How Do You Trust Your Will Writer?

Some people choose to write their own will or use a cheap on-line service. The problem here is the document will only be as good as their knowledge! The wrong type of will could be chosen, or vital facts not considered. This could cause considerable distress to loved ones or a loss of money from the estate. There are a group of clients who would not be happy unless they saw a solicitor for their will or Power of Attorney.
Surprisingly, the Will writing industry is not currently regulated, but this does not mean there isn’t an increasing demand for Will writers to become regulated.
It’s apparent that the number of ‘cow-boys’ out there has increased and there are some stories where a Will, which the client thought to be professionally written, either did not correctly state the clients wishes or failed completely. In this circumstance, there is very little the client can do. Additionally, I have seen excellent wills written by will writers and appalling ones written by solicitors!
Understandably, these facts make clients very nervous about writing their Will; sometimes to the point where they put off writing their Will altogether. The biggest concern for clients is trusting the professional sat in front of them.
The House of Commons have recently been driven to delve into this issue a little deeper and have taken a look at the pros of cons of adding regulation for Will writing. The decision to exclude Wills from the original Legal Service Act was by no means unanimous – there were many arguments put together to try to force regulation. At the time, the Government responded to these arguments by suggesting that voluntary regulation would suffice.
Whether you are pro-regulation or not, what is clear is that these questions are rearing their head again and it is definitely advisable for Will writers to opt for voluntary regulation. We would expect that regulation will be considered again within the next 5-10 years.
Until then, the best procedure for a client is to check the will writer belongs to a professional body such as The Society of Will Writers or IPW. Members must continually train throughout the year and any complaints would be taken seriously.
Also check your will writer has P.I. (personal indemnity insurance). Look at their client testimonials, these will give a good oversight.

RESIDENTIAL NIL RATE BAND-INCREASED IHT THRESHOLD – DO YOU QUALIFY?

Remember George Osborne?  Yep, the one who was Chancellor for a while and who promised to raise the inheritance tax threshold for married couples to £1 million?  Well in typical political style, he sort of kept his promise when he announced in summer 2015 that he was introducing the grandly titled Residence Nil Rate Band (RNRB for short!)

The RNRB is arguably the most complicated introduction to our tax system in (at least) a generation. The new allowance will certainly see some people benefit from the long-awaited increase in the amount of their hard-earned cash they can pass to their loved ones free of inheritance tax (IHT).  Provided that their loved ones receiving the required interest in their home are “lineal descendants” and that the gift to them is absolute.  Oh and that they have a main residence or had one in the past.  There are other conditions but we will skirt round those for now…

This is marvellous news if you have lineal descendants and if it is appropriate to leave an interest in your residence to such descendants with no strings attached.

However, the limits on the availability of the new relief are a problem for people who have children/grandchildren (even step or foster children) who might not be capable of taking control of such a gift, perhaps where they are disabled or just not great with money.  Whereas trusts would usually be favoured to afford some on-going protection, using such arrangements eliminates the availability of the relief.

Which leads to the question – Are we introducing, through the back door, forced heirship rules here?  They have them in Scotland and our continental cousins are au fait with such provisions but in England and Wales, we have always had freedom of testamentary disposition.  Well, the RNRB takes a bit of that freedom away.  The cost of securing the additional relief is that you cannot freely decide who gets part of your estate and how.

Then we have the issue of discrimination.  A strong assertion but a fact.  Those who do not have qualifying lineal descendants do not get a look in on the RNRB.  Those who have lost children, who have never been able to have them or indeed have not wanted them, lose out.

Ultimately, the RNRB is not as generous as it first looks but most of all it is unfair, excludes some from benefiting, and leaves others with a lack of free choice on how they gift their estate.

All is not as the headlines would have you believe and even those that do qualify for the relief on the face of it need to make sure that they do not fall foul of other conditions that are not covered here.

 

Children under 18?

Currently in the UK, only 67% of adults have a valid Will, and whilst not all of them will have needed to appoint guardians for their children, it is certainly something that many of them will have considered. Deciding who you would like to bring up your children is likely to not be easy. However the thought of knowing that someone you trust will be looking after them after you’re gone should certainly bring some comfort to the matter. After all, the alternative is letting the courts decide on their guardians, something that surely any parent would wish to avoid.

The appointee will only become the child’s guardian if at the death of the testator:

  1. No parent with parental responsibility survived him; or
  2. There was a residence order in his/her sole favour relating to the child.

Without any guardians in place, under Section 5 of the Children Act 1989 the courts can appoint guardians for a child if there are no parents with parental responsibility, i.e. not named on the child’s birth certificate. Guardians may also appoint a successor, and this is not something that needs to be done in the testators Will.

When appointing guardians in your Will, you should always seek consent of those you wish to appoint, prior to naming them in your Will. The loss of a friend or family member can be shocking enough without unexpectedly having to take on the responsibility of children.

