WILL MYTH BUSTERS #2

ONLY SOLICITORS CAN WRITE GOOD WILLS WITH A GOOD OUTCOME.

The answer is absolutely not! At the time of writing I have almost 8 years of experience in the world of estate planning. I have met may fellow will writers, been to multitudes of Society regional meetings and listened to many expert talks.

The conclusion I have drawn is this- in every service in life there is the good, the bad and the ugly. I have seen some excellent wills drawn up by solicitors and I have also seen some horrendous ones and heard stories from families where distress was caused when things needed to be sorted out.

Some solicitors in their shiny high rise offices may not do the best job for you-they could miss out important information they need to tell you. Likewise, a self-employed estate planner working from a home office may do a sterling job for you. We are not a one-trick pony, our area tips into the realms of conveyancing, inheritance tax and income tax, capital gains tax, all these areas can and may, be affected by a will.

I will give an example for you. I met a client who lived in a house and was given a right to occupy it if the owner died first. He would not inherit it by will, just live in it until he died. What the solicitors who drafted this will had failed to mention to him, was the effect on his inheritance tax bill when he died was huge. Having a RTO loads the value of the house you are living in onto your estate value if you die whilst living there as if you owned it. In his case, his beneficiaries would have had to pay off an IHT bill of £114,000! Luckily, he came for a will re-draft and I was able to inform him and help him take a different route.

Pick your estate planner carefully. Make sure they are experienced and have constant up to-date training. Make sure they are members of a body such as the IPW, SOWW or CILEx. Make sure they carry personal indemnity insurance to cover work undertaken. Check there are plenty of happy client testimonials.

 

WILL MYTH BUSTERS #1 -I already have a will in place……………………….

Great! Do you know where it is? Even if you have a will it’s best to keep it under review to make sure that it still matches your personal circumstances.  After all, you wouldn’t purchase a car and assume it doesn’t need any maintenance for the rest of your life. Also, the last person to advise you may not have known all the facts or perhaps explained to you how you may protect the value of your home from being lost. Did you know that standard mirror wills may not protect the family home??

Here at Western Wills we recommend everyone reviews their will every 3 to 5 years or earlier if your situation changes. These changes could be due to marriage, divorce, birth of new children or grandchildren, death of a beneficiary, starting a business or even coming into some money. This also makes sure you keep abreast of any changes to the law that effect your planning so you can be sure that your will is as effective as possible.

Queen Of Soul Aretha Franklin Owed Millions In Unpaid Tax Says IRS

When soul legend Aretha Franklin died in August aged 76 she left no will to her vast estate. As interested parties file documents with Oakland County Probate Court, the IRS has joined the fray claiming back tax believed to be in the region of $6.3 million plus penalties and interest, a possible total of nearly $8 million.

The debts are in respect of 2012-2018 and the IRS has demanded payment as a priority, in advance of any distribution to other creditors.

However, an attorney representing Franklin’s estate disputes the figures saying that $3 million has already been paid in back taxes and all returned filed.

David Bennett, an attorney working for Franklin’s estate, said: “We claim it’s double-dipping income because they don’t understand how the business works.

“The vast majority of Ms Franklin’s personal 1040 tax obligations were paid prior to her death – something she wished to occur. The estate is diligently working to resolve any remaining issues”

Don Wilson, Franklin’s entertainment attorney for the past 28 years, regrets that she neglected to set up a trust, saying: “It would have expedited things and kept them out of probate and kept things private. I just hope [Franklin’s estate] doesn’t end up getting so hotly contested. Any time they don’t leave a trust or will, there always ends up being a fight.”

Her four sons have already filed notices of interest in her estate with the Probate Court, and it is expected that the net estate will be divided between them.

In the past two years she had forfeited three properties and had a lien placed on a fourth because of overdue taxes, which she then paid.

With the estate estimated to be worth $80 million, paying outstanding debts won’t be difficult, although winding up her complex affairs, including numerous properties and copyrights to her songs and partial copyrights for many of those she covered is likely to take years.

NO MENTION OF INHERITANCE TAX IN THE RECENT BUDGET!

Why is a IHT General Simplification Review needed?

The amount of IHT collected by HMRC has risen dramatically in the last few years and hit a record £5.3 billion in the 2017/18 tax year. This was a 13% increase in comparison to the £4.6 billion collected in 2016/17. With the rise in the number of estates subject to IHT, this review is very timely and will hopefully ensure that IHT is simpler to understand in the future.

A case earlier this year highlighted the lack of understanding when it comes to dealing with IHT as part of administering an estate. The Personal Representative, Mr Harris, was left with a staggering IHT bill of more than £340,000. Mr Harris was administering a £1.2 million estate and misguidedly distributed the assets to the beneficiaries before all of the IHT had been paid. Mr Harris’ case shows how a mistake or misunderstanding in regards to IHT can be of great consequence to Personal Representatives.

Don’t get caught out-check what your position is with professional advice.

Farmer’s Son Stripped Of His Inheritance Because He Hates Cows

A farmer’s son is in the middle of a bitter court row with his own parents for his right to inherit the family farm because he ‘doesn’t like cows’.

Clive Shaw, 55, from New York, Lincolnshire, who found out he had been written out of his parents’ Wills has brought a proprietary estoppel claim against them. (Proprietary estoppel  is where a person assumes on verbal agreement they will inherit something, especially if they have had vested interest e.g. worked in a family business.)

Based on a promise from his parents that he would inherit the £1m family farm, Mr Shaw claimed that he tirelessly worked on the farm from a young child and never pursued other career prospects.

The parents cut him out of the Will altogether and instead bequeathed the estate to his sister because they both claimed that their son ‘hated the cows’ on the farm and felt that he was incapable of running the business.

Mr Shaw’s sister, Cheryl Hughes, told the High Court in London that he repeatedly called the cows ‘stinking, horrible, rotten creatures’.

However, Mr Shaw believes the dispute has nothing to do with this but has come about because his mother does not like his girlfriend and thinks she is a ‘gold digger’.

According to national law firm, Irwin Mitchell Private Wealth, the case highlights the importance of ‘early action’ where families wish to protect their family assets to avoid costly farming disputes arising in the first place.

Nazia Nawaz, farming will disputes specialist, said: “We’re seeing increasing numbers of similar claims in farming disputes where the parties fail to formalise agreements in writing at the time the promise is made.

“While such cases were historically brought on the death of the person that made the promise, this case is one of many where the claim has been brought in the lifetime of both parties to enforce the promise as soon as there is an indication that the promise has not been honoured in a Will.”

She added: “This case also highlights the importance and need for early action where families wish to protect their family wealth. It goes to show why it is worth hiring a solicitor when it comes to Wills – they are able not only to advise and represent parties in such disputes but also on strategies to minimise the risk of disputes arising in the first place.”

The High Court’s Judge will conclude the case on a later date.

There have been recent cases in the farming sector where Wills have not been written and ‘verbal promises’ have been relied upon instead to family members – which not only causes costly inheritance battles but can tear families apart. Private sector legal professionals have been warning farming families that ‘promises are not enough’ when it comes to farm inheritance and stressed the importance of making a Will to avoid expensive inheritance disputes.