Tuesday, 3 December 2013

Why Do I need Probate?

One of the most common misconceptions that we come across is that if you have a Will nothing needs to be done after you die and one of the most common questions we are asked is

Why Do I need Probate?

A Will is the document that sets out a person’s wishes for after their death, it will appoint people to deal with their affairs – Executors and will set out how the want their Estate (the things that they owned when they died) distributed. But if the Estate is worth more than £5,000 it is highly likely that you will need to do more.

On the face of it, having a Will makes everything straightforward but if you have been appointed as an Executor for someone who has died you will need to carry out the Estate Administration and the most important part of this is Obtaining the Grant of Probate which will give you the legal authority to distribute the estate according to the instructions in the will.

If a Will has any sort of Trust in it, for example money left to a child or a nil rate band trust then there is yet more to do to ensure that the trust is correctly set up. Inevitably this needs to be done properly to keep the beneficiaries and the Tax man happy, so you will need professional help and advice.

As an executor you answer to the beneficiaries and the potential beneficiaries of the deceased and you are personally liable for any action that you take. The worst thing you can do is – do nothing. 

If you need help or advice with an Estate, or if you have suffered a bereavement and want to know what you should be doing call Will & Probate Services on 01778 382723 and we will help you.   

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Tuesday, 26 November 2013

When senior moments become normal ...

We have all walked into a room and suddenly found that we have no idea why we were there, or what we wanted only to remember as soon as we walked out again, most of us will have written it off as a Senior Moment. The concept of a Senior Moment has become well established in our culture, but we need to look at what lurks beneath these comedy moments.

Sadly for more and more people the Senior Moment eventually becomes normal and they succumb to Alzheimer’s or dementia. This can obviously have very serious consequences for the person who is losing their capacity, but you should not overlook the effect on the wider family. Loss of capacity can mean that a person’s bank accounts are frozen and if they were the main income earner it may mean that the bills don’t get paid. Often loss of capacity can mean that even a joint account is frozen even when one party is still able to make decisions. If you or a loved one ends up in a situation where you can’t make decisions for yourself you could find yourself at the mercy of the Courts or the Local Authority who will make decisions about your financial affairs and your care on your behalf.

The good news is there is a really easy way to retain control – make Lasting Powers of Attorney (LPA). LPA’s mean that the key decisions about your finances and your care are made by your family or others that you trust. Making LPA’s is quick and easy and will save thousands of pounds and hours of stress compared with having to deal with the courts. Call us today (01778) 382723 we will draw up your LPAs. You can also check out our Lasting Powers of Attorney Website or Email advice@will-probate.co.uk

Wednesday, 13 November 2013

Becoming a Deputy - A Big Decision

Could You become a Deputy?

Any decision to become a deputy for a relative, who has lost capacity, shouldn't be taken lightly. You will be taking on serious responsibilities and commitments and you won't be entitled to be paid for their role as deputy, unless the order provides for this (You can recover reasonable out of pocket expenses, usually no more than £500 per year).
If you make an application to become a deputy for a relative, the Court of Protection will decide whether you are suitable. The factors that enable a decision to be made include whether you are reliable, trustworthy and have the appropriate level of skill and competence to make financial decisions on behalf of the person.
If you are thinking about making an application, you should consider the following:-
1. Deputyship can last for a number of years. If the order is made for an indefinite period, it is likely to continue until the death of your relative or until their capital resources run out. Are you able to make such an open ended commitment?
2. Are you good with money? It seems obvious, but If you have difficulty managing your own finances, you may have difficulty managing the finances of another person.
3. Your decisions must be made in your relative’s best interests, rather than what you think is best for them, or what is in your best interests.
4. You need to involve your relative in the decision making, in so far as they are able to participate.
5. You need to be aware of the limits of any deputyship order, particularly if you are thinking of making gifts. If your relative suffers any loss, as a result of your unauthorised actions, or you exceed the powers given to you, or you make unauthorised gifts, you can be personally liable for any losses incurred.
6. You will need to keep financial records and produce an annual report to the Office of the Public Guardian.
7. You must not benefit from the decisions you make, without the authority of the Court’s.
8. It is extremely important that you keep your relative’s finances separate from your own. This means that savings, investments and property should be held on behalf of your relative, and not in your own name. This is important for tax and inheritance purposes.
9. You should seek independent investment advice, from a suitably qualified advisor. This is to ensure that any investments made are suitable and diversified. You must undertake regular reviews, to ensure that investments are still appropriate.
10. You will also be required to seek tax, benefits and estate planning advice, where it is required. You will also need to budget for them and make regular and one off payments, on their behalf.
If you require assistance in applying to become a deputy yourself, we can advise you on the correct procedure and help you with drafting the relevant documents www.deputyship-order.co.uk. 

