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.

Factoring Overseas Assets Into Your Will

Writing a Will is the best way to decide exactly what will happen to your assets after you die. It’s important though to remember that you can determine what happens not just with your assets in the UK, but international assets too.

It’s no longer particularly unusual for people to own assets in more than one country. For example, around 200,000 Brits own property in France alone. Accounting for these international assets properly when writing a Will is incredibly important, but the process can be rather complicated.

There are cross-border inheritance and tax issues to consider. Britain is unusual in that you can decide exactly who inherits your property, but in certain European nations there are more restrictive ‘forced heirship’ rules which dictate precisely who can inherit. Until a couple of years ago, these rules applied to Brits who own property in these nations, though these restrictions have since been loosened.

It may be that you need to have separate Wills in each country in which you own assets, as well as a main Will in the country in which you live, in order to control what happens after you die.

In most countries, probate is required before any foreign assets can be sold or transferred. This process can be complicated, yet it is still preferable to dying without a Will in place, in which case your loved ones will have to deal with foreign intestacy. This can be enormously expensive, stressful and time consuming.

The world is getting smaller all the time, so increasing numbers of us own assets in other nations – whether that’s property or investments. That makes it even more important that you write comprehensive Wills in each nation, setting out precisely what you want to happen with your assets.

No-one wants to think about what happens after they die, but failing to leave a Will could leave your loved ones with enormous stress, particularly if they are having to deal with foreign assets as well as domestic ones.

Talking to a professional Will writer is strongly advised so you ensure all your assets are going to the right places. You are welcome to call us at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk and we’d be happy to talk you through things.

How easy is it to challenge a will? A cheesy tale of woe

The national press carried a somewhat bizarre tale of a woman in her 20s who married a retired school lollipop man, aged 76, who claimed that she’d found his most recent will (which left the vast bulk of his £600,000 estate to her rather than his daughter by a previous marriage) in an empty Doritos packet in the attic of the family home in Harrow Road, Wembley!

The Daily Mail story tells how Marsha Henderson married ex-London bus conductor Newton Davies in 2004.  He died in 2013 aged 85 and in a will dated July 2011 left Ms Henderson £25,000 with the rest to his daughter and friend.  The so-called ‘Doritos Will’ apparently discovered by Ms Henderson reversed the contents of the earlier Will.

So, there were three different parties involved and therefore three different sides of the story.

If you can put up with the crisp puns then stay with us for a little longer …

So quite how does this corny triangle (I did warn you) relate to us all and what messages should be taken from it?

It may strike you that putting an important document such as Will into a Doritos bag in an attic is a bit eccentric, not to say suspicious, but there are eccentric people in the world.  That of itself would not be grounds for challenging the will.  The deceased’s daughter was able to convince the judge that her father had signed his last true will in July 2011 and therefore the more recent ‘Doritos Will’ was a forgery.

That contention was assisted by the fact that the new will was a simple, but rather poor quality, fake.   Its most striking defect being that the clause at the end referred to it as being “HER” last will.  As the judge pithily remarked “the deceased was a man and not a woman”.

So, was Ms Henderson cornered (I apologise!) and could this happen to anyone?

Not all challenges to a will may be as clear-cut and obvious as this one.  Any court would have to be satisfied that the will does not express or carry out the deceased’s true intention.  There has to be evidence backing this up. Although this case may have been an exception because of the amateur and obvious attempt at deception, challenges to Wills on the grounds of forgery are not uncommon – but they are notoriously expensive and difficult to prove.  For example, handwriting experts are often called upon to dispute a signature.

So how do you take the heat out of a wave of potential problems?

Having a professionally prepared will is obviously the best answer.  Crisp packets in lofts are never the best place to house such an important document as a Will!  Here at legalmatters we are very happy to discuss with clients their circumstances, needs and options in relation to Wills and estate planning.

We make the whole process nice and easy, dealing with everything over the phone or by email if that’s what suits you best.

It doesn’t need to cost a packet to make a Will!  Our costs are also fiercely competitive.

Let us guide you through the process of making a Will and ensure that your Will is a sweet (as opposed to a hot) potato!

For more like this, Follow Us on Facebook, or if you have an immediate query, call us on 01243 216900 or email us at info@legalmatters.co.uk.

