Finding the Will

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I talk a lot about why it’s important to make a Will. You get to decide who to pass things on to. It makes things easier for those you leave behind. It’s just good preparation; good housekeeping, if you like.

When someone dies without having made a Will, there can be a great deal of uncertainty about what should happen to their assets and liabilities. These things – whether they’re physical property, like a home and possessions, or money tied up in accounts (and debts owed) – have to be dealt with. And where a Will has not been left, the rules of intestacy determine how that should be done and who should inherit. Intestacy is rarely a straightforward process and it can be particularly difficult for family and friends who are coming to terms with their loss.

So, the sensible option is to make a Will. But it’s important once you’ve made your Will to make sure it will be found once you have passed away. This might sound like pretty basic stuff, but you’d be surprised at the number of cases I’ve dealt with over the years where family and friends have been at a loss as to the whereabouts of a loved one’s Will. They tell me, “I’m sure he made a Will”, or “She probably would have”. But that is sometimes about as certain as it gets because they simply don’t know for sure whether a Will exists or where it is. In some situations, family members assume there’s a Will when there isn’t – one was never made, or it has been destroyed.

Tracking down a Will can be simple, or it can be extremely difficult. The ideal scenario is that the deceased had let family members know that they had made a Will and where it was kept. However, in my experience, this is something quite frequently overlooked.

It’s relatively common for a Will to be filed away at the deceased’s home, so it’s always a good idea to check through desk drawers and cabinets. But where that proves fruitless, or where you want to check that the version you have found is the most up-to-date (remember that Wills can, and should, be updated over time), the next port of call will usually be the deceased’s solicitor. Law firms like ours usually store Wills in the strongrooms of our offices. So if you know the name of the deceased’s solicitor or firm, contacting them would be a wise move.

There are other avenues that can be explored if nothing has turned up. These include checking with the deceased’s bank (a safe deposit box, perhaps?) or with their other professional advisors.  An appeal for information can be placed in the Law Society Gazette. And there are various organisations whose job it is to search for missing Wills; you could try one of those.

It’s important to exhaust every possible route to laying your hands on the original, signed Will (and not merely a copy). That is the document that will need to be inspected by the Probate Registry before permission – a Grant of Probate – will be given for the deceased’s estate to be distributed. In some cases, a Grant of Probate will be issued even though the original Will has not been provided, although whether a copy will be acceptable will depend on all the circumstances, including who would stand to benefit/lose out if the copy Will were/were not allowed to stand.

That is all best avoided if possible. It’s why when we advise clients on making their Will, we discuss storage options and recommend they keep at least one close family member informed of the details. And if all paperwork – share certificates, insurance documents, deeds, financial documents, for example – are also neatly filed away, that too will make the job of distributing your estate so much easier for those you leave behind.

Need a Will?

For advice about making a Will, or to discuss any aspect of Wills and Probate, contact us 0808 256 2917 or email [email protected].

A Taxing Time

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‘Now is not the right time to outline long-term plans’.

Those were the words from the Treasury as it announced that this autumn’s Budget would not be going ahead. This didn’t come as a surprise; many people will have seen the scrapping of the Budget as the only option given the current state of mid-coronavirus flux.

But what does seem certain is that when the Budget eventually happens, we will face a tougher tax regime that seeks to pay towards the huge financial buffer put in place to protect jobs and the economy during the pandemic.

None of us can say for sure what those changes will be, or just how they will affect people, families and businesses. And with regime change likely, you may be unsure about how best to prepare for the future or whether to do so at all.

We’re urging our clients not to press pause on their financial planning. In fact, now is a great time to take stock; to get your affairs in order and revisit any existing arrangements. Build a detailed picture of your assets – your possessions, property, money, investments, shares – and start to think about passing these on to the right people in ways that will retain their value and give maximum benefit.

As Private Client solicitors, we help clients achieve that by advising on creating trusts and on making lifetime gifts, both of which can reduce beneficiaries’ liability for what is possibly the most unpopular tax of all – Inheritance Tax (IHT). Under current rules, up to £500,000 out of one person’s estate (‘estate’ being the things you own) can be passed on to beneficiaries without triggering IHT. That half-a-million figure is made up of £325,000 out of the estate, plus £175,000 representing the ‘main residence’ band (ie your main estate is being passed to a direct descendent). Once that £500,000 figure is reached, the value of anything above it is usually taxed at 40%. That percentage can be reduced a little if you leave some money to charity. And a whole estate passed on to a spouse or civil partner should not attract IHT at all.

While IHT only kicks in if the assets you are passing on are valued at more than £325,000 (or £500,000 if the main residence band applies), it remains a real concern for those people and families that have more to their name. The prospect of handing over to the Treasury almost half of the value of assets in excess of the £500,000 limit can be unappetising, to say the least.

Earlier this year, MPs called for the standard 40% rate to be cut to 10%. They also called for most reliefs, including the ‘seven-year rule’ (the rules that says that IHT will be charged on gifts worth more than £325,000 if you die within seven years of making them) to be scrapped. With the government eager to claw back money handed out during the coronavirus, it is difficult to see how reforms that would ostensibly lead to lower recoupment via tax would appeal to the Treasury at this time. But that of course depends on the merits of other new  provisions.

