A second marriage can be very complicated when it comes to making sure your family inherit exactly what you want them to have.
The first thing to know is that any previous Will you have made becomes invalid when you marry, unless it was specifically made in contemplation of the marriage.
If you and/or your new spouse have children, you both need to sit down and work out what assets you have and who you would like them to be ultimately passed on to.
If you don’t make a Will
When someone dies without making a Will, their estate passes under the Intestacy Rules, which give all personal possessions plus the first £250,000 to the spouse. Any sum over and above £250,000 will be shared, with 50% going to the spouse and 50% shared between any children.
Stepchildren are not included at all. This can mean that if your spouse inherits your estate and then dies without writing a Will, your children would not be entitled to anything.
If you do make a Will
If you make a Will leaving everything to your spouse, with the understanding that they will then leave your children your assets when they die, you have no guarantee that this will actually happen.
As time passes, they may change their mind and decide to leave their estate elsewhere, or they may fall into debt or need funds for care home costs.
The way to avoid this is to have a Will drawn up so that your spouse has a lifetime interest in your property and assets, but on their death the capital passes to your children.
What to do about your Will when you remarry
Because any previous Will becomes void on marriage, you should sit down with your new spouse and decide who you want to inherit. Its particularly important when family situations are complicated, for example with different sets of children and stepchildren, to get expert help in drawing up a Will that includes the necessary trusts.
It is also important that Wills are unambiguous to avoid disputes after someone dies. If possible, you should talk things through with any children and stepchildren so that they understand what your wishes are and what will happen to your estate after you die.
A specialist Trusts and Probate lawyer from legalmatters will be able to put your requirements into a valid Will and this should avoid any arguments arising at a later date.
If writing – or updating – your Will is one of your 2019 New Year’s Resolutions, don’t put it off. Speak to one of our expert lawyers at legalmatters on 01243 216900 or email us at email@example.com.
A recent case involving a cohabiting couple has highlighted the need for a robust Will after a man died and the judge awarded his surviving partner more than he intended.
There has been a rise in disputes between family members over inheritance. And a recent case has shown that a cohabiting partner might have a greater claim to your estate than you realise.
What happened in this case?
While the ‘common law’ husband or wife doesn’t actually exist in law, living with someone could entitle them to a substantial proportion of their deceased partner’s estate. Even if this goes against the terms of their partner’s Will.
Mr Hodge and Ms Thompson lived together for over 40 years. However, just before he died, Mr Hodge created a Will leaving nothing to his partner. In a letter he explained that he did this because he believed Ms Thompson would need to move into residential care after his death, and that she had her own finances to cover this cost.
However, Ms Thompson was unhappy with this and contested the Will. Her claim was successful as the judge found that she did not need to move into residential care and could live independently, but did not have the financial means to do so. As such, Ms Thompson was awarded a home worth £225,000, as well as a further £28,800 to pay for adaptions to the cottage, and an additional lump sum of £116,000 to help supplement her limited income.
This isn’t a one-off
In this case, the named beneficiaries will still inherit a sizeable amount as the estate was worth £1.5 million. Furthermore, the fact that Mr Hodge’s reasons for not taking care of his longstanding partner were unfounded contributed to the judge’s decision. But this is not the first time a Will has been overturned in favour of a cohabitee.
Indeed, it is possible for a ‘common law’ partner to bring a claim under the Inheritance Act after just two years of cohabitation if they rely on financial provision from the estate to carry on living the lifestyle they have become used to (however luxurious that lifestyle might be).
So, money and property can be given to someone other than the deceased’s intended beneficiaries.
The death of a loved one is a difficult time, and, where there are disputes about a Will, the stress and upset can make it even harder. As such, taking professional advice is crucial if you want to protect your Will against any potential challenge. With disagreements over money or property devastating for those left behind, and often very expensive to resolve, a properly prepared and considered Will should be a priority.
To make sure your Estate is passed on in line with your wishes, or to dispute a Will, speak to one of our expert team by calling legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
Data published by the Office for National Statistics shows that the wealth gap between generations in the UK continues to widen. The findings also show that inheritances are becoming increasingly important to younger people.
Over recent decades, rising levels of household affluence mean that the older generation has higher levels of wealth that can be left to younger family and friends. This wealth is passed on through inheritances, gifts and loans.
The latest Government report looks at how the transferal of assets impacts wealth inequality, social mobility and the intergenerational transference of advantages in the UK.
