Category Archives: Estate Planning

Vulnerable relatives

The importance of the right advice when it comes to vulnerable relatives

When it comes to protecting vulnerable individuals, it is important that people obtain the right advice. There are a range of options, with tax and inheritance implications, where the right guidance can ensure vulnerable individuals are both protected and provided for.

Who might be considered a vulnerable person?

A vulnerable person can be classed as someone who:

  • Isn’t mature
  • Isn’t financially sensible
  • Lacks capacity to deal with financial affairs
  • May be good with money but has their finances ‘means tested’ for benefit purposes.

An example scenario

‘Sarah’ has learning disabilities. She used to live with her parents, but decided she wanted to live independently so moved into sheltered housing. This gave Sarah her independence but also provided her with the support and supervision she needed as and when required.

To pay for her accommodation, Sarah received benefits, Local Authority funding and Personal Independence Payments (PIP).

Sarah has a huge passion for steam engines. She lives, breathes and dreams of steam engines, and will do all she can to go and see them. This passion has seen her travel across the country on various occasions to see famous engines.

Sarah’s parents encourage this passion, and upon their death would like to leave her some money so she can continue to enjoy the thrill steam trains give her. They also want to leave money to Sarah to help maintain her and ensure she is looked after, but don’t want this inheritance to impact on the means tested benefit Sarah receives.

What options do Sarah’s parents have?

It’s only right that Sarah’s parents seek advice from a professional who could advise them of the best routes to take and why.

Some routes the parents SHOULDN’T consider include:

  • Leaving all of the money to Sarah’s brother. By not putting the money into a Trust for Sarah and leaving the responsibility on her brother to ‘see her right’ can lead to problems for Sarah. Firstly, the parents are relying on the brother’s integrity to provide for his sister. Secondly, this leaves the inheritance they left their son at risk of any issues that could affect his wealth. Such issues as divorce, creditors, being spent etc.
  • Create a Deed of Variation. This can have tax implications, but also be classed as ‘deprivation’ with regards to the care Sarah receives in sheltered housing. The Deeds of Variation would be included in the means tested benefit which could result in Sarah receiving a reduced payment – or losing this benefit altogether.

So, what should they do?

In this scenario, the best option for Sarah and her parents would be to place any inheritance into a Discretionary Trust. Ideally a Disabled Discretionary Trust, as this would protect Sarah’s means tested benefits. There are also tax advantages available to Sarah if this is the route chosen by her parents.

Services from legalmatters during Covid-19 pandemic

Here at legalmatters, we continue to do everything we possibly can to service our existing and new clients during these very difficult times.

Our ability to provide remote services makes us stand out from the crowd.  This means that you can deal with your will, power of attorney, probate, trust and tax advice etc all over the phone or by email and documents are sent to you by post.  We are also advising our clients on signature processes bearing in mind social distancing measures.

Meanwhile, the office continues to operate with minimal skeleton staff for the protection of our staff, clients and visitors, enabling us to still process physical documents for our clients.  If you do find that you need to call into the office for instance to have documents witnessed when it is otherwise difficult for you to arrange that with family and friends then do please get in touch.

If you would like to speak to one of our expert lawyers about protecting a vulnerable person after your death, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Our home

When the joint owner of a property dies, does the property pass to the survivor?

If you own a property jointly with someone else, you may automatically become the sole owner when they die, depending upon the way in which the property is held.

If you live in a home which you own jointly with someone else, it is important to understand the type of ownership you have. This is because it will determine what happens to the property after the death of one owner.

The two types of property ownership

If a property is owned as tenants in common, then each owner has a specified share of the property. For example, a couple may choose to have 50 per cent each, or if one has contributed more to the purchase price they can agree on different shares.

When a tenant in common dies, their share of the property passes in accordance with the terms of their Will or, if they did not have a Will, then under the Rules of Intestacy to specified close family members. This means that the person living in the property will not necessarily inherit it and they may have to leave so that it can be sold.