Let’s see what comes of the rescheduled budget. And if we can offer one piece of advice in the meantime, it is: don’t leave your financial future, and that of your loved ones, to chance.

  • Make a Will.
  • Review an existing Will to check it’s up-to-date as well as still being relevant and viable.
  • Consider ways of clearing and structuring debts (remember  that while debts reduce the value of an estate – potentially taking it below the IHT threshold – they still need to be paid out of the estate before inheritance can be distributed to beneficiaries).
  • Get good advice on maximising your tax-free allowance and on dealing with assets during your lifetime to tee-up a better financial outcome for your beneficiaries.

Whether you are a natural planner or not, there’s really no substitute for thinking ahead when it comes to passing on the assets you’ve worked hard to accumulate. Our team is here to help you do that.

For advice about any aspect of Wills and inheritance tax, contact us 0808 256 2917 or email [email protected].

Wills and Estate Planning

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The Corona Virus has already changed our lives; yet it will continue to do so in many profound and unexpected ways.

Preparing for the unprecedented is difficult – perhaps even impossible to do perfectly – but preparing your tax affairs and making a Will is actually pretty easy with help from one of our lawyers, even if your situation seems impossible to you.

With over 70s in advised self-isolation, and everyone else encouraged to social-distance, we have devised ways of taking instructions without meeting you, and this has already proved successful with clients so far. The entire process can be carried out online, or for those with less experience with the internet by phone and post.

We take you through the whole process and give you a full personal legal health check in conjunction with advice on Wills.

This includes:

  • Inheritance Tax issues
  • Pension and life insurance advice on existing policies (if you don’t already have these, we may recommend a financial adviser to implement where appropriate)
  • Joint property and investment ownership (these have a bearing on the way Wills are drafted)

With the Will itself we will go through all the usual matters to consider, as well as any particular to your circumstances. This would normally include:

  • Residency and domicile issues
  • Choice of executors
  • Funeral wishes and arrangements (entirely optional)
  • Choice of guardians for minor children
  • Personal possessions
  • Cash legacies to individuals
  • Charitable legacies
  • How you wish to divide your estate and who should benefit
  • Will Trusts if life interests or second partners, step children etc are present
  • Anything more complex that fits your situation

These are important issues and we urge anyone with property or children or moderate wealth to have a Will and take associated advice. It will save your family uncertainty and money in the long term.

It is also important to talk about Inheritance Tax when considering your Will. There are rumours of the Treasury making changes to regime which will adversely affect many peoples’ estates. Our experts can help plan ahead and create a Will that anticipates these changes so you don’t have to be reactive in the future.

Please contact one of our team for further advice. Usually a short conversation on the telephone will be enough to give us a good idea of your circumstances and a fee quote. We can take it from there.

Wills And A New Way

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The government has confirmed that new legislation will enable people making Wills to have those Wills witnessed via video- link.

This might not seem all that dramatic a development to the tech-savvy among us whose lives now routinely involve Zoom, FaceTime and the like. But it is a move that significantly relaxes the rule that requires a Will to be witnessed ‘in the presence of’ at least two witnesses at the same time. Being present has usually meant being physically present – being alongside the Will-maker, in the same physical space.

There are very good reasons for having strict rules around the making and witnessing of a Will. Where people’s post-death wishes are being recorded, it is vital that everything is above board and that the risk of that person having been pressured in one way or another, or of the Will having been forged, is minimised. Having two witnesses on hand (crucially, each with a clear line of sight of the Will-maker signing the Will) is one really important aspect of this, without which the Will will not be valid.

But COVID-19 has put obstacles in the way of people who have wanted to make or update their Will (witnessing is required for both). While my team and I have been able to prepare Wills for clients during lockdown and beyond, getting those Wills witnessed has been challenging or impossible for people who have been isolating or shielding. Some have been happy to have their Wills witnessed through a closed window or an open door, but many have held off from this final, crucial, part of the process.

Recognising this difficulty, the government has now said that Wills made between 31 January 2020 and 31 January 2022 will be considered valid (assuming everything else about them and their making is in line with the law) if they have been properly witnessed via video-link. While the type of video-conferencing used doesn’t seem to matter, the link must be ‘live’; the witnesses must actually see the Will being signed, as opposed to witnessing a recording of the signature.  And, as always, there must be a clear line of sight – something that all involved must be careful to ensure at the time.

This will be welcomed by all those who have been wanting to make or update their Will to reflect their current circumstances, but who feared having to come into contact with witnesses in order to do so. It is something that I also think is a hugely helpful move, in that it will hopefully encourage people to plan for the future by further removing obstacles to making a Will. We all know that many people put this off, and I firmly believe the easier we can make the process, the better.

That is of course with the proviso that the right protections against fraud and undue influence remain very much at the heart of this. There must be confidence in the system, and those making Wills need to be assured not only that their wishes will be carried through but also that those wishes will be those they genuinely hold (something that family members will be keen to ensure, too).

