Generally if you want something in life, you’re going to need to find the money to pay for it. As the old saying goes, nothing in life is free. But what about the end of our lives? Death certainly comes to us all – but is there a price to pay?
Well yes, actually, there is. And it’s something that many people don’t think about. We’re so concerned with saving money to pay for the car’s next MOT or putting cash aside for a summer holiday, it might not occur to us to save for a time when we’re not even here.
But in fact the end of someone’s life can be associated with all sorts of costs. The problem is, it’s a bit of a morbid subject. Often people don’t want to think about it, and decide to leave it to their loved ones to sort out when the time comes.
And while you can do this, it’s likely to have financial implications. That’s because the costs associated with the end of someone’s life can be a bit like a parking ticket – the longer you leave it, the higher the price will be.
This reality is best illustrated by our two elderly widowers, Jack and John.
Shortly after his 80th birthday, Jack is diagnosed with dementia. His condition rapidly deteriorates and soon he’s unable to make decisions about his finances or his day-to-day care.
He didn’t ever put a Lasting Power of Attorney in place, so none of his family or friends have the legal authority to act on his behalf. So it’s left to his two grown-up children to apply to the Court of Protection for a Deputyship Order.
This involves sending five different forms (which range from eight to 12 pages long) and a £400 fee to the Court of Protection. There’s then another six forms to fill in, amounting to a further 20 pages of paperwork.
The Court decides a hearing is necessary, which costs £500. As they’re new Deputies, they’re told they must also pay a £100 assessment fee, an annual supervision fee, and a security bond.
The application process takes months, during which time Jack suffers a fall. His daughter thinks it would be safer if he moved to a care home, but his son disagrees and says he’ll look after Jack himself. Neither of them has the overarching authority to make decisions about his day-to-day care, so the argument rages on.
In the end the dispute becomes irrelevant, as Jack passes away in hospital, having never recovered from his fall. He didn’t leave a Will, so it’s up to the law to decide who gets what. As Jack is a widower, the Rules of Intestacy say his Estate should be split evenly between his two children.
However, Jack had a step-daughter. They’d remained close after her mother (Jack’s second wife) died five years earlier. She says that during his life, Jack had frequently expressed his intention to leave her some money. As she hasn’t been provided for under the Rules of Intestacy, she decides to make a legal claim.
It takes two years for the claim to make its way through the Courts, and it concludes with Jack’s step-daughter being awarded a lump sum of money. During this time, Jack’s children have not been allowed to complete the Estate administration process, so have not received their inheritance. This means they have to pay for the £4,000 funeral out of their own pocket.
Furthermore, the lengthy Court battle has caused them to rack up a large legal bill. They eventually pay their costs using the funds in Jack’s Estate. But this is now considerably smaller due to the payment to Jack’s step-daughter, so there is little money left over for them to enjoy.
In all, Jack’s lack of planning has cost his children thousands of pounds, not to mention mounds of paperwork and years of emotional turmoil. The last few years of his life were fraught, and they didn’t have the resources to deal with their grief once he passed away, as they were so consumed with the legal and administrative issues at play.
John is distressed to witness the difficulties Jack’s relatives have faced. He decides he doesn’t want that for his own loved ones, so he sets about putting plans in place.
He knows there’s a history of Alzheimer’s in his family, so the first thing he does is to make a Lasting Power of Attorney before it’s too late. He puts both a Health and Welfare LPA and a Property and Financial Affairs LPA in place. This cost him £540, plus an £82 Court fee for each LPA.
Sadly he does develop the disease, but his trusted nephew has been appointed to act as his Attorney. His nephew immediately takes control of John’s health and welfare, and of his finances. He organises everything on John’s behalf, making decisions about his medication, settling bills, and drawing funds from John’s bank account as and when required.
When John dies two years later, it becomes apparent that he had a pre-paid funeral plan. He had managed to pay this off a number of years ago, so the funeral costs are all taken care of.
His Will is then found amongst his possessions, which incidentally cost £150 to make. John has decided to split his Estate evenly between his five children. He’s not had much contact with them over the years, but writes a Letter of Wishes to accompany his Will, in which he explains his motivation.
John’s wishes are clearly set out, so no one challenges the Will. His nephew has been appointed to act as the Executor, so he can administer the Estate knowing the details of his uncle’s assets and liabilities, apply for a Grant of Probate and distribute the Estate to John’s children. The entire process takes around nine months.
During the last few years of John’s life, his loved ones are relieved that they don’t have to worry about money, as there aren’t any costs to pay. There aren’t any delays, legal battles or arguments, making the whole period a lot easier for those involved – both financially and emotionally.
End of Life Planning
OK, so Jack’s story might be a worst-case scenario. But it’s not unrealistic, and there are countless families who face similar situations every year.
It just goes to show that if you fail to put any arrangements in place, things can become very difficult, very quickly. But with the correct end of life planning – such as making a Will, a Lasting Power of Attorney and a funeral plan – you can take steps to help settle the last bill you’ll ever pay, ensuring your loved ones don’t have to pick up the tab.
For free initial advice and guidance call Co-op Legal Services on 0330 037 1808 or contact us online and we will help you.