The second type of property ownership is a joint tenancy. No share is specified and the property is deemed to belong to the owners jointly. When one of them dies, the remaining owner automatically owns the whole of the property.

This is the case, even if the deceased left a Will leaving all of their assets to someone else, because a joint tenancy interest in a property passes by the Right of Survivorship and not via a Will.

The Land Registry will need to see a certified copy of the Death Certificate to amend the Register after the death of a joint tenant, however they will not ask for a Grant of Probate, although this may still be needed for other assets that the deceased may have held. If the property is solely owned or owned by tenants in common, the Land Registry will require a Grant of Probate before they amend the Land Register.

How is my property owned?

To find out how a jointly owned property is held, you need to check the Land Registry title. The property is owned as tenants in common if the section marked ‘B: Proprietorship Register’ contains this or similar wording: ‘No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.’ If there is no restriction then ownership is as joint tenants.

Estate planning

In some cases it is advantageous to your estate for your property to be owned by way of a tenancy in common. It is still possible for someone to stay in the property after the death of the other owner by leaving them a life interest in it. Planning for the future can be a complex area and it is advisable to seek legal advice to ensure that your loved ones are provided for as you would wish.

If you would like to speak to a Wills and estate planning expert, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Coronavirus - LPA

Why a Property and Financial Lasting Power of Attorney is so helpful in times of crisis such as the coronavirus

A Property and Financial Lasting Power of Attorney (LPA) can be an incredibly helpful way of allowing a person you trust to manage your financial affairs if you are not able to do this yourself.

We are all witnessing how our massive sophisticated planet and civilisation can be brought so low by the tiniest organisms and are living through very challenging times.  We will also know people who are self-isolating and who are ill and these individuals are very vulnerable indeed and need all of the help they can get.  An LPA can provide just that help, enabling trusted individuals to carry out key tasks that may just be too difficult for individuals at the moment.

Ideally, an LPA should be executed well in advance of any period of illness or incapacity.  But so long as the person signing the document still understands its full meaning and effect, it is still possible for them to sign a valid LPA.

The benefits of a property and financial LPA

Trusted individuals can (as soon as the document is registered with the court) step into your shoes and carry on your financial life for you, involving you in all decisions but otherwise relieve you of the day to day burden of managing your financial life while coping with the crisis in hand.

The best option is usually to sign an LPA well in advance of when it is needed.  It does not need to be put into force until such time as capacity is lost but you will need to bear in mind that the court will take about 8 weeks to register a document and so the sooner you start the process, the better.

If you would like to speak to an expert in LPAs and Wills, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Avoiding a Statutory Will

Who can write my Will for me if I am not able?

The appointment of an Attorney can help you deal with your affairs once you are no longer able. But they are not allowed to write a Will on your behalf.

By appointing an Attorney under a Lasting Power of Attorney (LPA), you can have someone you trust to deal with both your financial affairs and your health and welfare, should you become unable to manage them yourself.

If you do not make provision for an Attorney to act on your behalf, then your loved ones may have to make a lengthy and expensive court application in order to appoint one if you lose the ability to deal with your affairs.

You can choose to appoint an Attorney to deal with your health and welfare and in respect of your financial matters, or you can appoint an Attorney for only one of these aspects.

With regard to health and welfare, the Attorney can only act for you once you have lost the capacity to make your own decisions. In respect of a financial affairs LPA, you can choose to implement this while you still have capacity. This means that your Attorney could, for example, help you by going to the bank on your behalf if you find it difficult to go there yourself.

If you do not have a Will in place, and you lose the capacity to make one, your Attorney or anyone else cannot write one on your behalf. The process of putting a Will in place in this situation can be complicated and lengthy. An application would need to be made to the Court of Protection by your Attorney, asking them to put in place a Statutory Will.

Applying for a Statutory Will

The Court of Protection will need to see all the details of your financial situation when an application for a Statutory Will is made. This will include details of exactly what is in your estate, your outgoings, for example, care home fees, and also information regarding your family relationships.

