Monthly Archives: July 2019

Legal Power of Attorney

Why a Lasting Power of Attorney is preferable to a Deputyship Order…

A Lasting Power of Attorney (LPA) allows you to appoint an attorney to deal with your affairs once you are no longer capable of doing so yourself. If you do not have an LPA, then your family will have to apply for a Deputyship Order to allow someone to help you.

There are two types of LPA: one for dealing with your property and financial affairs and one for your health and welfare.

You can choose a different attorney for each LPA if you wish, and the document will not come into effect until it is registered, allowing you to execute it well before it is needed.

If you don’t have an LPA

If you become unable to manage your affairs and you have not executed an LPA, then your family will need to apply to the Court of Protection for a Deputyship Order to appoint a deputy to act on your behalf.

This application can take several months to process and will need supporting evidence, such as a medical assessment.

It is also an expensive procedure, with court application and hearing fees of several hundred pounds each, medical assessment fees and, if a professional deputy is appointed, their ongoing charges. There will also be legal expenses if your family need help navigating the process.

In contrast, the cost of executing an LPA is relatively low, and the registration fee is currently £82.

Why an LPA is the best solution

As well as being a difficult, expensive and time-consuming process to appoint a deputy, it can mean that for a time no-one is able to help you with your affairs.

If you have become unable to deal with them yourself, there may be several months when your finances cannot be managed. This can be a big strain on those trying to help you, particularly if bills need to be paid or services ordered.

With regard to your health and welfare, the Court of Protection prefers not to appoint a deputy to act in respect of all of an individual’s health and welfare needs. The court will rule on single issues if agreement cannot be reached, but generally a collaborative approach is preferred, with family and healthcare professionals acting together.

Therefore if you want to choose someone to act for you in health and welfare matters, you should execute an LPA in their favour. It will not be used until and unless you become unable to make your own decisions.

If you plan in advance and execute LPAs, you also have the option of appointing more than one attorney and including back-ups in case they are unable to take on the role. You can talk things through in advance with them and explain what you would like them to do for you.

To speak to one of our expert solicitors, call legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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Funeral arrangements

Who has the legal right to organise a funeral?

A funeral is usually arranged by close family members of the deceased, but what happens if they disagree, or if someone else has the legal right to arrange the funeral?

If the deceased has left a valid Will, then the named Executors have the right to organise the funeral and either a burial or cremation. If there is no valid Will, then the Rules of Intestacy govern the appointment of an Administrator to deal with the deceased’s affairs, including funeral arrangements.

An Administrator will always be a family member, but it is possible that an Executor won’t be, for example if the deceased appointed a friend.

In that case, the Executor can choose to step aside and let the family arrange the funeral that they want.

When disagreements arise

If the Executor has different wishes to the family and a dispute arises, it is the Executor who has the right to make the arrangements.

If people have differing views on what should happen, it can be very upsetting at a time that is already difficult. The best way to proceed is to keep communicating and compromise if you can, to try as far as possible to avoid conflict.

If the parties involved cannot agree on funeral arrangements, then an application can be made to the Court, who may decide in favour of the legally appointed Executor or Administrator provided they have acted reasonably.

Where the disagreement is between two or more appointees, the Court will decide the matter on the facts. If the deceased has expressed any wishes in the Will, these are taken into account, although these wishes are not in themselves legally binding.

The importance of leaving a Will

Leaving a valid Will that includes an expression of funeral and burial or cremation wishes may help to avoid expensive and upsetting disagreements after death.

It is possible to request a professional Executor in a Will, such as a solicitor, who will act in accordance with the deceased’s wishes as far as possible. This can also help to avoid disagreement between relatives.

If an unmarried person dies without making a valid Will, then their partner can be left with no say in the funeral decisions as well as receiving nothing from the deceased’s estate, as the Rules of Intestacy do not include those not directly related.

A Will can be a record of what the deceased wants to happen after their death, as well as ensuring that their estate is distributed to chosen family and friends.

To speak to one of our expert probate solicitors, call legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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Inheritance Tax planning

What is the transferable nil rate band in Inheritance Tax and how can you claim it?

When someone dies, the first £325,000 of their estate is exempt from Inheritance Tax (IHT). If they don’t use all of this allowance, it can be transferred to their spouse’s or civil partner’s estate in due course. This is known as the transferable nil rate band.

