Category Archives: Legal Matters

Dog days are over…

What happens to your pets on your death

The UK is famously a nation of dog lovers. If you were to head out to any of our parks, woodlands or beaches on a crisp autumn afternoon you would encounter more canine friends than you could shake a stick at (which they would love). With over 8.5 million (just over 24%) of households owning a veritable smorgasbord of breeds, our four-legged friends are as much a part of the family as our own flesh and blood.

But what happens to our furry babies when we die? Rather callously, the Administration of Estates Act 1925 defines domestic animals as ‘personal chattels’ and can be gifted in your Will in the same manner as a toaster, or the family grandfather clock. In the eyes of the law, your pet may be considered as tangible personal property but as a living, breathing and much-loved addition to your family it is important to give proper consideration when setting out what happens to them. So what should you consider?

Who gets Rex?

Whilst many family members would be happy to accommodate your pooch for a weekend, asking them to take full ownership may well be a different story. Ensure that you speak with potential friends or family members to be certain that they are happy with having your pet(s) on a permanent basis.

As with any gifts in Wills, it is always helpful to consider a plan B should you first choice no longer be in a position to take on the responsibility of your pet. A substitute beneficiary can be drafted to step in. Alternatively, charities such as the RSPCA’s Home for Life and The Cinnamon Trust run rehoming schemes and provide long term care for pets whose owners have died, if there are no other individuals who you are able to draft in.

What about costs of care?

Maintaining an animal can be an expensive business. Food, insurance and general health costs (flea/worming treatment/annual vaccinations) all add up. Leaving an additional cash legacy to the beneficiary tasked with taking on your pets in a great way of ensuring that your pet is looked after without any financial detriment to the beneficiary. In addition, it may be more of an incentive for the individual to agree to having your pet if they do not have any financial pressure to meet bills from their own pocket.

How to put this into practice

The correct wording of a legacy (whether canine or otherwise) is essential to ensure that a gift is properly dealt with. It is ALWAYS advisable to consult with a solicitor to ensure you wishes are adequately put in place. The proper, legal, drafting is necessary as any incorrect provision may fail. Your pet cannot individually receive a legacy (as they cannot provide a legal receipt) and as such any clause stating eg “£5,000 to Rover” just won’t work.

Legalmatters is always happy to discuss your needs for your dogs (or cats, or indeed any other animal) and help get the correct provisions in place.  Whether your best friends are diamonds or dogs, we can help you with your arrangements by drafting the necessary claws (never one to pass up the op-paw-tunity for a pun).

Spoiling Legacies For Celebrity Children

Father of 4, Gordon Ramsay, has joined a growing list of celebrities who have decided not to leave their inheritance to their children. The celebrity chef, perhaps as well known for his colourful language as his culinary genius, believes in instilling a strong work ethic in them instead.

He has homes in London, Cornwall and LA and an impressive income – he is in 26th place on the Forbes rich list, with an income for the last year of £46 million. Despite this, he shares the view with many that to leave his offspring a fortune would be to spoil them.

He and his wife Tana have agreed they will give their children the 25% deposit they will need for a flat – but that’s it.

The common theme among the people taking this stance is that they want their children to grow up hard-working and fulfilled. They believe that handing on large sums of money changes people for the worse.

There are many who feel that their money is better spent on charitable works. In 2010, Bill and Melinda Gates and Warren Buffet set up the Giving Pledge. They encouraged 40 of America’s wealthiest people to join them in committing to give more than half of their wealth away, either while they are living or through their Will.

In an interview on ITV’s This Morning, Bill Gates summed up his attitude towards inheritance: “It’s not a favour to kids for them to have huge sums of wealth. It distorts anything they might do creating their own path.”

Simon Cowell has also said he plans to leave his money to charity. Whether he has changed his mind since the birth of his son, Eric, remains to be seen.

Sting on the other hand has said he intends to spend his wealth while he’s still alive. He, along with Nigella Lawson and Lenny Henry have echoed similar concerns as Bill Gates about over-privileging their children.

Back in 1992, three female inheritors set up the Inheritance Project. They wanted to talk about how inheriting wealth can be a negative thing and the effects it had on them. They interviewed 200 people in a similar position to them. They found that it was common for people who had inherited large sums of money to be trapped by their lack of needing to work and that many of them found it difficult to sustain relationships and had problems with addictions.