The Official Solicitor will act on your behalf to review the information provided and put in place a Statutory Will that they consider to be fair. Anyone who may have expected to receive an inheritance from you can be involved in the process and will have the right to have their views considered.

Avoiding the need for a Statutory Will

By putting a Will in place while you still have the capacity, you can avoid the difficulties of potentially having a Statutory Will. Having a Will drawn up by a qualified professional means that you can be sure that your loved ones will receive what you wish them to have. You can also discuss estate planning, to ensure that your assets are protected as far as possible from expenses such as Inheritance Tax. You may also want to ensure that loved ones have the benefit of living in any property you own for as long as they need to.

If you would like to speak to one of our expert Will writers, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Writing a Will when you don't own your home

Making a Will even when you don’t own your own home…

If you don’t own a property, it is easy to assume that you don’t need a Will. In fact, there are several good reasons why you should still make one.

Leaving a Will can be of great comfort to loved ones, as you can set out your wishes with regard to what you would like to happen after your death. You can also appoint people to take on various responsibilities. If you put your requests in writing in a formal legal document, it can also help avoid disagreements between family members at a difficult time.

What your Will can contain

As well as giving details of who you would like to receive your estate, you should also choose someone to administer your estate. This can be an onerous task, as your assets will need to be collected in, valued, sold, estate accounts prepared and the money distributed in accordance with your Will. If you don’t have anyone prepared to take on this role, you can appoint a professional executor.

Your Will can include your wishes regarding your funeral and resting place, and you can also leave your personal belongings to your choice of beneficiaries.

Looking after children in your Will

Your Will can appoint a guardian to look after any children who may be under the age of 18 and you can also leave money in trust for them and appoint trustees to administer the trust fund.

This means that your children will be able to benefit from the money you leave, at the discretion of your trustees, before they actually inherit it. You can also choose the age at which you would like them to inherit, for example 25, if you feel that 18 is too young.

Why it’s never too soon to write you Will

Even if you don’t own a property or have any children, it is still a good idea to put a Will in place so that your loved ones know what you would like to happen to your estate after your death.

As you go through life, you are likely to accumulate assets and responsibilities, so making a Will now means that you can be sure your chosen beneficiaries will receive what you would like them to have. A well-drafted Will can take account of potential future changes, for example if you become a home owner.

You can also leave a Letter of Wishes, explaining your choices to your loved ones, and even detail what you would like to happen to your online assets and accounts.

It is a good idea to periodically review your Will, particularly in the event of any major life changes, for example the birth of a child. If you get married, your Will automatically becomes invalid, so it is particularly important to write a new Will then.

If you would like to talk to one of our expert Will writers, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Writing a future proof Will

Writing a Will that is future proof

Over time, changes in circumstances can mean that a Will becomes out of date and doesn’t accurately reflect your wishes. We look at how to ensure your Will can cope with changes.

It is a good idea to make a Will, even if you are young. It helps keep your financial affairs organised and if anything should happen to you, it will be of comfort to your loved ones to know your wishes. You should review your Will from time to time, and update it if necessary. But careful drafting will help it stand the test of time.

Executors and guardians

When you write a Will you need to appoint one or more executors to deal with the administration of your estate. This can be a time-consuming and complicated job, so you should ensure that whoever you choose is able and willing to take on the role.

Over time, their circumstances may change however, and if you have appointed more than one executor, along with substitutes, then there is a good chance that even if someone cannot act, one of your other choices will be able to take over.

Similarly, if you are appointing guardians for children who are under 18, then you should consider alternatives in case your first choice cannot take on the role.

Beneficiaries

If you leave bequests to children by name, then babies who are born after your Will is written may be excluded.

It is possible to draft a Will that takes into account future births, and includes them alongside those who were already living at the time the Will was made.

Marriage

Although it is possible to take a number of steps to future-proof your Will, you should note that upon marriage or civil partnership, any Will you have made becomes invalid, unless it was specifically made in contemplation of that marriage or civil partnership.