Winter is coming; be prepared. The legal lessons we can learn from Game of Thrones…

As Game of Thrones season 7 is fully underway, the shenanigans of the inhabitants of Westeros are attracting viewers in record breaking numbers. Whether or not this fictional romp of dragons, zombies and war is your cup of tea, once you remove the fantasy element, you are left with the very bread and butter of a private client practitioner’s workload; family relationships, wealth and death. A tenuous link? Perhaps, but undoubtedly these universal themes are very much at the heart of both worlds.

Admittedly, the level of death is a little more frequent and varied than the average probate practitioner’s workload. Her Majesty’s Courts and Tribunal Services have a difficult enough job processing paperwork without having entire family dynasties wiped out in one fell swoop (one can only imagine the Oath drafting…)

But on a serious note, the programme highlights that death will not always present itself in the chronological order of a family tree. Even despite the wealth of information in the public domain, we are still faced with clients who do not have a Will as they believe their wealth will automatically be inherited by their children on their death. The Intestacy Rules will only go so far in handing down your estate to your lineal descendants but, of course, there is so much more to a Will then simply enshrining this course of events.

Warring offspring? Dubious marriage choices? Unruly illegitimate children? All in a day’s work in the Seven Kingdoms yet in the real world, these issues are just as much cause for concern for our clients today. If you are worried about protecting the family wealth (however big or small) correct estate planning can prepare for such eventualities and ring fence funds for your intended recipients without the worry of funds falling into the wrong hands.

Indeed, so many of the show’s main conflict points could have been easily avoided and managed had the characters’ legal affairs been put in order.

Had the ‘Mad King’ been furnished with a fully registered Lasting Power of Attorney, then his appointed attorneys could have stepped it at the first sight of faltering capacity and a much cheerier (and less bloody) outcome could have been achieved by all.

A Lannister always pays their debts, and loans and gifts are indeed an excellent form of estate planning if done in the right way. A flexible family trust is a great way of allowing for loans and repayments to be made to and from the family pot of money. Running out of blood descendants? A trust also allows for the person setting it up (the ‘settlor’) to add friends or charities into the mix.

There is certainly a stark solution for making provision for ‘blended families’ (with children born from different relationships) in a straightforward manner, without having to lose your head.

Whatever your family situation, legalmatters will find the right solution for you to ensure that your death does not leave any nasty surprises for those left behind.

An appropriate, professionally prepared and properly executed Will can provide security for your family, during an already emotional time. There is a time and a place for drama and conflict, and your death shouldn’t be one of them. Make a Will, make your wishes clear, because goodness only knows transferring the ownership of a dragon is an administrative nightmare at the best of times!

For more like this, Follow Us on Facebook, or if you have an immediate query, call us on 01243 216900 or email us at info@legalmatters.co.uk.

What Happens when the Queen Dies?

Queen Elizabeth II has been alive for longer than most of us and yet it seems hard to believe that she will one day die. However, there are many plans already in place to deal with this eventuality.

The responsibility for dealing with the news first falls to the Queen’s private secretary, who will inform the Prime Minister. From there, the Foreign Office will notify the Commonwealth nations.

The national and world press will also be told and shortly afterwards a footman at Buckingham Palace will pin a notice to the gates announcing her demise. This will be replicated on the Palace website too.

Television and radio programmes will be interrupted with an announcement of her death. Similarly, to the deaths of Kennedy and Princess Diana, you will undoubtedly remember where you first heard the news.

Social media will likely erupt and you may well hear it here first.

The country will enter into an immediate period of mourning. Parliament will be recalled and Charles will become King – unless his mother outlives him and then it will fall to the next in line, William.

Under common law, the wife of a King is automatically referred to as Queen, so despite any question marks over Camilla’s role, she will become Queen Camilla.

In the event that the Queen dies abroad, she will fly home by an RAF jet. From Balmoral, she will travel back on the Royal Train.

She will return to Buckingham Palace, flags will lower and bells will toll across the nation.

In the time between her death and funeral, thousands of people will be involved in the myriad of activities surrounding a monarch’s death.

Invitations will be issued for her funeral. Government departments will coordinate with the police, security, armed forces and transport to ensure the safety of the politicians, heads of state and public that will be attending and lining the streets.

The words to the National Anthem will be amended and new postage stamps and currency will be created.

Charles will be expected to make his first address as Head of State on the evening of his mother’s death. He will be proclaimed King the following day and will then commence a tour visiting Edinburgh, Belfast and Cardiff to attend remembrance services.