The proper and lawful witnessing of Wills is one part of this. And while people who are able to have their Wills witnessed in the conventional way are encouraged to do so, this new option of video-linking should have some really positive effects on those who would otherwise struggle to finalise their Wills at this time, and on the futures of their loved ones.

For help with preparing your Will, or for advice about any aspect of Wills and Probate, contact us 0808 256 2917 or email [email protected].

Let’s Talk About Death

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It is one of life’s inevitabilities. But death has always been an uncomfortable subject for most people.

That is the case even though there is a general recognition that it’s something we should all prepare for, especially while we’re still physically and mentally able to. With some good preparation, financial and other personal affairs can be organised in such a way that our loved ones not only stand to benefit in the right ways, but that the practicalities are made far easier to deal with.

Imagine if you were to die tomorrow; would your partner know where to find details of your insurance policies? Would he or she be able to access your online accounts and cancel your direct debits? Might they face a barrage of claims from people you owe money to?

These are not pleasant thoughts. But the good news is that you have time now to do something about the loose ends, the piles of paperwork you haven’t filed away, the legal arrangements that will safeguard the financial futures of those you care about.

But if you were to start your preparation today, where should you begin? Also, where should you stop? The range of things that could (and should) be done is huge. My advice is to focus on these things first:

Your Will

Making a Will is the obvious first step to take if you want to make sure your family and friends benefit from the assets you have built up over your lifetime. Conversely, you may decide to leave some or all of your estate to a charity or to someone outside your close circle. A Will allows you to do those things.

If you die without having made a Will, the laws of intestacy apply. These can lead to outcomes you might not have chosen. Unmarried partners are particularly vulnerable because the intestacy rules do not recognise their perceived rights to a share of the family home or to other parts of the estate owned by the deceased. This means that the surviving partner, even if they had lived with the deceased as ‘common law’  husband, wife or civil partner, is not entitled to inherit under the intestacy rules.

Children may also be left in a weak position. If there is a surviving partner who was married or in a civil partnership with the deceased, children will only inherit if the estate is worth more than £250,000. In some situations, those who stand to benefit from the estate will agree to change the apportionments so that those left out may inherit something. However, that is not a foolproof option. Nor should you count on the goodwill of those standing to benefit under the intestacy rules.

Setting out your wishes in writing removes much of the uncertainty and potential angst caused by relying on the law to determine who should get what. If there’s one thing you decide to do this week, make a Will. If you already have a Will, revisit it and make sure it’s still relevant. Has there been a family rift or death that should be reflected? Has there been a significant change in income or assets? Have new children or grandchildren come along?

Lasting Power of Attorney (LPA)

An LPA is a legal document that appoints someone to make decisions about your health and welfare and property and finances on your behalf. It only comes into play if you lose the ability to make those decisions for yourself, perhaps because of an accident or mental illness.

LPAs can only be made while a person still has mental capacity, and they are not just for older people. In fact, we encourage all clients (of all ages and stages in life) who come to us to consider making one of these. If nothing else, it provides peace of mind – an insurance policy – that their future will be in safe hands should they become unable to take care of some of the important things in life.

 Tax planning

There are all sorts of ways in which estates can be structured so that beneficiaries stand to get maximum benefit from them.

Inheritance tax has long come between people and the full value of their inherited property, possessions and other assets. With some careful planning, and through mechanisms including trusts, gifts, and the use of tax-free allowances, your estate can be in the best possible shape to be passed onto loved ones.

Debts

Debts do not die with their owner. While a surviving spouse will usually have an idea of the amount of money owed (and will in many cases jointly own that debt), it is not unusual for there to be a surprise or two resulting from a played down credit card liability or overdraft.

One of the big problems is that debts have to be paid before beneficiaries. In some situations, this leads to loved ones missing out completely because there is not enough left in the estate for them.

While it may be unrealistic to clear all debts, it is worth looking for ways of consolidating or otherwise arranging debts to improve the position of your beneficiaries.

Your personal documents

Tell your partner, or someone else close to you, where to find important documents like your Will, your LPA, investment certificates, insurance policies.

 Online

Don’t forget about your digital assets. These are things you store online, from your emails to your photos, your Facebook posts, to your Amazon subscription. Where your digital assets hold particular sentimental value – family pictures, for example – you may want to think about downloading and storing them safely. Others may have more tangible value, and should be taken into account as part of your estate.

At the very least, start making a list of your online accounts so that others will be able to see the extent of your digital assets.

If there is one thing our clients have in common, it’s a shared sense of relief that comes from making plans. The first thing many tell is that they have been putting this off; some because they had felt uninformed, others because they had preferred not to address their minds to it. Start the conversation. It’s the first step towards shoring up your family’s future.

Contact us to discuss any aspect of Wills, LPAs or estate planning, contact us 0808 256 2917 or email [email protected].