Change in the value of your estate

Over time, your estate may alter in value considerably, for example if you come into money or if a substantial amount of money is used in care home fees.

This can affect the proportions of any gifts you leave under your Will. Specified sums are paid out first, then the remainder is split between your choice of named beneficiaries. If the amount in your estate decreases, this could leave those inheriting the residue with less than you envisaged them having.

Even if you are confident that you have future-proofed your Will as far as possible, it is still advisable to review it regularly, and re-draft it if necessary.

If you would like to talk to one of our Wills experts, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Pension when you die

What happens to someone’s pension after their death?

Pensions are notoriously complex and different rules can apply to different pensions held by different companies.

After someone’s death, the benefit of their pension may be payable to the person they nominated when the scheme was set up.

Workplace and private pensions

Sometimes a workplace or private pension scheme will provide a lump sum and/or income to your beneficiaries after you die. This will be paid to the nominated person, but it is possible for a dependant to make a claim on the funds if they have been excluded.

When you reach retirement age, you may choose to remove a lump sum of 25 percent of the value of the fund from your pension. If this is still in your estate at the time of your death, then Inheritance Tax may be payable on it, depending on the size of your estate.

You can gift this during your lifetime if you choose, but if you were to die within seven years of making a cash gift, then all or part of its value will be taken into account when Inheritance Tax is calculated.

Leaving pension funds to a beneficiary

Where a joint annuity is held, payments, usually to a spouse or partner, can continue after the death of the pension holder.

If the pension guaranteed annuity payments for a certain period of time, then these will continue to be made to a beneficiary for that period of time.

The pension may entitle beneficiaries to receive a lump sum payment. If the deceased left children under the age of 18 or a dependent partner or relative, then the pension trustees may make the decision to award a payment to them.

Payment of Inheritance Tax

Pension funds are paid at the discretion of the pension trustees and do not usually form part of the deceased’s estate, in which case Inheritance Tax is not payable on their value.

However if the pension trustees are not able to make a decision as to who the pension funds should be paid to, they may make the payment into the estate, in which case the money would be included in the Inheritance Tax calculation.

Following someone’s death, you should speak to their pension provider to find out how and to whom any payments will be made.

Because pensions are such a complex area, it is advisable to take independent advice when writing a Will, dealing with pension funds or administering an estate.

If you would like to discuss your Will or a probate matter with one of our expert team, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Jointly owned property

Leaving a jointly owned property in your Will

If you own a property jointly with someone else and you want to leave it in your Will, you need to understand the different types of joint ownership.

When you buy a home with someone else, you will either own it as joint tenants or as tenants in common. This affects who the property will pass to in the event of your death.

Joint tenants

If you own a property with someone else as joint tenants, then on the death of either of you, the property automatically passes to the other, whatever the terms of your Will.

Tenants in common

If you own property as a tenant in common with another person, then your share in the property will pass in accordance with the terms of your Will.

This type of ownership also allows you to own a property in unequal shares. If you hold a property as a tenant in common, you should ensure you have a valid Will in place so that your interest passes to your choice of beneficiary.

If you don’t have a Will

If you haven’t made a Will, then your share of any property owned as a tenant in common will pass in accordance with the rules of intestacy. This leaves your estate to your closest family members, in strict shares.

If you are married, then your spouse will receive the first £250,000 you leave, together with all of your personal possessions. Of the remainder, half goes to your spouse, with the other half being split equally between any children.

Leaving a life interest in your home

If you own a property jointly, you might want to leave your share to your children, but allow your spouse or partner to live in the property during the rest of their lifetime.

This can be done by severing the joint tenancy, if there is one, and setting up a life interest trust in your Will. It means that the joint owner won’t have to leave the property, but once they no longer need to live there it will pass to the beneficiaries named in your Will.

This prevents any children being disinherited in the case of second marriage, and can also protect your share of any property from care home fees that the co-owner may incur in later life.

