wills power of attorneys

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Q. I recently heard that Wills can cause problems: the estate may be under dispute for a long time or the government may even take part of it (taxes?). Is this so? If so, then as an alternative, is it better to leave a power of attorney instead where person has complete access to the estate including bank accounts etc. caveats?

A. Same thing happens if you die without a will. Actually, it is more likely that their will be a dispute which will tie things up for a long time. The government will take the same amount, and the lawyers may end up taking more. Additionally, the laws regarding intestacy and not you will decide who gets what. A power of attorney ends when you die. So this doesn't work. An attorney who uses the power of attorney after you die to deal with your assets is likely committing a criminal offence. Even if the offence is not criminal, the attorney would be liable to pay the funds back to the estate and to the proper beneficiaries. So, that's not an option. There is two other options. The first is to give all of your property away before you die. Not really a good idea, because you might actually need it. Some people have given their homes away to their children in the expectation that the children would let them live there to find that they are getting evicted, and the children are selling the house. Its really a dumb option, but some people might try it. Taxes may well be payable when you do these things, or they may be higher in the future. There is another option. That is an inter vivos trust. Of course, this involves giving your property away before you die. A trustee holds the property subject to the conditions in the trust. The forming of such a trust may trigger taxes (similar to those payable when you die), and it may be expensive to administer the trust. Its a good idea, particularly if you have many millions. But your mileage will vary, and you should consult competent legal counsel prior to embarking on anything like this, and consider carefully whether the costs, benefits, and liabilities are a good idea in your case. The final option is to get a good will drawn up by a good lawyer. That is the option chosen by most, and is a good idea. An enduring power of attorney (aka a durable power of attorney) is also a good idea.

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