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 email@example.com.
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 firstname.lastname@example.org.
When making a Will it is essential to have the legal and mental ability to understand the document and its effect. Without this, a Will is invalid and cannot be used. In the absence of any other Will, the estate would then pass under the Rules of Intestacy.
A survey of family solicitors carried out by insurer Direct Line found that lack of testamentary capacity was a common cause of a successful challenge to a Will’s validity.
We look at the legal requirements to satisfy this requirement.
The criteria for testamentary capacity
The person making the Will must firstly understand the nature of making a Will and its effects.
Secondly, they need to understand the extent of the property of which they are disposing.
Thirdly, they need to be able to understand and appreciate the moral claims that people may have on their estate, for example those who they support or those who have been promised something and who may have acted on that promise to their detriment.
Finally, they need to have no disorder of the mind that prevents them understanding what is right or stops them exercising their natural faculties.
When testamentary capacity is challenged
If testamentary capacity is challenged in court, then evidence would be needed from witnesses who could attest to the deceased’s mental capabilities as well as their ability to understand the Will and the claims others might have on their estate.
Expert witnesses could be called, such as doctors, who may have known the deceased at the time the Will was written.
The court will also look at anything the deceased may have said with regard to distribution of their estate.
Avoiding a legal challenge for lack of capacity
Court action can be lengthy and expensive for all involved. It is worth taking the time and trouble to put a valid Will in place before there are any doubts as to testamentary capacity.
If a Will is drafted professionally, then the Will writer will take the time to discuss matters thoroughly with you and make their own assessment of your capacity. They can make filenotes, to be kept at their offices in case they are ever needed, confirming their belief that you were capable of making a valid Will.
If the case ever came to court, they would be able to give evidence as an experienced Will writer that in their assessment you had testamentary capacity.
Should they believe that a case is borderline, they may also ask for a medical professional to become involved to provide additional evidence.
If you would like to talk to one of our expert Wills lawyers, call us on 01243 216900 or email us at email@example.com.
A Lasting Power of Attorney (LPA) allows you to appoint an attorney to deal with your affairs once you are no longer capable of doing so yourself. If you do not have an LPA, then your family will have to apply for a Deputyship Order to allow someone to help you.
There are two types of LPA: one for dealing with your property and financial affairs and one for your health and welfare.
You can choose a different attorney for each LPA if you wish, and the document will not come into effect until it is registered, allowing you to execute it well before it is needed.
If you don’t have an LPA
If you become unable to manage your affairs and you have not executed an LPA, then your family will need to apply to the Court of Protection for a Deputyship Order to appoint a deputy to act on your behalf.
This application can take several months to process and will need supporting evidence, such as a medical assessment.
It is also an expensive procedure, with court application and hearing fees of several hundred pounds each, medical assessment fees and, if a professional deputy is appointed, their ongoing charges. There will also be legal expenses if your family need help navigating the process.
In contrast, the cost of executing an LPA is relatively low, and the registration fee is currently £82.
Why an LPA is the best solution
As well as being a difficult, expensive and time-consuming process to appoint a deputy, it can mean that for a time no-one is able to help you with your affairs.
If you have become unable to deal with them yourself, there may be several months when your finances cannot be managed. This can be a big strain on those trying to help you, particularly if bills need to be paid or services ordered.
With regard to your health and welfare, the Court of Protection prefers not to appoint a deputy to act in respect of all of an individual’s health and welfare needs. The court will rule on single issues if agreement cannot be reached, but generally a collaborative approach is preferred, with family and healthcare professionals acting together.
Therefore if you want to choose someone to act for you in health and welfare matters, you should execute an LPA in their favour. It will not be used until and unless you become unable to make your own decisions.
If you plan in advance and execute LPAs, you also have the option of appointing more than one attorney and including back-ups in case they are unable to take on the role. You can talk things through in advance with them and explain what you would like them to do for you.
To speak to one of our expert solicitors, call legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
When you lose someone you love it is always a difficult time. Having to deal with the paperwork involved in administering an estate after a death – and when you’re grieving – can be extremely upsetting.
That’s why at legalmatters we will always try to make the process as pain-free as possible for you – and why we’re always delighted to hear from a client when we’ve helped a family or an individual through such a stressful time. So thank you Jane for your kind words.
“Thank you and Megan, and all in the office staff for making my journey – sorting my dad’s estate through yourself and legalmatters – a professional, reassuring and stress free time. It’s been a pleasure and I would highly recommend you to friends.”