Wills as a Benefit in Kind

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How all employers, company directors and HR executives can make good use of benefits in kind with our Wills Service

It’s widely acknowledged that the successful companies of the future will be those that can attract and retain the best people. That means offering more than just a competitive salary and statutory pension contributions.

The Chartered Institute of Personnel and Development estimates the direct costs alone of replacing a professional or manager to be around £8,000. But even losing junior employees means disruption, delay and expense. That’s why sophisticated companies are always looking for new benefits to help them reward – and retain – their people.

Thomas Mansfield is offering a new service that can help companies increase loyalty and provide a genuine benefit to their staff – our unique benefit in kind ‘Wills Service’.

Benefits to Employers and their Employees

 Currently 60% of the population hasn’t written a will, and over 1,000 people die intestate (i.e. without a will) every day. This can be costly. It risks leaving assets to the wrong people and lumbering loved ones with an excessive tax bill. Bereaved families are regularly forced to sell the family home because someone failed to write a proper will.

But no one wants to think about making a will. They worry about the expense and put it off. Most people would much rather have it taken care of for them.

And with the corona virus at large, now is good time to ensure your, and your employees’ affairs are taken care of.

As an employer the benefits are obvious:

  • You offer employees a valuable service, something that most people know they should do but many put off.
  • You show care for your employees at an extraordinary time, and when they might feel isolated because of remote working and/or social distancing.
  • You ensure that your employees’ welfare is safeguarded, as is that of their families.
  • You show them that you’re a responsible employer, concerned about their current and future needs. Our experience suggests that employees react well to this.
  • Employees appreciate the knowledge that they have protected their families and friends, and haven’t risked their hard-earned assets going to relatives they dislike or to the government.
  • We can offer this service at a significant discount from our normal fees.
  • VAT registered employers can reclaim our VAT charges which reduces the cost further.

In a world of gimmicks, our Wills Service stands out as something genuinely solid and valuable.

How it works

You, as the employer, instruct Thomas Mansfield. We offer your employees a Wills Service which may or may not (at your choice) extend to spouses, civil partners and partners of your employees.

We provide a presentation on the process and procedure for you to distribute amongst your employees. This also includes information on what they need to consider prior to taking up the scheme. Employees wishing to take up the scheme will then complete a short data collecting survey provided by us in readiness for one of our lawyers to have a video call to take any more detailed instructions required, and to discuss things in person.

The next stage is to draft the will, and, if all is well, a final version is prepared for signing.

All this is done for a fixed fee per will, which is significantly reduced from our standard prices. Employers can decide to offer a full service for senior employees, or contribute a set amount to cover a straightforward will, with employees paying the balance if their will is more complex or if inheritance tax advice is required.

Depending on your approach, the employer might also contribute to the cost if they want additional wills for other family members. If this is beyond the scope of what you, as an employer, envisage, then your employees can cover the additional cost, which is often minimal as many people opt for “mirror wills”.

This isn’t a ‘supermarket law’ approach – it’s a tailored, personal service, less prone to errors and more likely to have a really positive impact on an individual’s affairs. We can also tailor it to your company’s needs and requirements, so if you want to customise anything you see here, then of course we should talk.

If you’d like more information on our unique Wills Service and what it could do for your company, or on any other aspects of benefits in kind, please contact us 0808 256 2917 or email [email protected].

Let’s Talk About Death

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It is one of life’s inevitabilities. But death has always been an uncomfortable subject for most people.

That is the case even though there is a general recognition that it’s something we should all prepare for, especially while we’re still physically and mentally able to. With some good preparation, financial and other personal affairs can be organised in such a way that our loved ones not only stand to benefit in the right ways, but that the practicalities are made far easier to deal with.

Imagine if you were to die tomorrow; would your partner know where to find details of your insurance policies? Would he or she be able to access your online accounts and cancel your direct debits? Might they face a barrage of claims from people you owe money to?

These are not pleasant thoughts. But the good news is that you have time now to do something about the loose ends, the piles of paperwork you haven’t filed away, the legal arrangements that will safeguard the financial futures of those you care about.

But if you were to start your preparation today, where should you begin? Also, where should you stop? The range of things that could (and should) be done is huge. My advice is to focus on these things first:

Your Will

Making a Will is the obvious first step to take if you want to make sure your family and friends benefit from the assets you have built up over your lifetime. Conversely, you may decide to leave some or all of your estate to a charity or to someone outside your close circle. A Will allows you to do those things.

If you die without having made a Will, the laws of intestacy apply. These can lead to outcomes you might not have chosen. Unmarried partners are particularly vulnerable because the intestacy rules do not recognise their perceived rights to a share of the family home or to other parts of the estate owned by the deceased. This means that the surviving partner, even if they had lived with the deceased as ‘common law’  husband, wife or civil partner, is not entitled to inherit under the intestacy rules.

Children may also be left in a weak position. If there is a surviving partner who was married or in a civil partnership with the deceased, children will only inherit if the estate is worth more than £250,000. In some situations, those who stand to benefit from the estate will agree to change the apportionments so that those left out may inherit something. However, that is not a foolproof option. Nor should you count on the goodwill of those standing to benefit under the intestacy rules.