According to the findings, on average:
- Individuals with the most income and wealth were likely to receive the most substantial gifts and loans
- Those aged under 45 were the age group most likely to accept cash gifts or loans from friends and family of the value of £500 or more, and also received the highest amounts
- Those aged 55 to 64 were the most likely to receive an inheritance and also received the largest legacies
- The least wealthy and youngest individuals receive smaller estates, but they make up a much more significant proportion of their total net wealth
- Those in the middle of the wealth distribution were the most likely to receive cash gifts or loans from friends and family of the value of £500 or more.
Gifts and loans
Of 25-to-34-year-olds, 11% had received a gift or loan above £500 in the last two years. This is the age most people become first-time buyers and have children, which could suggest that older family members are keen to help support these expensive life stages. The next highest beneficiaries of gifts or loans is 25-44 year-olds (9%). So, the research could also indicate an ongoing dependence of adult children on their parents in the modern world.
When it comes to receiving an inheritance, the average age a person is likely to inherit is between 55 and 64. This is thought to be because people are living longer.
Inheritances are more likely to be received by those who already have relatively high levels of wealth. However, bequests received by those in the bottom income group were equivalent to 13% of their net wealth, while for those in the top income group inheritances were equivalent to 5% of their net wealth. So, legacies could play some role in reducing inequalities.
Knowing how people save and spend money – and understanding the impact of transfers of wealth between generations – is a crucial step in helping people reach their financial objectives.
To find out how best you can pass on your wealth, speak to one of our expert team by calling 01243 216900 or email us at email@example.com.
When you own a business, not using a professional lawyer to draw up your Will is almost always a mistake.
Failing to cover all your assets and not considering issues around inheritance tax, executors and trusts are two common mistakes made with a DIY Will. But even the smallest of mistakes could render a Will invalid – such as if it’s witnessed by the wrong people or number of people; if it’s not signed or dated in the right place.
Having a valid Will in place is essential if you want the final say in what happens to your business and other assets after you die.
If you die without a Will, or if it’s invalid, everything you own – including business and non-business assets – will be distributed under the laws of intestacy. Which means that you or your loved ones will have no say as to who inherits. To avoid your assets being dealt with under the rules of intestacy, your Will should detail what will happen to your business shares.
When you die, any shares or interest you own in a business become an asset of your estate. Without a Will, these shares could be sold, the company could be broken up, or it could run into trouble without the correct day-to-day management in place.
For example, you might know who you want to inherit your business after you die, but what happens if there’s a tragedy and these people don’t survive? A professional solicitor will know what questions to ask to make sure that your Will covers all situations.
Take a look at the package “Business Wealth Protection” which we’ve put together specifically for business owners. We will look at all eventualities and the Will we draft for you will include a trust and letter of wishes to ensure that inheritance tax is handled in the most cost-efficient way.
In some cases, you might already have a partnership agreement or company papers in place that set out what will happen to the business after you die. These types of contracts are usually put in place if more than one person owns a business and you want the company to continue after your death. You should also consider whether you need a business lasting power of attorney. We’ll help you decide what legal documents you need to draw up in order to carry out your wishes and best protect your business and your loved ones.
It is always important when drawing up a Will that it is done correctly, and for business owners this is more complex. We can help guide you through the process. Just speak to one of our expert team by calling legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
There are many reasons for having your Will drawn up by a Solicitor. Here are 5 of our top reasons.
- Top of our list, making your Will is one of the most important things you’ll ever do.
Without a Will, how will you get to say who inherits your assets? For instance, without a Will, and where there are no known heirs, your estate will be passed to the Government. This could include property, money and personal possessions. Where there are relatives, under the UK’s inheritance laws (Rules of Intestacy), people who are blood relatives could be entitled to a share of your estate. Even distant relations could be in for a windfall. And partners may not recognised if you were not married or in a civil partnership. Neither are stepchildren.
- The need for clarity
So you’ve sensibly decided to draw up your Will. But if you’re thinking of creating a handwritten Will, then think very carefully about it. There are various legal requirements for a handwritten Will (also known as a ‘holograph’ Will).
For instance, it must be signed by the Testator (the person making the Will) in the presence of two witnesses. These witnesses must also sign the Will in the presence of the Testator. Furthermore, the Testator must understand that in doing this, they are creating a Will. So it needs to be a clear and final expression of intention about where assets should go upon your death.
That’s not always as easy as it sounds…
- Mind your language
For the Will to be legal, the correct language and terminology needs to be used. What might seem obvious to you might not be evident in the eyes of the law. And if you do it yourself, you’ll not know that until it’s too late, when the Will gets read, after your death.