Whatever method of property ownership you have, it is always advisable to put a Will in place so that you can be sure your loved ones benefit from your assets after your death. It can also prevent disagreements arising between family members.

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

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Leaving a jointly owned property in your Will…

If you own your home jointly with someone else, you should think about how you want to leave it when you write your Will.

There are two different ways in which you can jointly own a property. Only one type of ownership allows you to leave your share of your home to someone in your Will.

Owning your home as a joint tenant

If you and your spouse or partner own your property as joint tenants, then on the death of either of you, the property automatically passes to the survivor. Even if you leave all of your estate to someone else in your Will, a property owned by you as a joint tenant will become solely owned by the other joint tenant.

Owning your home as a tenant in common

If you hold your property with someone else as tenants in common, then your share of that property passes in accordance with your Will. If you don’t have a Will, then it will be subject to the rules of intestacy, which specify which of your relatives will inherit your estate.

This means that if a tenant in common dies, the surviving owner may be forced to leave the home if the person who inherits the other share wishes to sell.

Writing your Will as a property owner

It is always preferable to write a Will, whether or not you own a property, to ensure that your estate passes to those whom you would wish to benefit from it. If you do own a property jointly with someone else, think about what you want to happen after your death.

If you would like to leave your share to someone else, but you currently hold the home as joint tenants, it is possible to sever the tenancy so that ownership becomes as tenants in common. When you own a property in this way, it is also possible to hold unequal shares, for example one-quarter owned by one person and three-quarters by another. This needs to be put in writing at the time the tenancy is created. You can also put details of how you will agree any sale of the property into this document.

Creating a life interest trust

If you want your spouse or partner to live in the home after your death, but don’t want to give them your share of the property outright, your Will can give them a life interest in the home. This would give them the right to live in the property for as long as they want, but ultimately the house would pass to your choice of beneficiary.

This prevents the ‘sideways disinheritance’ trap, where a second spouse could choose to leave the property to their children, excluding the children of the first marriage.

If you would like to talk to one of our property experts or Will writers, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Can you leave someone a legacy in your Will and also name them as your Executor?

When you’re writing your Will, you will need to choose the right person to be your executor. We look at what being an executor entails and whether that person can also be a beneficiary.

It is important when writing your Will that the executor you name is someone you trust to deal with your affairs after you’ve gone. Estate administration can be a long and sometimes complicated matter and you need to be sure that the person you have chosen is willing to act and capable of doing so.

It is perfectly acceptable for your executor to be a beneficiary as well, in fact this is often the case.

The role of executor

Your executor will be responsible for all administrative matters, starting with funeral arrangements and registering the death with the appropriate authorities. You can choose more than one executor should you wish.

They need to notify all asset holders and other organisations and then collect in and value the assets.

Other ancillary jobs such as putting vacant property insurance in place and making arrangements to check on any property regularly also fall to the executor.

Once the estate has been valued, tax needs to be calculated and paid. This includes Inheritance Tax, Income Tax and in some instances Capital Gains Tax.

Once the estate is in funds, outstanding debts need to be paid and estate accounts prepared.

The final job is to distribute the estate to the beneficiaries. This may involve transfer of assets and gifts of personal possessions as well as cash payments.

The role of beneficiary

A beneficiary will be notified that they have been left something in the Will, but won’t necessarily be regularly updated on the probate process unless there are delays. As well as receiving their named gift, they are also entitled to see the estate accounts.

If no valid Will exists

Where the deceased didn’t leave a Will, their estate passes under the Rules of Intestacy, which state that assets pass to close family members in a strict order. The spouse is at the top of the list, with children next. The person heading the list is entitled to act as executor if they choose. If they do not wish to take on the role, then the next person has the option of doing it.

By ensuring that you have a valid Will in place, you have the chance to appoint your choice of executor as well as ensuring that your assets are left to those you wish to benefit.

If you would like to talk to one of our expert Will writers, ring us on on 01243 216900 or email us at info@legalmatters.co.uk.

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