Setting out your wishes in writing removes much of the uncertainty and potential angst caused by relying on the law to determine who should get what. If there’s one thing you decide to do this week, make a Will. If you already have a Will, revisit it and make sure it’s still relevant. Has there been a family rift or death that should be reflected? Has there been a significant change in income or assets? Have new children or grandchildren come along?

Lasting Power of Attorney (LPA)

An LPA is a legal document that appoints someone to make decisions about your health and welfare and property and finances on your behalf. It only comes into play if you lose the ability to make those decisions for yourself, perhaps because of an accident or mental illness.

LPAs can only be made while a person still has mental capacity, and they are not just for older people. In fact, we encourage all clients (of all ages and stages in life) who come to us to consider making one of these. If nothing else, it provides peace of mind – an insurance policy – that their future will be in safe hands should they become unable to take care of some of the important things in life.

 Tax planning

There are all sorts of ways in which estates can be structured so that beneficiaries stand to get maximum benefit from them.

Inheritance tax has long come between people and the full value of their inherited property, possessions and other assets. With some careful planning, and through mechanisms including trusts, gifts, and the use of tax-free allowances, your estate can be in the best possible shape to be passed onto loved ones.

Debts

Debts do not die with their owner. While a surviving spouse will usually have an idea of the amount of money owed (and will in many cases jointly own that debt), it is not unusual for there to be a surprise or two resulting from a played down credit card liability or overdraft.

One of the big problems is that debts have to be paid before beneficiaries. In some situations, this leads to loved ones missing out completely because there is not enough left in the estate for them.

While it may be unrealistic to clear all debts, it is worth looking for ways of consolidating or otherwise arranging debts to improve the position of your beneficiaries.

Your personal documents

Tell your partner, or someone else close to you, where to find important documents like your Will, your LPA, investment certificates, insurance policies.

 Online

Don’t forget about your digital assets. These are things you store online, from your emails to your photos, your Facebook posts, to your Amazon subscription. Where your digital assets hold particular sentimental value – family pictures, for example – you may want to think about downloading and storing them safely. Others may have more tangible value, and should be taken into account as part of your estate.

At the very least, start making a list of your online accounts so that others will be able to see the extent of your digital assets.

If there is one thing our clients have in common, it’s a shared sense of relief that comes from making plans. The first thing many tell is that they have been putting this off; some because they had felt uninformed, others because they had preferred not to address their minds to it. Start the conversation. It’s the first step towards shoring up your family’s future.

Do you know that 11-17 May 2020 is Dying Matters Awareness Week? The theme is ‘Dying to be heard’, focusing on how to help by listening. The aim is to show how important it is to talk about dying, death and bereavement.

Contact us to discuss any aspect of Wills, LPAs or estate planning 0808 256 2917 or email [email protected].

 

 

Guidance for Coronavirus: Legal preparation

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Will a normal Power of Attorney be sufficient if I have to go into hospital?

The coronavirus pandemic has made many people consider what legal steps they might need to take in the event they end up in self-isolation unable to sign documents, or are required to go into hospital, either on a ventilator in intensive care or ending up in a coma.

If you are hospitalised as a result of the coronavirus (or for that matter, any reason), there are a few simple steps that can be taken to safeguard your own interests and those of your family.

Powers of Attorney enable your attorneys to make decisions on your behalf if you cannot.

They are usually used in cases where an individual loses mental capacity but because a person can lose capacity and regain capacity, they are particularly useful while in hospital where there are many situations that could cause a person to be temporarily without capacity such as an induced coma.

There are a few different types of Power of Attorney and you need to consider, which would be the most suitable in accordance with your own circumstances.

Lasting Powers of Attorney (LPAs) give you, as the donor, the choice of attorney to make decisions on your behalf if you can’t.

An attorney could be a close friend or family member who you would trust to make decisions on your behalf or someone independent such as a solicitor. Typically, you would appoint two attorneys, but you could have more. The authority could be for them to make decisions together or some decisions individually.

Health and Welfare LPAs

If you were in hospital, a Health and Welfare LPA allows attorneys to make decisions about your medical care including life-sustaining medical treatment in addition to the more regular decisions such as your daily routine such as washing, dressing and eating. In the absence of an LPA, such decisions could be made by the NHS, which may disadvantage your family and friends, for example if the NHS wanted to move you to a different hospital several miles from where you live. Attorneys are also able to make decisions about whether you should be sent to a particular nursing home.

If you are worried about losing mental capacity through illness or traumatic illness, then a Health and Welfare LPA is essential for your loved ones to be able to make decisions on your behalf. These decisions include medical decisions and can also include life-ending decisions such as stopping medication or turning off life support machines. Sometimes they therefore are decisions doctors cannot make or would not know your preference as well as someone who knows you well.

Property and Affairs LPAs

A Property and Affairs LPA allows your attorney to make decisions about your personal finances and affairs even if you have not lost capacity but are simply unable to look after your own finances or affairs, for example while in hospital. They allow attorneys to transfer cash between your bank accounts to enable the payment of regular outgoings, which they can also effect on your behalf.