Tuesday, 1 October 2013

£2.4 Million Pension - That will just get us by!!

The 800,000 babies born in the UK last year will need to save £2.4m into their pension to retire comfortably, while facing rising student and mortgage debt and care costs for their parents. The Office of National Statistics (ONS) recently released figures showing 813,200 babies were born in the UK in 2011/12, the highest number since 1972.

Research by Scottish Widows, recently published in its ninth annual Pensions Report, claimed these babies will need a pension pot of £2.4m to have an acceptable standard of living in old age.

Increasing longevity will heap extra pension costs on this and future generations – who will also be saddled with record student and mortgage debt. Scottish Widows said those who go to university are likely to face debts of £73,000, which they will be paying off until they are 52 years old on average.

Under the new charging system, universities can raise their annual tuition fees to £9,000. Figures show the full cost of a three-year degree course now stands at an average of £25,941. This is likely to continue to rise over time.

Scottish Widows said mortgage terms are likely to be extended as people work longer and borrowers will be at least 61 when they pay them off, four years later than their parents and seven years later than their grandparents.

It adds social care costs are likely to be a major financial concern for this generation, with pressure to contribute to their parents’ care as well as setting money aside for their own – combined, these factors will make it difficult to save the huge pot needed for retirement, despite the fact this generation can expect to continue working well into their 70’s.

If you need any help with your pension planning Willbroker is always happy to recommend Liberty Partnership Chartered Financial Planners based in Market Deeping Near Peterborough. Call them on 01778 342291 or visit their Website

Thursday, 26 September 2013

The Reasons why you might want to update your will

The good news is that more of us are likely to have a will – but if you haven’t got one you still know what you need to do – so this month we look at the top reasons that mean you would need to review your wills.
  1. THE CHILDREN HAVE GROWN UP – you may have made your will whilst your children were young, if you did you appointed Guardians and Executors who may not be the appropriate people to be involved now that your kids have grown up.
  2. YOU HAVE HAD MORE CHILDREN – Ensuring that all of your children are treated appropriately by your will is important. If the child is your first child then you will need to appoint guardians to look after them in the event of your death.
  3. YOU HAVE GOT MARRIED – Many people don’t realise that getting married automatically revokes a Will, so if you have tied the knot since you made your will you probably need to do it again.
  4. YOU HAVE GOT DIVORCED OR YOUR RELATIONSHIP HAS SPLIT – Whilst the law does make provisions for dealing with a former spouse within a Will, it is always better to make a new one. If you have split from a partner that you were not legally married to and have not updated your Will then things are potentially even worse as there is nothing to stop them from inheriting.
  5. YOUR FINANCIAL CIRCUMSTANCES HAVE CHANGED – Let’s be positive, you may have won the lotto or have received an inheritance which could impact the tax planning in your will. On the other hand if your wealth has decreased you might need to review gifts and beneficiaries who you named in better times. 
  6. SOMEONE NAMED IN YOUR WILL HAS DIED – The loss of a loved one is a difficult time, but if that person was named in your will as an Executor or Beneficiary then you will need to update your Will. 
  7. SOMEONE NAMED IN YOUR WILL IS ILL - If your beneficiaries, executors or guardians become ill or lose capacity it is important that you review your Will, any gifts you might give could affect benefit or care packages. Your executors or guardians may not be able to act because of their incapacity. 
  8. YOU HAVE STARTED A NEW BUSINESS – Planning in your Will for what happens to your business can be very important, most businesses attract significant benefits when it comes to taxation and it is important that your Will reflects this.
  9. YOU HAVE ACQUIRED FOREIGN ASSETS - Assets overseas are likely to be treated differently to your UK assets when you die, your will may well need to reflect this.
  10. YOU HAVE MOVED – Whilst it is not the most compelling reason to review your will, the people who drafted it for you need to know where you are in case they need to contact you to advise about changes in legislation. If you have any property gifts or trusts in the Will we need to check the basis of ownership on the new property to ensure the gifts are still effective.

If you need to review your Wills, if one of the issues above affects you or if your documents are simply out of date call Will & Probate Services on 01778 382723 for a free opinion on what needs to change in your will. See our site www.will-probate.co.uk for more

Friday, 13 September 2013

HMRC Publishes Guidance on non deductible estate debts.