Obviously, all these examples involve very large sums of money and the people in question are not leaving their children penniless. But regardless of the size of your estate, it is worth putting some thought into what you leave to who and ensuring that it’s drawn up correctly.

For help on any aspect of preparing your Will, please call legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

Peace Of Mind Before Your Holiday

Planning your Will may be the last thing on your mind as you’re packing your shorts and sun cream, but accidents and injuries happen when we least expect them. Of course, the chances of dying or sustaining a severe injury on holiday are slim, but if you have a Will in place it’s one less thing to worry about as you head off for your break.

The risks vary depending on where you’re travelling to. According to the latest information from the Foreign and Commonwealth Office (FCO) there were just over 3,600 reported deaths of British nationals abroad in the year 2014/2015. Spain, Thailand and France recorded the highest number of fatalities. The FCO also recorded over 3,300 reported hospitalisations. In both cases, the numbers reflect occasions where the foreign office gave assistance, so the totals for both sets are likely to be higher.

If you’re travelling abroad, it’s far less likely that you will be struck down by an infectious disease. The greatest risk for most travellers according to the World Health Organisation is road traffic accidents. Even more so if you’re travelling to a lower income country, where typically road laws are a little more relaxed. Add to that, that as a driver you may be driving a vehicle you are unused to, the steering wheel may be in a different place – you may be adapting to driving on the right-hand side of the road and navigating signs in a different language.

The other high risks are associated with violence and water activities. According to the Swimming Teachers’ Association, a Briton is 5.5 times more likely to drown abroad than in the UK. In the decade up to 2010, 784 Britons drowned abroad, the majority of whom were adults.

Once you have a Will in place, make sure it’s stored in a way that’s easy for your executor to find. The company that writes your Will may be able to do this for you.

Holidays are a time to relax and spend time with the people you love. Setting up things such as Wills and travel insurance means you can sit back and enjoy yourself in the knowledge that if something does go wrong, your family will be taken care of.

For help on any aspect of preparing and writing a Will, please call legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

 

The Forsyth Saga

Last Friday, news broke of the sad death of Sir Bruce Forsyth. The former Strictly Come Dancing host and all round National Treasure passed away at the age of 89, following a lengthy battle with illness. 

Reports in various national papers have since detailed the star’s alleged estate planning which, according to ‘a friend’, was done in an effort to “avoid it being gobbled up by the taxman”. By all accounts, Sir Bruce has left all of his £17million estate (didn’t he do well?) to his wife outright where it has then been widely reported that his widow Wilnelia will then “be able to transfer up to £650,000 to each relative tax free to avoid inheritance tax”.

Whilst is it true that legacies to spouses are free from inheritance tax by virtue of the spousal exemption, legalmatters shakes its head at the level of misinformation reported. Quite frankly it doesn’t even know where to start with dissecting what a flawed and short-sighted piece of alleged tax planning this represents, but here goes.

So what is the actual position (if indeed these were his wishes) and why might it be regarded as a potentially reckless and ineffective idea?

First of all, the tabloid press have been quoting the figure of £650,000 supposedly available for Wilnelia to generously distribute ‘to each relative’ once Sir Bruce’s legacy has been transferred. Each relative!?! If this was the case, then the majority of estate planners would be out of a job and considered, surplus to requirements.

It would appear that the press have confused the level of transferrable nil rate band available to the surviving spouse on death with what an individual is able to give away tax free during their lifetime. Whilst Wilnelia would indeed be able to benefit from her late husband’s inherited nil rate band of £325,000 to combine with her own on her death, her late husband’s nil rate band is not something that she would be free to make use of during her lifetime. The articles also totally disregard the newly established ‘residential nil rate band’ that this tax year alone would have increased the late entertainer’s tax free allowance by an additional £100,000 (but latterly would allow a combined nil rate band of £1,000,000 if left to lineal descendants).

Any legacy left to a spouse is free of tax by virtue of the spousal exemption. Wilnelia is, of course, free to make gifts to whoever she likes during her lifetime. As long as she were to live another 7 years following such gifts (of any monetary value) these would also be inheritance tax ‘free’. Quite honestly, she could gift the full £17 million equally amongst his 6 children (or whoever she so wishes) as soon as she had received the monies from probate, should she be so inclined, but therein lies the issue.