Television schedules will change. Some sporting fixtures may be cancelled and books of condolence will appear in town halls nationally and embassies around the world.

The Queen will be moved to Westminster Abbey to lie in state for several days. Four soldiers will guard her at all times and it’s thought the Queen’s children and grandchildren will arrive unannounced to stand vigil as well.

The day of the funeral will be a national day of mourning and a public holiday. The Archbishop of Canterbury will lead the service and afterwards her coffin will be taken to Windsor to be interred in the royal vault.

These plans will ensure the event will occur as smoothly as possible. If you’d like to ensure you have the right plans in place for after you’re gone, call us on 01243 216900 or email us at info@legalmatters.co.uk.

Selling A Property in Probate – Online vs High Street

Often when someone is left a property by a deceased relative, they will want to sell it quickly. This may be for emotional reasons, but there are also financial concerns to take into account too – maintenance costs can quickly mount up.

Given these difficult circumstances, what do you need to consider when selling a property in probate?

When can I sell?

You cannot sell the property until probate is formally granted. This will generally take around eight weeks, though there’s nothing to stop you putting the property on the market before that date.

Valuations

When the executor applies for the grant of probate, they will need to detail all of the deceased’s assets, with valuations. It’s therefore a good idea to get the property valued by a couple of different estate agents to give you a decent idea of what it is worth. Alternatively, you could get it valued by a surveyor.

Title and deeds

If the property has been registered with Land Registry, downloading a copy of the title entries for the property to ensure that it was in the deceased’s name, should be straightforward.

However, if it wasn’t registered then you will need to locate the paper title deeds.

How to sell it

Traditionally, high street estate agents have been the method of choice for selling property. However, recent years have seen the emergence of a number of big online estate agents, which may be worth considering.

One big plus point with online estate agents are the fees, which are usually much smaller than dealing with a high street estate agent. You will often only have to pay a single, flat fee with an online estate agent. However, with a traditional estate agent, the fee will be a percentage of the eventual sale price – on expensive homes, this can be quite significant.

There are downsides to online estate agents though – you may need to do the viewings yourself and sort out photographs to go with your property’s listing on the various property portals.

Remember, the fact that there is no chain involved with the property will be an added selling point too, as it should represent a relatively straightforward purchase.

Probate can be a difficult, stressful time so it is important to work with experts who can ease the burden.

At legalmatters we can guide you through every part of the probate process. Call us on 01243 216900 or email us at info@legalmatters.co.uk.

How to keep your documents safe – Digital vs Paper

Keeping your important documents organised and secure will make it easier for you or your loved ones to access them when needed.

First, give some thought as to which documents need to be stored securely. The simplest way to do this is to think in terms of how easy or difficult it would be to replace the document in question and what would be the impact of it being missing.

Top of your list should be items such as your Will and Power of Attorney but also include birth and marriage certificates, divorce or other legal documents, and house deeds.

The original copies of these items should ideally be kept in a lockable fireproof, waterproof safe or box. It is prudent to have at least one and preferably two backup copies which should be held in different locations. This is the ideal time to consider whether to store physically or digitally, each having different benefits.

At home (hard copy)

This option provides you with cheap and easy access to your documents. Depending on what storage you use you may be vulnerable to theft, fire or flood.

Solicitor

Most solicitors will store your Will for you. Some also provide a document storage facility for your important documents. With legalmatters, there is no fee for this.  Solicitors’ storage is regulated so you can expect redress if something goes wrong.

Probate Service

You can lodge your Will with the probate service. There is a flat rate fee for this and you are the only person who can access your Will while you are alive. Upon your death, your executor can access it.

Document storage facility

There are many companies, including some banks, that provide document storage.  Prices vary quite considerably so it’s worth shopping around.

Remember though that legalmatters don’t make a charge for storing your documents; we are content that your documents are safely stored and are easily accessible.

Safety Deposit Box

Many banks no longer provide this service. However, if they do, never store your Will in one. Your executor will not be given access to it until they gain probate, which they cannot do without your Will.

Storing items digitally is straightforward. First you will either need to scan or photograph the document and then decide where you want to keep it.

On your PC

This gives you easy access and can be done securely. You must password protect your PC, have a reputable, up-to-date, anti-virus software running and consider encrypting your files to protect against theft, hacking or viruses.

