Will vs Lasting Power Of Attorney (LPA) : Which One Do I Need?

Understanding Wills and Lasting Power of Attorney (LPA)

When it comes to planning, it’s essential to consider legal tools that can protect your interests and provide peace of mind.

2 of the most common legal tools that come to mind are Wills & Lasting Power of Attorneys.

While they are both fundamental tools in estate planning, they serve different purposes, and it’s important to understand the differences to make the right choice for you.

In this article, we will dive into the definitions, functions, and advantages of Wills and Lasting Power of Attorneys. Whether you are planning for your future or helping a loved one, this article will help you decode these legal tools and choose the right one for your needs.

Table of Contents

will

1. Differences Between A Will And A Lasting Power Of Attorney (LPA)

Will

  • A Will is a legal document that outlines your wishes regarding the distribution of your assets and the appointment of guardians for any minor children.
  • It comes into effect upon your death and provides instructions on how your estate should be managed and distributed.
  • It ensures that your assets are distributed according to your wishes and can help avoid disputes among family members.

Lasting Power of Attorney (LPA)

  • A LPA is a legal document that grants someone you trust the authority to make decisions on your behalf if you become unable to do so due to mental or physical incapacity.
  • A LPA only comes into effect if you lose your mental capacity.
  • A LPA is designed to address situations where you are still alive but unable to make decisions for yourself. It provides a legal framework for someone you trust to act on your behalf and ensure that your best interests are protected.

It’s important to note that a Will and a LPA serve different purposes and are not mutually exclusive.

In fact, having both in place can provide comprehensive protection for your personal and financial affairs.

It’s advisable to consult with an experienced estate planning lawyer to determine the best approach for your specific circumstances and ensure that your wishes are accurately reflected in these legal documents.

2. Scope Of Authority And Decision-Making Power

  • A Will is a legal document that outlines your wishes and instructions for the distribution of your assets and the appointment of guardians for minor children after your death. It allows you to have control over your estate and ensures that your loved ones are provided for according to your wishes. The scope of authority in a Will only comes into effect after your passing.
  • A LPA grants decision-making power to someone you trust, known as an attorney, to make important decisions on your behalf in case you become unable to do so due to mental or physical incapacity. This includes decisions regarding your health and welfare, as well as your property and financial affairs. The scope of authority in an LPA is active during your lifetime and can be a valuable tool for managing your affairs if you ever lose the ability to make decisions for yourself.
  • The key difference between the two lies in the timing and extent of authority.

A Will takes effect upon your death, while an LPA is active during your lifetime and can be used when you are unable to make decisions for yourself.

 

3. Execution And Validity Requirements

  • When it comes to legal tools like a Will or a LPA, it is crucial to understand the execution and validity requirements for each.
  • These requirements play a significant role in ensuring that your wishes are legally binding and will be upheld in the event of your incapacitation or demise.
  • For a Will to be valid, it usually requires the individual to be of sound mind, aged 18 or above, and have their signature witnessed by two independent witnesses. The witnesses should not be beneficiaries named in the Will to avoid any conflicts of interest.
  • Similarly, creating a LPA involves specific criteria. The individual must be mentally capable of understanding the implications and consequences of appointing an attorney. They must also have a clear understanding of the powers granted to the attorney and the potential impact on their personal and financial matters.

 

4. Personal Circumstances And Preferences

  • When it comes to planning and making important legal decisions, considering your circumstances and preferences is crucial. Both a Will and a LPA serve different purposes, and understanding which one is right for you depends on various factors.
  • Suppose you have specific wishes regarding the distribution of your assets after your passing. In that case, a Will is the legal tool for you.
  • On the other hand, if you are concerned about potential incapacity in the future and want to ensure that someone you trust can make decisions on your behalf, a LPA might be more suitable.