Signing a Lasting Power of Attorney (LPA) document authorises someone to deal with matters on your behalf, should you become unable to do so yourself.
There are two types of LPAs, one covering property and financial affairs and one covering health and welfare.
It is possible to ask your attorney to deal with your property and financial matters while you are still capable, for example if you have limited mobility and find it difficult to get to your bank. Your health and welfare matters can only be dealt with by your attorney once you can no longer make decisions for yourself.
You can choose to sign only one type of LPA if you wish.
Who should you appoint?
You should choose someone whom you trust implicitly, as they will potentially have a great deal of say over your life and financial affairs.
Your attorney needs to be aged 18 or over and in respect of a financial and property LPA you cannot appoint anyone who has been declared bankrupt or who is subject to a debt relief order.
If you do not feel that you have a family member or close friend who can act on your behalf, it is possible to appoint a professional such as a solicitor, who will charge a fee to deal with your affairs and who will be under a duty to act in your best interests.
Once your LPA is registered with the Office of the Public Guardian (OPG), your attorney will be supervised by them. This could include a visit to you or contact to ensure your attorney is acting effectively. After the first year it is likely that the supervision will be fairly minimal.
What your attorney needs to know
You should ensure that your attorney is happy to be appointed, and that they know what responsibilities this will entail. For example, they will be required to submit an annual report to the OPG explaining the reasoning behind the decisions they have made on your behalf and why they believe the decisions were in your best interests, as well as submitting financial details such as bank statements.
Give your attorney as much information up front as you can, letting them know what you will expect them to do for you and the scope of what they will be dealing with.
Let them think it through carefully and without pressure so that they can make the right decision. If they do choose to act, then discuss your wishes with them so that when the time comes, they will know how you would like them to proceed.
It is a good idea to have a second-choice attorney in place, in case your first-choice is unable or unwilling to act when you finally need them to.
If you would like to discuss appointing an attorney, call legalmatters on 01243 216900 or email us at email@example.com.
Nearly two million people are due a refund after the Office of the Public Guardian (OPG) overcharged for registering a Lasting Power of Attorney (LPA).
An LPA gives someone the right to manage your affairs after you become incapable of doing so. You can execute an LPA in respect of your health and welfare and/or in respect of your property and financial affairs.
The Ministry of Justice has announced that the OPG overcharged those who registered an LPA between 1 April 2013 and 31 March 2017, and that they are entitled to a refund.
So far only 200,000 claims have been made out of 1.8 million who are qualified to do so.
Making a claim
Either a donor or an attorney can make the claim. They will need to supply the donor’s bank details, as the payment will be made to the donor. A copy of the LPA should also be included.
The claim form can be accessed via the government information page https://www.gov.uk/power-of-attorney-refund. In some cases, including where the donor does not have a bank account or the applicant is a court-appointed deputy, the claim will need to be made by phone by calling the helpline on 0300 456 0300, option 6. The deadline for claims is 1 February 2021.
How much will be refunded?
The amount of the refund will depend on when the LPA was registered, as fees paid differed over the time period in question.
Date Fee Paid Refund
April to Sept 2013 £54
Oct 2013 to March 2014 £34
April 2014 to March 2015 £37
April 2015 to March 2016 £38
April 2016 to March 2017 £45
A claim can be made for each LPA registered. Interest will also be paid at a rate of 0.5 percent.
Who needs an LPA?
It is advisable for everyone to take the time to make an LPA, so that in the event they become unable to manage their affairs, either through illness, injury or incapacity, their chosen attorney can step in to help.
In the absence of an LPA, application would need to be made to the court, which could be an expensive and time-consuming process. This could also mean that you might not have your first choice of attorney acting for you.
You can execute an LPA, then keep it until such time as it is needed, at which point it is registered with the OPG.
If you would like to talk to one of our expert lawyers about drawing up an LPA, call legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
A trust is a legally binding arrangement where an individual or group (settlor) delegates the management of money or assets to another person or an organisation (the trustees), who in turn passes them to a person/people (beneficiaries). Here’s more information on trusts, why people set them up and the sort of trust funds available in the UK…
When people set up a trust
The money or assets involved in a trust are usually designated to support a person who can’t manage money, such as a child or a person with limited mental capacity or a learning disability.
A trust may also be used in reverse. This is when your own money is used to look after you if you’re unable to look after yourself due to an illness or disability.