From STEP - The society for trust and estate practitioners

Thursday, 12 September, 2013

HMRC has published guidance on s176 of the Finance Act 2013, which prevents executors deducting certain liabilities of an estate from its taxable value.
The surprise measure was introduced in the Finance Bill 2013 without prior consultation. The liabilities affected are, briefly, debts incurred by the deceased in order to purchase inheritance tax (IHT)-exempt assets; and debts that his executors do not pay off on his death.
According to HMRC, the measure was necessary to counter certain IHT-avoidance schemes, but professional bodies have sharply criticised it because it may cause serious problems for existing arrangements that were not set up to avoid tax. They are also disappointed that there was no consultation before the legislation appeared, though HMRC claims the period between publication of the Finance Bill and its enactment into law was an adequate substitute for a formal consultation.
In a document issued last week, HMRC stated that the inheritance tax manual will be updated to take account of some of these objections; in the meantime interim guidance has been issued.
One of the main criticisms voiced noted that the legislation required that a liability can only be deducted from the taxable estate if it is discharged from the deceased’s estate. This could give rise to a situation in which a testator set up a life policy written in trust to pay off his mortgage on death, but HMRC refuses to allow the mortgage to be deducted from the estate because the estate funds are not used to repay it. This would hit those who have incurred liabilities on purely commercial terms just to buy a home, and with no IHT avoidance in mind.
HMRC’s reply to this is that the deduction for the mortgage would indeed not normally be allowable. However, it adds, there is no reason why the trustees could not refinance the debt so that the estate passes to the beneficiaries encumbered with a new liability.
Retrospection was a further widely expressed criticism, as the measures apply to pre-existing liabilities, affecting many businessmen and farmers who had borrowed in the past to expand their business and secured the loan against their personal property. HMRC disagrees that the provisions are retrospective, but says it recognises that borrowers who have done this may not be able to restructure the loan or unwind the arrangements quickly. Thus the commencement provisions have been amended so that they will not apply to liabilities incurred to acquire IHT-exempt (relievable) property before 6 April 2013 ‒ although the retrospective action continues to apply to the other types of liabilities.
The original text was also unclear about whether the status of the property (i.e. whether it was excluded as a liability) should be considered at the time of purchase, or when the tax charge occurs. Section 162A of the Act has now been rewritten to clarify that the status has to be considered when the liability is taken into account, and also to deal with situations where property ceases to be, or becomes, excluded property.
Other critics noted that it was not clear whether the term ‘estate’ meant just the free estate or whether it included the wider meaning of estate for IHT purposes, for example settled property, or lifetime gifts with reservation of benefit. Accordingly the Bill was amended to state that ‘estate’ has the wider meaning for the purposes of repaying the liability.
Another criticism was that the Bill did not state how a liability should be treated on submission of the IHT400 form ‒ that is, whether it should be allowed in the initial computation, to be disallowed if not discharged subsequently. There were also concerns that personal representatives would have to produce evidence that any liabilities were repaid in all cases. HMRC has now stated that its assumption will be that a liability will be repaid, and PRs will only need to provide evidence of repayment if HMRC enquires into the liability.

Thursday, 20 June 2013

Why Your Parent's Wills are more important than yours.

I am going to encourage you to have a difficult conversation – a conversation that, I have been told, will make you feel uncomfortable, prying, greedy and grasping – but a conversation that is essential.

So here goes – Talk to your parents about their death, what they want to happen when they die, what their Wills say, what their funeral wishes are and how they want to be remembered. Talk to your parents about the period running up to their death, what happens if they get ill, who they want to make the important decisions about care and life sustaining treatment, and what they need to do to ensure that these things happen.

Hopefully you know by now that you need to make a Will, maybe you have even done it, but the fact remains that 50% of people die without a Will often assuming that everything will automatically pass to their spouse or children and your parents could be among them.

When you have the conversation, ask yourself, do you need their money or would it be better to pass to your children or grandchildren. There might be tax implications if you receive the money that could be avoided by skipping a generation or two. Ask them what they have done to protect their assets against Tax and Care Costs, to ensure that probate will be quick and efficient after they have gone.

Above all ask them to have a family meeting, preferably with a qualified advisor who will guide them through their options and ensure that all of the family understands and ‘buys in’ to the planning that needs to be done.

Your parent’s Will and end of life planning is more important than yours, ask them to review it today – even offer to pay – it will save you time, stress and grief in the long run.

As ever for more call us on 01778 382723 or e-mail Willbroker  

Thursday, 23 May 2013

Jailed for trying to care.

A woman, who is understood to be the first person to be imprisoned for contempt of court by the Court of Protection, has claimed that the judge would never have dared to jail her if the case had been made public, according to a report in the Daily Mail. Wanda Maddocks, was sent to Foston Hall prison for six weeks in September 2012 after trying to release her chronically ill father from a care home in Stoke-on-Trent. The Court of Protection had ruled Alzheimer's sufferer John Maddocks must remain in care because “the plans his four children made were considered inadequate".