Having appointed guardians for you children, you should also think about writing a letter of wishes to lay out how you want your children to be raised specifically. You can express how you wish for your children to continue with certain activities such as music lessons, or afterschool clubs. Other examples may include guidelines as to religion, or their education. It should however be remembered that a letter of wishes is just that. It is not legally binding and cannot be enforced and as such it is advisable that when appointing guardians, you choose somebody who will follow the wishes you have set out.

ARE YOU DIVORCED OR SEPARATED? WHETHER YOU HAVE A WILL OR NOT, READ ON…..

When a marriage or relationship breaks up, you have plenty on your mind. What would happen if you died is probably something you don’t want to think about, but a few minutes’ attention now could save more heartache later on. “I’m not divorced, but I’ve left my husband.” “My wife walked out on me.”

These are very difficult situations. You are still legally married, however bad your relationship. A separation has no effect on a Will – so your husband or wife could still inherit under your Will, no matter how long you have been apart.

If you started another relationship after parting from your spouse, you may want to think about making a Will providing for your new responsibilities. A partner to whom you are not married cannot inherit from you unless you make a Will providing for him or her, and they may have to go to court to get provision from your estate.

EFFECT OF DIVORCE If you have made a Will before your divorce your Will is still valid, but this creates a number of problems. Many married couples appoint each other as executor and leave their estates to each other, either alone or to share with the children. Divorce cancels the former spouse’s appointment as executor and all gifts to him or her in the Will, although other gifts remain valid. If the spouse was given the larger part of the estate, this means that, after divorce, there is no one to inherit this property and the Intestacy Rules will apply. So a divorced person with children would find that his or her estate would go to their children. However, should that person and his or her children die together – say in a car crash – the estate would go to the children’s next of kin – probably the former spouse. This may or may not be what you would wish.

OWN A HOUSE TOGETHER? _Many clients I see are  unaware of the following:

IF A HOUSE (OR SAVINGS/BANK ACCOUNTS) ARE OWNED JOINTLY, IF ONE PERSON DIES THE OTHER AUTOMATICALLY INHERITS! THIS IS DESPITE WHAT A WILL MAY SAY OR EVEN IF ONE EXISTS AT ALL.

There is a way around this but this is where professional advice is needed as each case is unique.

Bottom line is, if you, your relative or friend is separated/divorced seek professional advice with regard to your estate passing safely to the people you wish.

Why Have a Health and Welfare Power of Attorney?

Capacity to manage your affairs can be lost for many reasons, such as a sudden accident or medical condition. With over 850,000 people in the UK currently living with dementia (and rising) ensuring your loved ones have the ability to make decisions for you is essential.

Many people understand the advantages of making a Continuing Power of Attorney for financial affairs, often viewing this type of POA as being the most important to have in place and putting off a Welfare POA until a later date.

But is that really the right thing to do?

Ask yourself this – What would concern you most if you were unable to make decisions for yourself?

Would it be – Where you lived? What you ate? What care and medical treatment you were given?

Or would it be – Is my money being spent wisely?

I know what my answer would be!

The following is a true account of what happened recently to a lady when no Lasting power of Attorney for health was in place……

Mum was admitted to hospital and following a lengthy stay Social Services along with the Local Authorities compiled a health report along with an assessment for care. Naturally, her children wanted to be involved in this process and requested that they be consulted with the view to wanting to ensure that the care package would be what Mum would have wanted. Not only were they not invited to any of these meetings to decide Mum’s fate, the authorities also refused to reveal the contents of the health report to her own children. All decisions were made without any of her immediate family being present!

Sadly, this is not an isolated case, How happy would you be to allow Social Services to make all the decisions about where you should live or other professionals deciding what medical treatment you received and your family having no say in the matter?

Having a Welfare POA in place provides the reassurance of knowing that, if the worst should happen, you have chosen someone you trust and knows your wishes, to make these decisions for you. Its importance should not be overlooked.

When should you make yours? 

The short answer is – now!! If you haven’t made a Welfare PoA then do it now – while you still have mental capacity. Mental capacity can be lost at any time, and not just by a mental illness such as dementia. Simple things – a bump to the head or even a car accident take people by surprise. Not having one is a more time consuming and expensive process. Ensure your wishes are carried out by those you love by appointing them as your Attorney today.

 

Controversial plans to raise the legal fees payable after death are to be scrapped ahead of the general election.

The BBC have published a new article with breaking news regarding the proposed increases to probate fees in May.

As you are probably aware, Probate fees had been due to rise from £155 or £215 to up to £20,000 for some estates in England and Wales from May this year however, the Ministry of Justice said there was now not enough time for the legislation – dubbed a “stealth death tax” by critics – to go through Parliament.

It is noteworthy that a senior Conservative declined to say if the scheme would be brought back if the prime minister was re-elected. Many believe the increased fees are merely “on hold” and that there will be some price increase in the near future.

Currently, there is a flat fee of either £155 or £215 per application for probate, depending on whether or not the application is made through a solicitor. There is no fee paid for estates worth under £5,000.

Under the proposed changes this system would have been replaced by a sliding fee scale linked to the value of the estate, with fees ranging from £0 to £20,000.

Watch this space for further news!

