about its location with several people.
WARNING! Just making a will (or power of attorney) is not enough
Making a will is extremely important.
However, it takes time for a will to be proven, and to receive probate—and until then, nobody can access the estate, not even to pay for a funeral.
It is therefore vital that you also take the other steps mentioned here, such as putting money into joint accounts.
A Final Word
Your will is, effectively, your own final word.
It is therefore essential that you take the fairly simple steps needed to make one that fully reflects your wishes for the distribution of your property. Similarly, setting up a power of attorney is not a difficult process, but it could save an enormous amount of heartache at a later date.
Both these actions will protect both your property, and your partner or family—and that is surely worth doing.