For those who have not already put in place your Will and Power of Attorney, AND/OR for those who have, we wanted to stress the importance of ensuring you have them and regularly review them (at least every 3-5 years).
Wills
Having a Will ensures your assets are distributed according to your wishes after your death, avoiding legal disputes and ensuring loved ones are taken care of. It also allows you to appoint guardians for minor children.
If you do not have a Will in place upon your death, you are said to die ‘intestate’. Dying intestate means your assets are distributed according to state law, which may not align with your wishes. This can lead to family disputes, legal complications, and potential financial hardship for your loved ones. The court also decides guardianship for minor children, possibly against your preferences.
Powers of Attorney
A Power of Attorney (currently an Enduring Power of Attorney on the Isle of Man) grants a trusted person the authority to make financial decisions on your behalf if you become incapacitated, ensuring your affairs are managed according to your preferences and relieving loved ones of the burden during stressful times.
Without a Power of Attorney, if you become mentally incapacitated, the court appoints a guardian to make decisions for you. This process can be time-consuming, costly, and stressful for your family, potentially leading to decisions that do not reflect your preferences.
Regular Reviews
Regularly reviewing both your Will and Power of Attorney is equally important to having them set up in the first place, ensuring you are still happy with the people you have appointed to look after your financial affairs, as well as who may benefit from your estate in the future.
Please get in touch with an appropriately qualified company to organise and/or review your Will and Power of Attorney. If you do not know of anyone, we would be happy to introduce you to someone.
What happens to my estate if I have no Will?
ADMINISTRATION OF ESTATES ACT 1990
PART III – DISTRIBUTION ON INTESTACY 52 Succession on Intestacy [1973/7/1-3; 1979/17/2; 1982/8/23]
(1) The residuary estate of an intestate shall be distributed in the following manner or held on the following trusts —
(a) If the intestate leaves a spouse or civil partner but no issue, the residuary estate shall be held in trust for the surviving spouse or civil partner absolutely.
(b) If the intestate leaves both a spouse or civil partner and issue, then —
(i) the surviving spouse or civil partner shall take the personal chattels absolutely, and
(ii) in addition, the residuary estate (except the personal chattels) shall stand charged with the payment of a net sum of £250,000, free of duties (if any) and costs, to the surviving spouse or civil partner with interest at such rate as the Treasury may by order prescribe from the date of death until paid or appropriated, and
(iii) subject to providing for that sum and the interest thereon, the residuary estate (except the personal chattels) shall be held, as to one half, on trust for the surviving spouse or civil partner absolutely, and as to the other half, on the statutory trusts for the issue of the intestate.
(c) If the intestate leaves issue but no spouse or civil partner, the residuary estate shall be held on the statutory trusts for the issue of the intestate.
(d) If the intestate leaves no spouse or civil partner and no issue but both parents, the residuary estate shall be held in trust for the father and mother in equal shares absolutely.
(e) If the intestate leaves no spouse or civil partner and no issue but one parent, the residuary estate shall be held in trust for the surviving father or mother absolutely.
(f) If the intestate leaves no spouse or civil partner, no issue and no parent, the residuary estate shall be held in trust for the following persons living at the death of the intestate, and in the following order and manner —
(i) on the statutory trusts for the brothers and sisters of the whole blood of the intestate; but if no person takes an absolutely vested interest under those trusts, then
(ii) on the statutory trusts for the brothers and sisters of the half blood of the intestate; but if no person takes an absolutely vested interest under those trusts, then
(iii) for the grandparents of the intestate and, if more than one surviving the intestate, in equal shares, but if there is no member of that class, then
(iv) on the statutory trusts for the uncles and aunts of the intestate (being brothers or sisters of the whole blood of a parent of the intestate); but if no person takes an absolutely vested interest under those trusts, then
(v) on the statutory trusts for the uncles and aunts of the intestate (being brothers or sisters of the half blood of a parent of the intestate); but if no person takes an absolutely vested interest under those trusts, then
(vi) on the statutory trusts for the great-uncles and great-aunts of the intestate (being brothers or sisters of the whole blood of a grandparent of the intestate); but if no person takes an absolutely vested interest under those trusts, then
(vii) on the statutory trusts for the great-uncles and great-aunts of the intestate (being brothers or sisters of the half blood of a grandparent of the intestate).
(g) If no person takes an absolute interest under paragraph (a) to (f), the residuary estate of the intestate shall belong to the Treasury as bona vacantia.
(2) The Treasury may, out of the whole or any part of the property devolving on it under subsection (1), provide in accordance with the existing practice for dependants of the intestate, and other persons for whom the intestate might reasonably have been expected to make provision.
(3) The Treasury may by order alter the amount of the net sum specified in subsection (1)(b) (or the amount substituted therefor by a previous order under this subsection), but no such order shall have effect unless it is approved by Tynwald.
(4) The interest payable under subsection (1)(b) shall be primarily payable out of income.
(5) Without prejudice to subsection (2), subsection (1) has effect subject to the provisions of the Inheritance (Provision for Family and Dependants) Act 1982.
(6) A husband and wife shall for all purposes of distribution or division under this section be treated as 2 persons.
(7) Where an intestate’s spouse or civil partner survives the intestate but dies before the end of the period of 14 days beginning with the day on which the intestate died, this section has effect as respects the intestate as if the spouse or civil partner had not survived the intestate.
What happens if I do not have a Power of Attorney in place and I lose capacity to act?
Without an Enduring Power of Attorney in place, in the event of your mental incapacity someone would need to apply for a Mental Health Receivership through the Courts, which is complex, costly and can cause significant stress to your loved ones. There are strict rules behind a Mental Health Receivership Application whereby unless in extenuating circumstances, it can only be one person appointed as your Mental Health Receiver and this person must reside on the Isle of Man. Furthermore, that person has to submit accounts to the Courts every year to evidence what monies have been spent on what. As you can imagine for married couples this can prove to be very difficult as you need to evidence what money out of any joint funds you have used for yourself and what you have used for your mentally incapacitated spouse.
If you wish to change any assets held jointly with the person who has lost mental capacity or their own sole assets, for example selling a home, you need to apply to Court for permission to do so. This causes significant time, costs with complex Court Applications.
Additionally, if you do not have any family on the Isle of Man and there is no one who could apply to be your Mental Health Receiver, the Courts will select a Mental Health Receiver for you from the list of advocates available or the Attorney General to take up this complex role. Any court and professional charges for a professional Receiver are deducted from your own finances.
Don’t delay. Ensure you have a Will and Power of Attorney in place and/or review any existing arrangements to make sure they are still in line with your preferences.