If you don’t leave your passwords, you’re leaving a nightmare for your loved ones

Funeral directors have issued a stark warning: it’s vital that everyone makes plans to pass on all the passwords for their accounts before they die – or they risk leaving their loved ones with a major headache.

The average person has eight passwords: they ensure that everything from our bank account to our utility bills and even our music and photos are locked securely online. The trouble is that if we don’t let our loved ones know our passwords, when we die, they will be locked out of all of it.

Judith Donovan, Chair of the Keep Me Posted campaign, says one of the great unintended consequences of online billing is that without the passwords, it becomes far harder to access accounts, which can make probate a “massive issue”.

A study by Co-operative Funeral Care last year found that almost four out of five people who have tried to deal with an estate through online accounts have faced issues. Most organisations you deal with online will help once you have a death certificate, but this help may to be what you would ideally like.

If your other half is still living in your home, and you took care of all the bills, they will need the password in order to access the accounts. Without it they could be racking up debts they have no idea about.

It’s not just the accounts we know about either. Without a list of everything you hold online – alongside the passwords – there’s a real risk that savings accounts, pensions and investments may be overlooked altogether and lost forever.

Even sites that may not seem important can have financial implications. You may have hundreds of pounds in cashback or gambling accounts, you might have a balance on Paypal, or you may have live eBay purchases and sales – which the estate is legally liable for.

Personal items like photos and music that are stored online may also be lost forever, while social media cannot be updated, which can cause heartache and confusion for people who come across the account.

Then there are email accounts. Without access to those, you may miss vital communications from businesses, as well as family and friends.

So, think about passing those passwords on to your executors now, to potentially save them a major headache!

 

NEW PROBATE CHARGES-WILL THEY AFFECT YOU?

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If you are dealing with the estate of someone who has died, you need to obtain what’s known as a ‘grant of probate’ before you can distribute their assets as set out in their will.
Prior to May 2017 a flat fee of £215 applies, despite value of estate. Estates under £5,000 are no fee.
From May 2017 the probate fees will change as shown below.
The total estate has to be valued. This includes property, cash, savings, goods and chattels etc. If the estate value in total is under £50,000 then there is no charge for probate.
Many estates will exceed this and therefore have to pay the new higher charges. Without paying them, nothing can be legally released to beneficiaries.


Value of estate                                                            New fee

Less than £50,000 £0
£50,000 to £300,000 £300
£300,000 to £500,000 £1,000
£500,000 to £1m £4,000
£1m to £1.6m £8,000
£1.6m to £2 £12,000
£2m and above £20,000

Case study: Sally and Jim have already lost their father. Then their mother passes away. They are named as the executors and the two main beneficiaries of the will.

The property is worth £275,000 and the savings, car and goods and chattels are worth £40,000.
This now means that Sally and Jim have to be able to pay £1000 in probate fees before they can receive their inheritance.
Some people may be forced to take loans if they cannot find the fees. In some cases, this will be on top of any inheritance tax payable if the estate falls into this bracket.
This is even harder for people who are acting as executors of a will without benefitting from it. They may claim the fees back from the estate but will still need to find them first.
With this in mind, take some advice about your estate. There are in some cases, strategies you can take that reduce the valuation of your estate, reducing fees for your loved ones.
Call Western Wills for a free consultation.

Katie Price Reveals she Hasn’t Changed her Will Since Splitting From Her Ex-Husband

Katie Price has revealed that she hasn’t updated her Will in several years, explaining that her ex-husband Peter Andre and only three of her five children would inherit her estate if she died unexpectedly.

During a discussion on Loose Women, Katie admitted her current husband and their two children were not named as beneficiaries in her Will and would be omitted from any distribution of her estate as it stands.

Katie Price stated: “Talking of Wills, Pete would get everything and Junior, Princess and Harvey. I haven’t even changed my Will thinking about it, and I’ve been married twice since Pete!”

However, she evidently does not realise that marriage automatically revokes a Will, which means that her previously written documents are likely to be invalid and her estate would be dealt with under the rules of intestacy. 

These legal regulations will divide the estate in a pre-determined way and, even if the person is married, in a civil-partnership or have step-children, assets may not automatically be distributed to the family members that expect to inherit them.

The celebrity’s well documented private life is a high profile example of a ‘blended family’, where couples share children from previous relationships and partners.  In the case of Katie Price, she has five children from three fathers and has been married three times.  The fact that her Will is likely to be invalid is particularly concerning given that her personal wealth is estimated at £45 million.

Tom Curran, Chief Executive at Kings Court Trust said: “Although Katie Price has gone through the process of creating a Will, due to her personal circumstances it could be completely invalid – which means her wider family could claim a stake in her estate. It will also mean that any estate planning she has put in place could be meaningless and as a result her estate could be taxed at 40%.

People may assume that a Will is only beneficial in later life or if the individual is not in good health. However, regardless of your personal circumstances it is important to plan ahead, particularly if you own a property or have savings, investments, insurance policies or own a business. There are also numerous benefits to having a Will, from ensuring you leave an inheritance to family and friends, to potentially reducing the amount of Inheritance Tax that may be payable on your estate.