Which leads us on to…
- Avoiding Disputed Wills
You don’t want your Will to be disputed after you die. But there are some common instances that lead to a Will being challenged:
- Changing family structures which often include unmarried couples living together and second families
- An ageing population and the increased risk of mental health and dementia
- Rising property values resulting in a growing number of estates worth contesting
- An increase in the number of people leaving money to charities.
A Will can be overruled following a challenge. Whether it is or it is not overturned, such disagreements about inheritance are usually devastating for those left behind, and often very expensive to resolve.
A carefully drafted Will would avoid this heartache…
- And finally, that most hated penalty, Inheritance tax
When you make a Will you’ll want to make sure that your beneficiaries don’t pay any more Inheritance Tax than they have to.
There are many ways to limit your liability, but unless you are an expert in this area, your beneficiaries could end up paying the taxman far more than is necessary.
Advice on how to distribute your assets in your Will can make the most of allowances and protect any vulnerable beneficiaries…
Talk to us about your Will. We are experts and can help you through the process. Call us on 01243 216900 or email us at email@example.com.
Holding your properties as tenants in common is a simple change to the way your property or properties are held which can save you thousands of pounds.
But what does this mean? This article aims to explain the legal terminology of tenants in common in plain English and how it could benefit you.
How tenants in common works
Most couples own their homes as joint tenants, meaning they both own the whole home. Holding the property as tenants in common means that each owns a share of the property, either a percentage or half each. This protects the agreed share for couples who have put unequal deposits into a property. If parents are gifting deposits to their children, it is also a way of easing fears in case of a break-up or death.
In the case of tenants in common, one partner can leave their share of the property on death whilst allowing the other partner to continue living there, passing the remaining share on death. It can also prevent your home being sold in the event you need to go into long term care.
There is no Inheritance Tax (IHT) for assets left in a Will to their spouse – in other words the surviving partner doesn’t have to pay IHT. After the remaining partner dies, the beneficiaries of their estate, usually the children, do have to pay IHT.
The rising cost of houses means that one property alone can put the estate over the IHT threshold. If the house is owned as joint tenants, both own the whole property. If one partner dies, the other automatically becomes the sole owner of the home. In the case of tenants in common each person owns a share of the house, usually split half and half.
Joint owners can split their home in two, therefore benefiting from tenants in common. By doing so, the half belonging to the person who passes away first, would be inherited by the beneficiaries immediately.
Provided the half is worth less than £325,000 – the current IHT threshold, no tax will be due. When the remaining partner dies, their half, inherited by the same children, could be under the threshold which again would mean no IHT is due.
Making it happen
You’ll need to inform Land Registry of the split and also write to each other to specify your intentions of the split.
As providers of Wills, Lasting Powers of Attorney and Trusts we can take care of all of this on your behalf. For further information or to arrange an appointment please call one of our expert team at legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
Whether you sent your pride and joy to school for the first time this September, or they’re into their second, third or fourth year, most parents feel a flutter of apprehension when letting go of their hand on the first day.
Doing everything to protect your child comes naturally. From planning a safe route for your kids to get to or from school and ensuring they know the green cross code to protecting them from bullying.
Protection comes in many shapes and forms. At this time of year, once they are safely in school, now is the time to make sure they are protected should something happen to you.
24,000 children a year experience the death of a parent according to charity Winston’s Wish.
Did you know that if both of a child’s parents die and there’s no valid Will and therefore no appointed guardian, children could be put in foster care until the courts decide who they should live with?
Added to which, most of us don’t live in the nuclear family of the past which adds additional complications.
Making a Will allows you to:
- Decide who will take care of your children should something happen to you
- Make it known how, and where, your children should be educated
- Ensure that there won’t be any family disputes or court battles over who takes care of your children
- Plus, any other wishes you have from what they eat to what they should receive as pocket money….
As parents, we all want the best for our children, and this is probably one of the easiest ways of protecting them. Making a Will also costs less than you may think. To discuss writing a Will speak to one of our expert team at legalmatters by calling 01243 216900 or email us at email@example.com.
Cryptocurrency is, in the most basic terms, an alternative digital currency to traditional government-issued currency. A recent survey by Dalia revealed that 5% of the UK are planning to buy cryptocurrency in the next six months, with 9% already owning cryptocurrency. Experts even predict that 33% of millennials will own some form of cryptocurrency by the end of this year.
The question is – with more people investing in cryptocurrency, how will it affect inheritance when these people die?