If indeed this is the arrangement, there is NOTHING obliging Wilnelia to carry out the ‘wishes’ of her late husband. Outright gifts by their very nature, leave the recipient free to do whatever they like with the legacy. Despite ‘wishes’ or ‘instructions’ from the deceased, there is nothing legally binding to see that these are fulfilled. The deceased is simply requesting the recipient to make distributions and is hoping that this will be carried out. Whilst this level of trust is admirable, the private client practitioner knows more than most that trusting your relatives to ‘do the right thing’ on your death is a dangerous assumption.

Let us assume that, despite having no legal obligations to do so, the recipient of the legacy has every honourable intention of making these posthumous gifts. They themselves would need to survive another 7 years which is always a risky proposition. What instead, if they were to lose mental capacity and unable to make such transfers? Michael Schumacher’s tragic accident and resultant circumstances have shown that age, wealth and level of fitness have nothing to do with a lack of mental capacity and inability to manage your own affairs. How can we be sure that Wilnelia shall live a long and untroubled life, free of illness and incapacity? Her ability to make gifts from her late husband’s fortune and to therefore share the wealth and to reduce her own liabilities to inheritance tax is dependent on her being mentally fit and well; certainly, any attorneys that she may have appointed won’t be able to undertake such tax planning ventures without court authority (another common misconception).

So what might Sir Bruce have done to make provision for his children and grandchildren (and indeed he could well have done, because we are commenting on the reporting, not on actual events)?

Lifetime gifting would have been the best starting point. If carried out wisely and cautiously, after careful advice and taking all needs of the parties into due consideration, then lifetime gifting is an excellent way of reducing your tax bill.

And what about the use of trusts? Despite trusts having their own particular tax regimes, they are immensely useful structures to protect and preserve assets against unknown circumstances. Tax shouldn’t necessarily always be the driver, particularly where significant wealth is concerned.

Finally, any charitable giving would have the double benefit of not only being exempt from IHT for the legacy itself, but it could also have reduced his IHT rate to 36% if he had left 10% or more of his total estate to charity. A Brucie bonus if you will.

For the papers to glibly report that Sir Bruce has ‘in one fell swoop’ cannily avoided inheritance tax and at the same time ensured that his wealth lands where he would wish is, in our humble opinion, grossly underestimating the risks and potential issues at hand and is in any event based on apparent mis-reporting of the facts.

Make sure that your wishes are adequately enshrined in the correct, binding, legal documents as the road to court is paved with good intentions. Nice to sue you, to sue you, nice. Speak to a member of the team at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk to find out more.

The Best View at the Funeral

As the majority of everyday life develops an online alternative, this has now even been extended to the after-everyday life.

Within the UK, rising numbers of mourners from all corners of the globe are now able to observe funeral proceedings thanks to live streaming. All that’s needed is a stable internet connection and a compatible device in order for those unable to attend to watch the sombre ceremony from the comfort of their own home.

Undertakers of a more traditional disposition however, have criticised the concept and expressed concern that it will become the norm, effectively discouraging funeral attendance. Despite the potential benefit it may bring for distant friends and family or those with mobility issues, a leading UK funeral director fears it may “pander to people’s laziness”.

The concept itself may not be as new as you may think. A recent survey has indicated that 61% of funeral directors have received live streaming requests with around one fifth of the 281 crematorium’s in Britain already having had a camera fitted. The ceremony is filmed using said camera – which would be discrete in nature – to capture proceedings, which are then able to be accessed online by anyone with the secure login details.

Although some of the funeral directors expressed scepticism, others highlighted the benefits of the streaming service. President of the Society of Allied and Independent Funeral Directors, Paul Allcock stated that if mourners reside further afield, there may be a request for it. He does however recognise that engaging personally with the bereaved is often an essential part of the grieving process – something which is unlikely to be replaced completely by technology.

“It’s wonderful for those relatives who live abroad, but there’s also a danger of pandering to people’s laziness and not attending personally and sharing your condolences, which is such an important part of the grieving process.”