The costs of setting up a trust
As trusts can be complex, they should really be set up with professional help to avoid any costly mistakes. Usually, setting up a trust costs around £1,000, but if you’re setting up a trust for a disabled child there are a number of charities, such as Mencap, offering contribution schemes to assist with the financial aspect.
Reasons for setting up a trust
There are a number of different reasons why families, groups and organisations may set up a trust, some of which include:
- Protect those who are unable to control their spending
- Protect family assets and keep them in the family
- Safeguard assets against bankruptcy
- If the beneficiary is a child or someone with a learning disability (including adults)
- A company distributing pensions over the duration of an individual’s employment.
There are many different types of trusts, although bare or absolute trusts are the most popular type of trust that people can set up in the UK. The settlor transfers money or assets to the trust for the trustees to look after and, when the beneficiary turns 18 years old, they receive all the assets and money from the trust.
An interest in possession trust involves the trustees transferring all trust capital to the beneficiary for a fixed period of time – usually for the rest of their life. The beneficiary is then known as a ‘life tenant’ and the trust is known as a ‘life interest trust.’ The interest in possession will end when the life tenant dies and the ‘capital beneficiaries’ (usually the children when the income beneficiary spouse dies) inherit the capital of the trust.
To find out more about Trusts, and help in deciding which is best for your own circumstances, give us a ring on 01243 216900 or e-mail us at email@example.com.
A living Will (or an advance decision as it is also known) allows you to make a decision about refusing medical treatment in the future. It means that if you are ever in a position where you cannot communicate your wishes, medical staff know what they are. This can even include a decision not to receive certain life-sustaining treatment.
An advance decision is a legally binding document. However, if your family or medical staff are unaware you have prepared one, then your wishes may not be honoured.
This was the case for Brenda Grant. Brenda suffered a stroke in 2012 and although she had prepared an advance decision stating that she did not want certain treatments, she was fed artificially for two years.
In this case the hospital was in possession of the advance decision but had misplaced it.
Whilst Brenda had informed her doctor of her decision, she had not told her family, so it was only when her doctor flagged it up two years later that her wishes were finally respected.
If she had chosen to prepare a lasting power of attorney (LPA) instead, this situation could have been avoided.
An LPA for health and welfare covers a wide range of issues relating to the care of an individual if they don’t have the capacity to make decisions for themselves.
Though it is a legal document just like the living Will, it must be lodged with the Office of the Public Guardian in order for it to be recognised. This ensures that it will be recorded on a national and searchable register. One or more attorneys (normally family members) must be appointed to make the decisions, so in the event of you not being able to make them yourself, there is less risk that your wishes will not be known.
An attorney must make decisions that are in the best interest of the donor (the person who the LPA relates to). The donor can detail what their preferences are and list any instructions for specific circumstances.
Whilst it is possible to have both a living Will and an LPA for health and welfare set up, the latter will take precedence should a conflict arise.
At legalmatters we’re always happy to discuss our clients’ needs and to answer their questions. Call us today on 01243 216900 or email us at firstname.lastname@example.org.
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We all know that writing a Will is the best way to ensure your assets are passed on exactly as you choose after you die, but there are some instances when a Will might be challenged. They say knowledge is power, so now you know…
‘Lack of testamentary capacity’ – in other words, challenging whether the person was of sound mind when writing the Will. Essentially, in order to pass this test, it should be demonstrated that the person was aware that they were writing a Will, the value of the estate and that they understood the consequences of including or excluding people from the Will.
There are grounds to believe that it is invalid. There are all sorts of different reasons that can be given, from failing to sign it, failing to ensure it is witnessed and precisely who those witnesses are.
‘Lack of knowledge and approval’, which is where it’s believed that the person was not completely aware of the contents of the Will. An example here may be if a person who helped to prepare the Will is left a substantial gift.
Written under undue pressure or duress, or if you believe it is fraudulent or has been forged.
It does not reflect the actual intentions of the testator (the person whose Will it is) – perhaps because of a clerical error, or because the person preparing the Will failed to understand their wishes.
‘Reasonable financial provision’ has not been made for those left out of the Will. However, success of such a claim is dependent on proving that they could reasonably have expected that their living costs would have been met by the deceased.
To avoid challenges to your Will, it’s always best to work with those who really know what they are doing. Legalmatters can help, we’re always happy to discuss your needs and to draw up a properly written Will which will reduce the chance of dispute. Call us today on 01243 216900 or email us at email@example.com for further details.