Firstly, it’s important to learn which types of cryptocurrencies are currently the most popular. Here are some of the most common forms of cryptocurrency and their codes:
- Bitcoin (BTC)
- Litecoin (LTC)
- Ripple (XRP)
- Ethereum (ETH)
- Zcash (EC)
- Monero (XMR)
Make sure you provide wallet keys in your Will
It’s essential to tell you future beneficiaries you have invested in cryptocurrency and to list the details of your cryptocurrency wallet in your Will. This is because it’s purchased under a pseudonym and can be very hard to trace if your beneficiaries don’t have the wallet details. By providing your public and private keys in your Will, you’re making it much easier for your beneficiaries to access the wallet. Some cryptocurrency providers have policies in place to transfer any cryptocurrency to beneficiaries or next of kin, though at the moment they are hesitant to have these crucial conversations for fear of fraudster activity.
Cryptocurrency is an intangible asset and eligible for Inheritance Tax
HMRC now treats cryptocurrencies as any other currency – so it’s not exempt from Inheritance Tax and should be listed on your Will. Cryptocurrency is one of the fastest growing currencies in value, so it’s important to keep track of how much your cryptocurrency fluctuates over time. The current standard exemption threshold for Inheritance Tax is £325,000. For example, if you have £100,000 in Bitcoin in 2018, it may grow to £400,000 by the time you die. If this is the case, your beneficiaries will need to pay a 40% Inheritance Tax rate on the £75,000 that exceeds the threshold.
For help with this, or on any aspect of Will writing, please give us a call at legalmatters on 01243 216900 or email us at firstname.lastname@example.org for further details.
Aretha Franklin died last week, and it has come to light that she did not have a Will, despite having an estimated fortune of over $80 million.
So, here’s a song title challenge for you – see how many you can spot!
Dying without a valid Will is no joke so I would say a little prayer for Aretha’s family and don’t keep daydreaming on that freeway of love, and do the responsible thing and think about getting a Will in place. Dying without a Will ain’t no way to respect your family, making them look like a ship of fools. Would they be willing to forgive you if your Will isn’t in place and rock steady.
So call me, Lucy at legalmatters on 01243 216900, to get your Will sorted in these ever changing times.
Remember, have R-E-S-P-E-C-T, and come and make your Will with me!
Civil partnerships were reserved for same sex couples only. However, in recent years, opposite sex couples have been campaigning for civil partnerships for heterosexual couples. The Supreme Court of England and Wales ruled in favour of civil partnerships for all, as the Civil Partnership Act 2004 was seen as an infringement of the European Convention of Human Rights. The legislation will be changed, though this is thought to take some time.
So how does a civil partnership affect estate planning? Firstly, it’s important to determine what ‘estate planning’ actually is. Your estate covers everything you own including property, finances, material possessions and even your social media accounts. An estate plan is how you wish to distribute your assets and possessions among your loved ones.
Here are six ways a civil partnership changes estate planning for all couples:
- If you die without making a will your partner will still inherit your assets
If you’re in a civil partnership and you die intestate (without making a Will) then your partner will automatically inherit a portion, or all, of your property. For example. if you and your partner own and live in a house together, they will stand to automatically inherit it after you die – unless there are special circumstances.
- If you die having made a valid will your wishes will be carried out
If you or your partner dies after making a valid Will, then all wishes will be carried out as they would be for a Will from a marriage. For example, if you want to pass down your home to your partner and your holiday home to your children then the wishes will be carried out as specified.
- Civil partners are exempt from Inheritance Tax
Neither you nor your partner will pay Inheritance Tax if the value of your entire estate is below £325,000. You will also be exempt from Inheritance Tax if you leave all your estate to your civil partner, community sports club or a charity.
- The Inheritance Tax increases to £450,000 if children are the heirs
If you want to leave your property to your birth children, the Inheritance Tax exemption threshold increases to £450,000. This also extends to foster, adopted and stepchildren.
- You can add surplus Inheritance Tax threshold to your partner’s threshold
If your estate is under the threshold, the ‘unused’ threshold can be added to your partner’s threshold when they pass away. This pushes the maximum Inheritance Tax threshold to £900,000.
- You can pay a reduced Inheritance Tax rate in some circumstances
The standard rate for Inheritance Tax is 40% but you can reduce it to 36% if at least 10% of your net assets are left to charity in the Will. If you and your partner owned farmland or woodland you may be eligible for Agricultural Relief on your Inheritance Tax bill.
Estate planning can look complicated. If you’d like some help in writing your Will, contact one of the team at legalmatters on 01243 216900 or email us at email@example.com.