Finances

Making a will

Everyone over 18 should make a will. This need not be complicated—there are cheap will writing ‘kits’ available to buy, and forms can be downloaded from the Internet even more cheaply, eg M http://freeguard.co.uk/aboutus.aspx
The will should be kept in a safe place, and family members informed
Wills that are more complex should be made through a solicitor
It is common for the question of wills to arise for the first time when someone becomes ill, often in hospital
Doctors may become involved where there is doubt about the patients capacity to make a will
Capacity (competence) is covered in detail elsewhere (see ‘Capacity’, p.654). It is decision-specific so must be reassessed for each important decision a person makes

Testamentary capacity

This is defined in England and Wales by a specific set of legal criteria. These criteria were established in the 1870 court case of Banks v Goodfellow.

A person drawing up a will must:

Understand the nature of the act and its effect—ie know that they are choosing whom to give their property to after death
Understand the extent of the property being willed —this need not be precise, but the person should know roughly what they are willing (eg a house and savings) along with details of any joint ownership and debts. The larger the estate, the clearer this understanding should be
Understand the nature and extent of claims on them—both included and excluded parties. This means the person should be able to say who might reasonably expect to benefit from their will (spouse, children, etc.) and if people are excluded, give reasons why
Have no mental disorder directly influencing points 1-3 —this does not mean that a will cannot be made if someone has a mental disorder—rather that this is not colouring his or her specific testamentary capacity. This can be hard to prove, but an example may be where a demented patient develops paranoid delusions about a caring spouse, and excludes him or her from the will as a result
Be under no undue influence from third parties—this again may be hard to prove except in very overt circumstances

It is sensible to assess capacity at the time the will is drawn up, and then briefly check at signing (these can be some time apart).

A doctor asked to assess testamentary capacity should question the person with direct reference to Banks v Goodfellow criteria, and make clear contemporaneous notes (with direct quotes) that support the conclusions drawn.

It is probably better to avoid being a witness to a will signing for patients in your care (this can be done by anyone), as this may be confused with a formal capacity assessment.

Further reading

Posener HD, Jacoby R (2002). Testamentary capacity. In: Jacoby R, Oppenheimer C (eds) Psychiatry in the Elderly, 3 rd edition. Oxford: Oxford University Press, pp. 932-40.

Taxation

Most income received by older people in the UK is taxed
The allowance of tax-free income rises with age—in 2011, people under 65 can have an income of £7475 per annum without paying tax, whereas this figure rises to £10,090 age 75 and over
Some income is not taxed—eg attendance allowance, pension credit, winter fuel payments, council tax and housing benefit, and war pensions
Some lump sums are also not taxed, for example from certain private pension schemes. Good financial advice will help to optimize an older person’s resources
The rate of tax then depends on the total income, ranging from 10% at lower incomes up to 50% for incomes over £150,000 per annum

Pensions

As life expectancy extends many older people can now look forward to long periods in retirement. Although there is a shift away from being totally financially dependent on the state towards financial planning and personal pensions, there is still a real risk of poverty for many very elderly people. Fuel poverty is one marker (defined as spending more than 10 % of disposable income on fuel) which is a political priority.

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