Business LPAs

If you own or run a business you may need a Business LPA with the attorney being a co-owner, which is really like a Property and Affairs LPA drafted with your business needs in mind, with different attorneys who are more able to look after your business affairs than your friends and family.

Court of Protection

If you cannot make decisions for any of the reasons set out above, and have not made an LPA, an application to the Court of Protection to make decisions on your behalf or determine practical solutions may well be required. This process is expensive, takes at least six months to instigate and the Court may appoint someone who you would not have chosen.

It is therefore advisable to put in place LPAs while you are able, and before any emergencies when your family or friends will need them to help you.

Wills

Of course, no matter what stage of your adult life you are at, it always makes sense to have a Will. A Will enables you to leave your estate to the people you choose such as family and friends. In the absence of a Will, your estate is divided in accordance with the law of intestate, which means that the people you love most could miss out completely. In addition, a properly drafted Will can save the beneficiaries paying inheritance tax on your estate and save them thousands of pounds which might otherwise just be paid to the state in tax.

Why Make a Will?

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Prince. Aretha Franklin. Jimi Hendrix. Just some of the major celebrities who are said to have died without having made a Will.

It goes to show that Wills are still not seen as an essential part of personal planning. They are not mandatory. You don’t have to have one. But they really can affect the way in which your estate (the things you own) will be dealt with after your death.

When a person dies without having made a Will, they will have ‘died intestate’ and the rules of intestacy apply. It is significantly different to a situation in which a Will has been made.

Whereas a Will appoints a particular person or a number of people to be the executor(s) to carry out the terms of the Will, no such certainty exists in an intestacy situation. This means that it is up to a person – usually a family member – to come forward and be prepared to take responsibility for dealing with the deceased’s estate. They must apply to the court for a ‘Grant of Letters of Administration’ in order to be able to do that. However, before making that application they must have established some important things about the estate. These include:

  • the value of the deceased’s assets, including property and shares;
  • the deceased’s debts;
  • any gifts the deceased made in the seven years leading up to their death; the value of those gifts; and whether they could attract Inheritance Tax.

That is often a laborious task, not least because the information is unlikely to be found in one place. Where someone has prepared a Will, there is a chance that they will also have made some attempt to organise their affairs. They might have created files of relevant documents, for instance. Someone who hasn’t prepared a Will is less likely to have addressed their minds to the things that will need to happen after their death. And this presents administrators with a very real challenge. They may be starting from scratch – having to dig around, ask questions, trace people and accounts, scrutinise documents. It can all take up a great deal of time, and doesn’t always result in firm answers about the extent of the estate. But it has to be done.

That is one significant aspect of intestacy. Another is to do with the way in which the estate is distributed. It is often assumed that loved ones will inherit even if a Will is not in place. That is not a safe bet. Where a person dies intestate, the law (the rules of intestacy) specifies who should receive what.

If the deceased’s estate is worth less than £250,000, everything passes to that person’s husband, wife or civil partner – even if they had separated or were going through a divorce or dissolution. Children do not stand to benefit straightaway unless the estate is worth more than £250,000, in which case the children will share the amount over £250,000 equally with the deceased’s husband, wife or civil partner. So, if the estate were worth £750,000, the children would get a share of £500,000.

Unmarried couples, or those that are not in a civil partnership, are particularly vulnerable. When a partner dies, the other is not entitled in law to anything, possibly with the exception of some jointly owned possessions. Blood relatives come first, regardless of how long the partners had been together or the strength and outward appearance of their relationship.  Living ‘as common-law husband and wife’, for example, doesn’t cut it.

These situations can cause problems within families. They can cause rifts, and even lead to legal proceedings where a person who was dependent on the deceased claims that they have not been properly provided for. While that type of action is sometimes vital, it can take its toll on relationships, particularly if it is not managed well.

That’s why we always encourage people to make a Will. A Will places the person making it in control, removing many of the challenges that could otherwise face loved ones in an intestacy situation. It allows you to choose beneficiaries, as opposed to the law determining who should benefit from the things you worked hard to accumulate. It could also mean that beneficiaries stand to gain more; as part of the process, your solicitor will help you structure your estate tax-efficiently.  And when all plans are in place, you’ll have peace of mind that the job of distributing your estate should be relatively straightforward – and that the ‘right’ people are properly provided for.

If you are looking for a New Year’s resolution, perhaps making your Will should be it.

For advice about any aspect of Wills and estate administration, contact us 0808 256 2917 or email [email protected].

 

 

 

A Change In The Law To Help Families of Missing People

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This summer saw the introduction of ‘Claudia’s Law’.

Named after Claudia Lawrence who went missing in York in 2009, the much campaigned for new legislation has been hailed as hugely significant for those coping with the disappearance of a loved one.

The emotional distress that families suffer has long been aggravated by difficulties in dealing with some of the practicalities. A missing person’s affairs are treated by banks and utility companies, for example, as strictly personal to him or her. Access has been denied to anyone not named on a policy or account, regardless of the situation. So husbands, wives, parents, children have been unable to take over the handling of the missing person’s mortgage, their gas bills, their mobile phone account.