The jailing, which was not officially disclosed, has raised concerns amongst MPs around secrecy, said the Daily Mail, with former care minister Paul Burstow calling the decision an "extreme conclusion". Wanda Maddocks was reported to have believed her elderly father would be better off in her care and took him to her home in Turkey. The pair returned after three months because they could not access his pension or savings. She said social services agreed to release John from the care home if the family provided evidence of suitable arrangements. The court rejected four submissions.

This is an extreme case, but the Daily Mail also went on to highlight a further case where a client under the court’s protection had lost £100,000 in fees. It is not a new phenomenon: in 2009 Betty Figg, aged 86, was wheeled away from her daughter’s home in Coventry after social workers, accompanied by police armed with a battering ram, swooped on the daughter’s home after accusing her of abducting her own mother. The shocking video of the moment she was taken from her daughter can be seen on YouTube

In terms of managing people's financial affairs and welfare, the Court of Protection can make orders that must be obeyed like the orders of any other court. However, these types of issues can be avoided with some advanced planning. Had John Maddocks made a Lasting Power of Attorney appointing his children to act as attorneys for his Personal Welfare and his Property and
Financial Affairs, the family could have made decisions about his care and the courts would never have been involved.

Rather than leaving things up to the courts and your local authority, you can ensure that your loved ones are the ones to make decisions about your care and your finances. If you would like further information about Lasting Power of Attorney, or making an application to the Court of Protection, call Nick Ash at Will & Probate Services on 01778 382723.

Thursday, 14 February 2013

Care Costs what the new rules mean.

Smoke and Mirrors – How the Government Put a Positive Spin on A Cost Increase.

There has bee a great deal of comment in the last week about paying for long term care will be capped at £75,000. This announcement was initially welcomed with a fanfare in the press, but it has already started to unravel.

What the government has said, and what it means –

  • Nobody will be forced to sell their home to pay for care in their lifetime.

Local Authorities will extend the current deferred payment scheme with legal charges that will be paid off after a person’s death.

  • There will be a cap on Care Costs at £75,000.

This does not acknowledge that ‘Hotel Costs’ will have to be met. The figure of £200 per week for hotel costs was in the original Dilnot report as was a fees cap of £35,000. However the proposed hotel costs cap is now  £12,500 per year indefinitely plus £75,000 per person (which is about 4 years care) means that you will pay out £125,000 in the first 4 years and only £12,500 every year thereafter.

Curiously the last figures I saw that gave an average length of stay in a care home said it was 4 years.

If you contrast the average care home cost of £550 per week at the moment or 114,400 over a four year stay the net loss to the person in care under the new scheme is £10,600.

  • The lower asset limit will be raised to £123,000.

No arguments from me this is a good thing, a rise from £23,500 at present so people will get to keep a bit more of their hard earned cash.

The last thing to say is that these are only proposals at the moment and they won’t come in until 2017 at the earliest (Parliamentary Time and Elections permitting). So you still need to be giving your clients high quality advice on protecting their property, and Writing the Right Will.

Call us in 01778 382723 to see how Will & Probate Services can help you to help your clients. www.will-probate.co.uk

Monday, 4 February 2013

The Joys and Perils of Cycling - Accidents always happen to someone else.

Sunday morning rushing through the woods near Wansford, the ground is wet, the mud sticky and the roots are slippery, a winter of rain and floods has made the local woods a testy place to ride. The mud is not too deep to go fast but it fills the grooves on your tyres making bike handling a premium lots of sideways action when you hit the roots wits and faith in your own ability is needed to get through today.

Leading the charge is Dave, I am close behind to the rear are ten others sweeping through the woods all having a great time facing Sunday’s biggest challenge. Then it happens, a call through the trees - Paul’s down, haul on the brakes turn back the way you came hope it’s not serious but this time it is. Unconscious and immobile it looks bad and 30mins later as the Air Ambulance lifts off we know it is, eleven guys look at the floor, all thinking it could have been me.

The ride back is slow, over cautious the talk is about what happens next – he will be OK financially because he owns a company with five staff. But we are all concerned for his health, a whack to the head and a neck injury can’t be good.

Days in an induced coma, weeks in the HDU getting better but slowly. Months later he’s out he won’t be riding – he’s sold his bike. His business has closed down, staff redundant, receivers called in not because there was no work but because nobody had the authority to run the business. Whilst he was incapable of making decisions they went unmade, nobody could pay the bills or the staff so they went unpaid, there was nobody to sign new contracts so the went unsigned and elsewhere. He knew a Lasting Power of Attorney could have given the authority to run his business to his Wife or even his manager but he didn’t put one in place.

I asked him why and he said – ‘Accidents always happen to somebody else.’

Even younger people need to think about Lasting Powers of Attorney – don’t put everything at risk because it always happens to someone else. Call us 01778 342723 or www.will-probate.co.uk we can help.