Cloud Storage

Cloud storage – either personal or online – allows you to access your documents from any device anywhere. Again, make sure you have the same security protections in place as above.

Remember also to completely clear the hard drive before you sell or give your computer away.

Finally, wherever you store your documents make sure your loved ones and executor know where to find them.

For advice on storing legal documents and which ones that will be needed to write your Will or during probate, please call us on 01243 216900 or email us at info@legalmatters.co.uk.

How to prevent things going wrong with your LPAs

With dementia continuing to rise, the importance of Lasting Powers of Attorney (LPA) cannot be overstated. An LPA can be a vital tool, giving a friend, loved one or solicitor the power to make decisions on your behalf should you reach a position where you are unable to.

Safeguards are built into them to ensure they are used appropriately, but there are steps you can take to ensure things do not go wrong.

Choose the right attorney

If you want to prevent any future issues with an LPA, then choosing the right attorney at the outset is crucial. There are many duties involved in acting as an attorney for someone, so you need to pick someone responsible and organised, as well as someone who knows you well and can be trusted to act in your best interests.

You may want to select more than one attorney – this will make abuse of the powers associated with an LPA much harder.

If you do choose more than one attorney, you can set out whether they need to act together or separately for certain issues.

Informing loved ones

One important safeguard is the fact that the ‘donor’ (the person handing over their powers to their attorney) can name up to five people who must be informed before the LPA is registered. It’s important to do this – these loved ones can then step in and dispute the registration, should they believe that the donor was put under undue pressure or the attorney is set to behave in an inappropriate way.

It’s a good idea to speak to your friends and loved ones who aren’t named on the document in advance of organising an LPA too. You can explain why you are doing it and how you want the powers to be used – this can help reduce the chances of fraud and should also reduce the chances of conflict between family members later on.

Guidance

Another safeguard is the ability for donors to have certain guidance for the attorney written into the LPA. For example, this may suggest that they meet a couple of times a year to go through bank details and discuss financial arrangements for the next six months. This should also make it harder for any fraud to take place.

Organising an LPA can give you peace of mind that you will have someone you trust making decisions for you, should you lose the ability to do so.

Choosing the right attorney, and getting the right LPA in place, can take some time, but it is time well spent.

If you’re struggling to choose an LPA or would like advice on how to appoint one, call us on 01243 216900 or email us at info@legalmatters.co.uk.

What If There Is A Death Tax Introduced

Before the snap General Election, the Government was planning to introduce a new fee structure for applications for Grant of Probate or Letters of Administration (for when someone dies intestate).

The new fees would have taken effect last month (May 2017), but the election has put these changes on hold.

When somebody dies, the executors must apply for a Grant of Probate from the probate registry.  This needs to be done to allow them to administer the estate according to the terms of the Will.

Previously, the fees for this application were set at either £155 if probate was applied for by a solicitor or £215 if it was applied for by friends or family. There were no fees if the value of the estate was less than £5,000.

If the Government were to now make the fee changes as planned, the first change would be that estates below £50,000 would no longer have to pay any probate fee. This significantly increases the number of estates exempt from the fees. Unfortunately, everyone else would see an increase.  Those with the largest estates would see fees of up to £20,000.

The fees would be tiered depending on the value of the estate.

£50k – £300k               –           £300

£300k – £500k             –           £1,000

£500k – £1M               –           £4,000

£1M – £1.6M               –           £8,000

£1.6M – £2M               –           £12,000

Above £2M                 –           £20,000

These fees would be in addition to inheritance tax.

The probate fees need to be paid up front. It may be difficult if the executor is not able to release cash from the deceased’s bank account and/or the executor is on a low wage or benefits. Previously they may have been able to apply to get help with the fees. However, the Government may also now remove probate applications from the general fees remissions scheme and financial help could no longer be available if all the scheduled changes were to go ahead.

If these changes were to happen, there are things to consider which may reduce the amount of probate needing to be paid. In particular, married couples or those in a civil partnership could consider the nature of any property ownership agreements they hold.

Another way to reduce the cost of probate is to consider setting up a Trust. This may lower the value of the estate (from a probate point of view) and drop it from a higher tier rate to a lower one. Trust law is complex. You will need advice from a qualified advisor to ensure that you are setting one up in the most tax efficient way, so that it doesn’t end up costing you more than you hope to save.

For advice on this or any aspect of planning a Will please call us on 01243 216900 or email us at info@legalmatters.co.uk.