We have advised many people in that position, and we’ve seen just how difficult it has been for normal affairs to be taken care of. In one sense, that is as it should be; organisations have serious data protection responsibilities. But it has created a situation that has proved immensely frustrating – often traumatic – for those trying to cope when a family member has disappeared.

Claudia’s Law (or, to give it its full title, The Guardianship (Missing Persons) Act 2017) addresses that problem head-on. It introduces the idea of a ‘guardian’ – someone who is authorised to exercise certain powers in the best interests of a missing person. These include paying debts, cancelling direct debits, and selling their property. It’s essentially managing that person’s interests and financial affairs on their behalf.

Pre-Claudia’s Law, that could only happen if the missing person had been declared deceased. Without proof that they had died (a situation in which many families of missing people find themselves) a declaration of presumed death could only be applied for once the person had been missing for seven years. That was a significant period of limbo, which only served to heighten the stresses and strains on family members.

Under the new law, however, a guardianship order can be applied for once a person has been missing for 90 days. Becoming a guardian enables someone to take over the management of the missing person’s affairs without having to have established that they have died.

‘Missing’ for these purposes means that the person is not at their home, and he or she is not doing the usual day-to-day things (going to work, for example). Also, either it hasn’t been possible to make contact with them because it is not known where they are, or the person can’t (for reasons that are beyond their control, but not because of mental incapacity, illness or inury) make or communicate decisions about their own financial affairs. Interestingly, that latter scenario covers people who are in prison, even though they might not ordinarily be considered to be ‘missing’.

More than one person aged 18 or over can be an appointed guardian, and for a term of up to four years. And there are controls in place to make sure that guardians carry out their duties properly and that they exercise reasonable care and skill; the Office of the Public Guardian oversees guardians’ activities, as well as imposing specific duties and restrictions on what they do.

Support is at hand, too, from lawyers like us who are here to advise guardians, helping them take the right steps and make the right decisions.

Since Claudia’s Law came into force on 31 July this year, we have already seen a positive impact on families that are in the midst of incredibly difficult personal situations. Knowing that there is a clear process available to them that will at least ease the administrative burdens can be hugely comforting. It takes away some of the pressures. And it enables those close to the missing person to put in place arrangements that keep affairs in order – something that could prove vital, particularly if the best should happen and their missing loved one returns.

To find out more about application of Claudia’s Law, and the support we can offer families of missing persons, contact us 0808 256 2917 or email [email protected].

Why it might be worth looking into a mirror Will

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For many couples, drawing up a Will is a joint process. They will often go together to see their solicitor and will discuss the terms they’d like to formalise.

While a Will is an individual document, it’s down to each person to set out their wishes (and that autonomy is really important), two people in a relationship, marriage or civil partnership will often have a lot in common when it comes to their intended distribution of their estates. In many of these cases, our instructions will be to structure the two Wills to simply leave everything to the surviving partner and then to the couple’s children on the surviving partner’s death. Of course, other provisions – for example, funeral details – can be made alongside this.

Where two Wills are so similar that they virtually replicate each other, they’re known as mirror Wills. You don’t have to be in a couple to make them; it’s an option open to friends or brothers/sisters, for example. However, they are most commonly used by husbands, wives, cohabitees and civil partners.

Aside from the administrative ease in putting in place mirror Wills, there are some distinct advantages to structuring personal arrangements in this way. The first is that, as with any Will, it will allow you to provide for a partner to whom you’re not married or in a civil partnership with. Without a Will, the rules of intestacy would likely preclude them from inheriting from your estate.

But one of the most significant aspects of mirror Wills in particular is the potential for avoiding inheritance tax. Married couples and those in a civil partnership will be able to take advantage of the rule that allows the tax-free transfer of assets between spouses. The survivor will also inherit the deceased’s personal inheritance tax allowance and, once the survivor dies, his/her allowance can be added to that so that the couple’s children – who usually stand to benefit next – could take advantage of the combined tax allowance of their parents. It means that more (up to £650,000, tax-free) can be passed on to the next generation. Some couples will also benefit from a main residence nil-rate band of £150,000 (£175,000 from 6 April 2020) per person.

Mirror Wills are not without their potential drawbacks, however. One of these is the relative ease with which they may be changed. As each partner retains control of their individual Will, there is scope for them to instruct their solicitor to amend it – and their partner could be oblivious to that. While we encourage clients to keep all types of Wills under review and to update them to reflect changed family circumstances or significant acquisitions or disposals, those who make mirror Wills tend to enter into the process with an expectation that it’s all about togetherness. Discovering that your partner had changed their Will can be devastating.

Similarly, where the surviving partner goes on to form a new relationship, it is perfectly possible that they would change their Will so as to leave their (your) estate to that new partner. It means that your children, who had stood to benefit by virtue of your mirror Wills having provided for them in the event of the surviving partner’s death, are disinherited. It’s a situation that can cause huge problems within families.