However, for those who have already used the service, the sheer possibility of being able to view the service at all may outweigh any issues with it being on a less personal level. Estimating that between a quarter and a third benefit from live streaming, funeral director Max Webber mentions that the West Sussex-based firm he works for has offered the service for nine years.

Whereas some firms such as Webbers offer the service free of charge, other firms do charge. Llanelli crematorium for example charge webcasts at £80 and an extra £65 for a DVD.

The streamed funerals run as they normally would, following the camera being set up and remains unaffected by the webcast which is usually one-way. A possible downside that exists for those watching on their laptop screens is the potential to suffer from technical interruptions. Considering the nature of the circumstances, interference with the stream may result in great upset being caused.

Final Fling

At Sir Terry Wogan’s memorial service at Westminster Abbey last month, Peter Gabriel sang That’ll Do – Sir Terry’s top pick when he appeared on Desert Island Discs in 2012. So how can you ensure music played in your memory hits the right note?

The top ten funeral songs in the UK include Frank Sinatra’s My Way, Over the Rainbow sung by Eva Cassidy and Monty Python’s Always Look on the Bright Side of Life. But if the thought of leaving the music choice at your final farewell to your friends and family makes you shudder there’s only one way around it – to write a will.

After all your kids’ and grandkids’ choices may be completely at odds with what you’d have picked, as recent research in The Guardian showed. The most-nominated song among 16- to 24-year-olds was Death Cab for Cutie’s I Will Follow You into the Dark while the older generation (55-to-64) plumped for the Pythons with Joy Division and the Flaming Lips in between.

Anyway, in today’s digital age there’s no need for your musical legacy to not fully reflect the contents of your iPod – in fact, you could even make a playlist of your funeral favourites, should the worst happen. Then, when you write your will, you can give your Executors instructions for your send-off including your iPod password to ensure it passes melodiously.

Of course, there are many reasons for writing a will alongside choosing your funeral song: protecting your family after you’ve gone and safeguarding your assets being the prime. If you haven’t made a will, or if you’re interested in updating an existing one, contact us today on 01243 216900 or email info@legalmatters.co.uk. To misquote Frank Sinatra, we’ll do it your way.

Rocket Science

Despite the 21st century being more than a decade old lawyers have lagged well behind the market when it comes to making life easier for their clients.

Delivering products and services online and over the phone is the norm for many businesses, in fact everything from groceries to holidays, from tax returns to insurance are bought or completed online as a preference.

Lawyers have made it difficult enough with hourly rates, rigid opening hours, inordinately long time scales to complete matters and now most fail to embrace the very fabric of what makes most people tick when deciding to interact with a business – technology!

It’s not the total story of course because using online processes to take instructions, payment, provide useful educational material is only as good as the expertise used to develop the IT. Automation is inevitable and reduces the cost of essential family and business legal services but there still needs to be a way out of the IT process if circumstances require ‘human input’! We’ve all been there, wanting the comfort of speaking to someone and the phone number isn’t even published.

Clever digitally produced documents that collect information from the user’s own input exists now and certainly at legalmatters we make good use of that. However, we have not lost sight of the need for a personal touch. We speak to people, reassure about the right thing to do and make sure that if the computers wobble we’re there to maintain high standards of quality.

So we’re lawyers and we interact with people but technology enables us to do that quickly, efficiently and cost effectively. It’s not rocket science.

Are legal services lagging behind the internet revolution?

I read with interest a recent article featured on the Saga website which suggests people are finding it hard to find accessible, relevant and clear legal information online. It appears that legal services are lagging behind the internet revolution, and part of this could be down to a general lack of awareness about legal issues and reluctance to use a solicitor.

The Legal Services Board’s head of development and research, Alex Roy, confirms that research was carried out to understand whether, and how, consumers would see benefits in online support to help them access legal services.The research demonstrates the difficulty that consumers have engaging with legal services as they stand. It is thought that well-designed online sites could improve consumers’ ability to find the legal services that meet their needs.

Legalmatters have this covered. We are a new kind of law business with one clear mission – to make your life easier. By providing fixed-fee, fast-track legal solutions online and over the telephone, accessible, relevant and clear legal information is only a “click” away.

Link to Saga website article: http://www.saga.co.uk/legal/everyday-legal/lsb-legal-survey.aspx