This increases the exempt amount for the partner’s estate when they die, meaning they could have a potential IHT threshold of up to £650,000.

The relevant dates

The transfer of the nil rate band can be applied for if the remaining spouse or civil partner died on or after 9 October 2007.

In respect of civil partnerships, the transferable nil rate band can be claimed only if the first partner died on or after 5 December 2005, the date that the Civil Partnership Act became law.

How much nil rate band is transferable?

Where the first spouse or partner to die leaves all of their assets to the remaining spouse or civil partner, no IHT is payable, so the entire £325,000 can be passed to the remaining spouse, subject to the deduction of any non-exempt gifts made during the previous seven years.

How to apply to transfer the nil rate band

Two forms need to be sent to HM Revenue & Customs (HMRC). The first is the standard IHT form, while the second is the application to transfer the unused allowance. There are two options for this second form.

Form IHT217 Claim to Transfer Unused Nil Rate Bank for Excepted Estates

This form should be used when the estate of the first person to die is an excepted estate, ie. IHT was not payable, for example where the estate is worth less than £325,000 or where the assets are left to charity.

Form IHT402 Claim to Transfer Unused Nil Rate Band

Where some of the £325,000 IHT allowance was used by the estate of the first spouse to die, then only the remaining balance can be transferred to benefit the second estate. Other financial information will need to be included on the form, for example gifts made within the last seven years and pension details.

Both forms need to be signed by the estate Executor or Administrator and sent to HMRC together with the main IHT form, IHT400.

A probate lawyer will be able to work out the correct figures to be included on the form, which isn’t always straightforward, for example in the case of disposal of cash or assets by the deceased prior to their death or where gifts are made to charities, which could potentially reduce IHT liability.

To speak to one of our probate specialists, call legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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Starting a family

Why you should make a Will when you start a family…

When you’re expecting a baby there’s a long list of things to do to get ready. Making a Will isn’t usually at the top of the list, and for many people it isn’t even something they think about at all. But in reality, it’s an important job that could seriously impact your family’s future.

Nobody wants to think about a situation in which children lose their parents, but covering every eventuality means that once you have children you can relax and enjoy life safe in the knowledge that you have drawn up plans for their future care should the worst happen.

When parents don’t make a Will

If anything happens to you and you haven’t made a Will, then those left behind will not necessarily know what your wishes were with regard to your children’s upbringing.

The authorities will have the right to place your children with the guardian they decide upon, and there could be a delay in finalising this, which could be even more unsettling for all involved.

Failing to plan and talk things over with family members could also cause disagreement between them.

As far as financial provision is concerned, this will be governed by the Rules of Intestacy, and you will have lost the opportunity to appoint your choice of trustees to look after the money you leave and decide how it should best be spent.

Writing your Will when you’re a parent

Writing a Will allows you to clearly set out who you would like to care for your children should you die. You can also make financial provision for your children, choosing the age at which you would like them to inherit any money you leave them. For example, you may decide that you don’t want them to be given a large sum of money at 18, and that you would prefer them to inherit it when they are older and more settled in life.

You will appoint trustees to administer the money until that time and leave instructions for how they can use it for your children as they grow up, for example a private education or money towards the purchase of a home.

The trustees will also be able to pay money to your children’s guardian, for everyday expenditure such as food, clothing and school expenses.

Appointing trustees

Choose people whom you trust implicitly and whom you believe are capable of carrying out your wishes as well as looking after the money that you leave. This fund will eventually be inherited by your children so it is important that it is properly managed.

If you would like to talk to one of our expert wills and trusts lawyers, call legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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Client Testimonial

Client Testimonial…

When you lose someone you love it is always a difficult time. Having to deal with the paperwork involved in administering an estate after a death – and when you’re grieving – can be extremely upsetting.

That’s why at legalmatters we will always try to make the process as pain-free as possible for you – and why we’re always delighted to hear from a client when we’ve helped a family or an individual through such a stressful time. So thank you Jane for your kind words.

“Thank you and Megan, and all in the office staff for making my journey – sorting my dad’s estate through yourself and legalmatters – a professional, reassuring and stress free time. It’s been a pleasure and I would highly recommend you to friends.”