One way of avoiding that is to instead create mutual Wills. In the same way as mirror Wills, they set out virtually identical terms, but they are less easily changed. Both parties must, in theory at least, agree to the Will being amended, so there is little opportunity for a nasty surprise. And once one spouse dies, the Will cannot be changed at all. It remains firmly in place, even if the survivor remarries. And so, while this gives couples greater certainty during their lifetimes, it does mean that both parties need to make absolutely certain that the terms they’re putting in place are the right ones.

A trust in a Will is probably the best way of doing this and is the only means of ensuring absolute certainty over your assets. Please ask your solicitor for further information about Will trusts as they can be very complex.

Getting good legal financial planning advice has to be the starting point. There are actually many, many options when it comes to structuring arrangements for the future, and specialist Wills, trusts and probate solicitors like us will help you find the right one for you. Because making sure that your future, and that of your loved ones, is financially secure can mean you’re better able to enjoy the here and now. It’s peace of mind that comes from making the best decisions and understanding exactly how your family stands to benefit from the wealth and other assets you’ve worked hard to accumulate.

CALL US TODAY

For advice about any aspect of Wills, trusts, probate or estates, Call us now on 0808 256 2917 for a confidential and no obligation initial discussion or email [email protected].

Contesting a Will

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A Will records a person’s final wishes. It sets out what they would like to happen to the things they own once they have died. And, being a formal legal document, it should be put into effect when the time comes. After all, if a Will-maker cannot count on terms being carried out, why make a Will at all?

That general position can have some unexpected consequences. As Wills are usually a private matter between a person and their solicitor, family members are often in the dark about their inheritance until the Will is read. By then, of course, it is too late to raise any issues with their relative. It can leave families that have been taken by surprise by the terms of a Will perplexed – and in some cases, in turmoil.

As Wills and Probate solicitors, we have advised on plenty of difficult Wills-related issues, from a family-member having been left less than they had anticipated, to situations in which a deceased’s assets have been earmarked for a seemingly random party (yes, people really do leave everything to cats’ homes). While some relatives will accept the outcome on the basis that it was what their loved one wanted, others may be more inclined to dispute the terms. Perhaps that’s on the basis of perceived injustice. Or maybe they suspect that something untoward has gone on.

It is perfectly possible for the terms of a Will to be changed retrospectively, as a result of a legal challenge. However, as you would expect, there are strict limitations on when and by whom such a challenge may be brought.

Only certain categories of people can contest a Will: a blood relative; a spouse; someone who was financially dependent on the deceased; a beneficiary under an earlier Will; a creditor of the deceased’s estate; or a person who had been promised something by the deceased.

Entitlement is the first hurdle. The second is showing a proper legal basis for challenging a Will. A disgruntled relative cannot simply complain that they don’t like the way that assets look set to be distributed. They would need to point to one of the following grounds:

  1. Invalidity

The Will was not prepared correctly. For example, it was not properly witnessed or signed.

  1. Lack of capacity

The deceased did not know what they were signing, or didn’t understand the terms or effect of their Will. A common line of argument is be that he or she was not of sound mind – perhaps suffering from a mental condition – when they made the Will.

  1. Undue influence

The deceased was pressured or coerced.

  1. Forgery or fraudulence

It is not unknown for an entirely made-up Will to have been constructed, or for the deceased’s signature to have been forged.

  1. Negligence

The deceased’s lawyer was at fault in preparing a Will that does not accurately, clearly and unambiguously set out the deceased’s wishes. It is also possible to bring a claim for rectification of a Will where the problem was caused by a clerical error.

In addition to those grounds for challenge, an eligible person who feels that the Will does not make reasonable financial provision for them may be able to bring an inheritance claim. They may feel aggrieved that they have been left out of the Will entirely, or that they have not been left enough money/assets to live on.

Those types of inheritance claim are typically brought by husbands, wives, civil partners, and children. However, it’s an avenue also open to:

  • a former spouse or civil partner who has not married or entered into a civil partnership since the deceased died;
  • a person who lived with the deceased as a spouse or civil partner for at least two years before his or her death;
  • a child who is not a blood relative of the deceased (a adopted child or step-child, for example);
  • a person ‘maintained’ by the deceased.

Our advice to anyone who feels uneasy about a loved one’s Will is to explore the possibility that something went wrong along the way. Talking to specialist Wills and Probate lawyers like us does not commit you to taking any formal legal steps to challenge the Will. In fact, we only ever suggest bringing a claim where that is the only route to resolution (and in many cases it’s not necessary).

The important point to remember is that whether you are worried that a Will does not reflect your deceased relative’s wishes, or you feel that you have not been adequately provided for, you do not necessarily have to accept that position. There may be things you can do – collectively or individually. And, as part of making a successful outcome our priority, lawyers like us handle cases sensitively so as to help preserve those important family relationships.

Strict time limits apply to Will dispute claims, so get advice as soon as you can.

 

Call us now on 0808 1961512 for a confidential and no obligation initial discussion or email [email protected].