 

5. Scenarios Illustrating When A Will Is More Suitable

Scenario 1: Limited Assets and Simple Distribution

  • Suppose you have a relatively modest estate with straightforward distribution preferences.
  • In that case, a Will can be a practical and cost-effective solution.
  • For example, if you own a small property, have a few bank accounts, and wish to leave your assets to immediate family members, a Will can clearly outline your intentions.

Scenario 2: Naming Guardians for Minor Children

  • One of the most critical aspects of a Will is the ability to name guardians for your minor children. Suppose you have dependents who are not yet of legal age.
  • In that case, a Will allows you to designate a trusted individual or couple to care for them in the event of your passing.
  • This provision ensures that your children are protected and raised according to your values and beliefs.

Scenario 3: Customized Distribution Instructions

  • A Will provides the flexibility to include specific instructions for asset distribution.
  • For instance, if you have sentimental items or family heirlooms that you want to pass on to particular individuals, a Will allows you to express these wishes explicitly.

Scenario 4: Establishing Charitable Donations

  • Suppose you have a philanthropic inclination and wish to leave a lasting impact through charitable donations.
  • In that case, a Will is the appropriate legal tool.
  • You can specify the organizations or causes you wish to support and allocate a portion of your assets to be donated accordingly.
  • This ensures that your charitable goals are fulfilled even after you are gone.

In these scenarios, a Will provides the necessary legal framework to ensure your wishes are carried out precisely as you intended.

Consult with a qualified legal professional to ensure that your Will is properly drafted and legally enforceable.

 

6. Scenarios Illustrating When A Lasting Power of Attorney Is More Appropriate

Scenario 1: Dealing with Potential Incapacity

  • Suppose you have concerns about your mental or physical health deteriorating in the future, and you want to ensure that your affairs are handled by someone you trust.
  • In this case, an LPA allows you to appoint an attorney who can act on your behalf should you become unable to make decisions for yourself.
  • This way, you can have peace of mind knowing that your preferences and best interests will be respected, even in challenging circumstances.

Scenario 2: Managing Ongoing Financial and Property Matters

  • Suppose you anticipate needing assistance in managing your financial and property affairs due to reasons such as illness or physical limitations.
  • In that case, a LPA can grant your chosen attorney the authority to handle such matters on your behalf.
  • This arrangement ensures that your financial obligations are met, your assets are protected, and your financial affairs continue to run smoothly, even in your absence or incapacity.

It’s crucial to assess your unique circumstances and consider these scenarios when determining whether an LPA is more appropriate for your situation.

Consulting with legal professionals can provide further insight and guidance tailored to your specific needs, ultimately helping you make an informed decision that safeguards your interests and ensures peace of mind.

 

7. Frequently Asked Questions About Wills & Lasting Power of Attorneys

Q:  What is a Will?

A:  A Will is a legal document that outlines your wishes regarding the distribution of your assets and the appointment of guardians for your minor children after your passing. It allows you to specify who will inherit your property, money, and possessions, ensuring that your loved ones are taken care of according to your wishes.

 

Q:  What is a Lasting Power of Attorney (LPA)?

A:  An LPA is a legal document that grants someone you trust the authority to make decisions on your behalf if you become mentally or physically incapable of doing so.

 

Q:  Can I have both a Will and a LPA?

A:  Absolutely! In fact, it is highly recommended to have both a Will and a LPA in place. While a Will primarily deals with matters after your passing, a LPA ensures that your affairs are taken care of during your lifetime, should you become unable to make decisions yourself.

 

Q:  When should I make a Will or a LPA?

A:  It is never too early to start planning for the future. Ideally, you should create a Will as soon as you have assets or dependents that you wish to protect. Similarly, a LPA should be considered when you are of sound mind and able to make decisions regarding who you trust to make important choices on your behalf.

 

Remember, every individual’s circumstances are unique, and it is essential to consult with a legal professional to determine the best course of action for your specific needs.

By understanding the answers to these frequently asked questions, you can make informed decisions about Wills and LPAs, ensuring that your wishes are respected and your loved ones are taken care of in the future.

Share Post: