Category Archives: Estate Planning

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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Big rise in contested estates attributed to DIY wills…

The continuing rise in numbers of contested Wills is being attributed to more and more people attempting to write their own Will.

The number of cases heard by the High Court went up from 227 in 2016 to 282 in 2017 and 368 in 2018.

Drafting a Will

Drawing up a valid Will can be a complicated undertaking. Matters to be considered include whether to leave beneficiaries lump sum gifts or a percentage of the estate, who will inherit first if your estate is smaller than expected, how to ensure first and second families are both provided for, even if you die before your new spouse and how to minimise Inheritance Tax liabilities.

A small error made in drafting a Will can mean that it is invalid. If this happens, then there is a risk that the estate will pass under the rules of intestacy. This details which relatives will receive the estate and in what proportions. Unmarried partners and stepchildren do not inherit anything under the rules.

Why a Will might be challenged

If the wording of a Will is ambiguous or the wrong terminology is used, there may be an opportunity for someone to challenge it in court. Even the incorrect execution of a Will by the signatory and witnesses can mean that a Will is invalid. Mistakes are easy to make in this complicated area, with the risk that will result in a long and expensive court case.

What happens if a Will is challenged

Dealing with a death can be difficult and when family members feel that they have not been left what they felt they were entitled to, problems can arise. When emotions run high, if there is ambiguity or an error in the Will, then they may take the opportunity to bring a legal case. These can take years to resolve and are likely to be expensive. Saving a few pounds now by drafting your own Will can result in the loss of thousands later on if the Will is proved to be invalid or ambiguous.

Why a professionally drafted Will is always recommended

Speaking to an expert Will writer allows you the opportunity to explain exactly what you would like to happen to your estate. If, for example, you have remarried and you would like your spouse to live in your home after your death, but ultimately want it to pass to your children, a professional will be able to explain to you how this can be done and draw up a Will that you can have confidence in.

They will be able to help you avoid pitfalls, such as leaving cash gifts that might reduce your residuary estate far lower than you anticipate and will be able to translate your wishes into a legally binding Will. When a Will has been clearly thought out and well drafted, it significantly reduces the risk that your family will start to wonder if it was exactly what you meant to do.

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

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Help with will writing or administration

Administering an estate when the Will creates a trust…

When someone dies leaving a Will that creates a Trust, it can have implications for the person dealing with the administration of the estate.

A Will may leave property or assets to a Trust so that an individual may benefit from them during their lifetime without actually owning them. For example, the deceased may have wanted their partner to be able to continue to live in their home, but might want it to pass eventually to children. Or they may want to leave money to children for their maintenance and education.

Estate administration and Will Trusts

The need to set up a Will Trust doesn’t alter the need for an executor to obtain probate. In some cases, where the assets fall below a certain threshold, probate might not be required.

Setting up a Will Trust

The executor is responsible for creating the Will Trust. They will ensure that assets are properly transferred to the trust and that the trustees named in the Will have access to them and are aware of their obligations under the terms of the Will.

Once the assets have been transferred, the trustees will be responsible for looking after them and distributing them to the beneficiaries as specified.

Types of Will Trust

A Life Interest Trust gives a beneficiary the right to benefit from an asset during their lifetime. This could include maintenance payments or living in a property. Once the beneficiary has died, the assets pass in accordance with the terms of the original Will.

A Discretionary Trust gives the trustees the right to distribute funds to named beneficiaries as they see fit. For example, there may be a request to fund education or provide a lump sum towards the purchase of a home.

Money held in Trust for a Minor will be looked after by the trustees until the child reaches the age specified in the Will. This doesn’t have to be 18 – it may be 21 or 25 or even older if the deceased wished.

A Nil Rate Band Trust may have been included in a Will as part of Inheritance Tax (IHT) planning. While it is no longer a requirement, older Wills may still contain this type of trust, which transfers assets amounting to the maximum sum the deceased could give under a Will without being liable for IHT.

Help with Will drafting and administration

Creating a valid Will that does exactly what you want and makes the best use of assets in the light of IHT and other considerations can be complicated.

Dealing with the administration of a Will and setting up of a Will Trust may also have tax implications. Obtaining professional advice means that you can be sure that assets are maximised.

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

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Funeral arrangements

Who has the legal right to organise a funeral?

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

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

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

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

When disagreements arise

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

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

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

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

The importance of leaving a Will

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

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

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

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

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

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Starting a family

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

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

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

When parents don’t make a Will

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

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

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

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

Writing your Will when you’re a parent

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

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

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

Appointing trustees

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

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

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