Wills, Trusts & Probate - Recent News
For further help or information regarding the articles below, please contact Gary De’Ath or Sarah Lee or Julie McDonald
- DO YOU NEED US?
- ARE YOU AUTHORISED TO MAKE BIRTHDAY OR CHRISTMAS GIFTS?
- THE GOLDEN RULE
- A STITCH IN TIME... ADVANCED DECISIONS AND LPA
- WILL POWER!
- DON'T FORGET YOUR PETS
- REGISTERING YOUR WILL
- ELDERLY CARE vs. FAMILY INHERITANCE?
- MUST MY CHILDREN INHERIT?
- COURT OF PROTECTION vs. LASTING POWERS OF ATTORNEY
- DYING WITHOUT HAVING MADE A WILL - NEW RULES ON INTESTACY
DO YOU NEED US?
Wills – Do you have one? Over 67% of the population do not. Devoting just two hours of your time to make a Will ensures that your family and loved ones will receive your assets.
Lasting Powers of Attorney – What happens if you can’t cope with your affairs? Appointing someone as an Attorney can safeguard the management of your financial affairs and enables someone to make health and welfare decisions if you become unable to do so.
Care home fees – Never has it been more important to protect and plan for old age. We advise on what your position might be if you need to receive care, either at home or permanently in a residential home.
Administration of estates – Unfortunately, losing someone close happens to us all. It can be a difficult time. We aim to help by being on hand to deal with the paperwork and formalities.
Court of Protection – Sadly, there are times when people no longer have the mental capacity to deal with their own affairs. This may be due to an age related illness or an accident. We can help you apply to the Court of Protection for the appointment of a Deputy who will act in these situations.
Charities - We set up charities, administer them and advise charitable organisations.
Planning for your future needs when you are fit and well is important - leaving it too late reduces your options. For a free half hour review on any of the above, please contact:
Gary De’Ath gd@gross.co.uk
Sarah Lee sl@gross.co.uk
Lindsey Rhodes lr@gross.co.uk
Are you authorised to make Birthday or Christmas Gifts?
If you are about to make gifts on behalf of a person where you are an attorney under a Lasting Power of Attorney or a Deputy under the Court of Protection, just pause for thought upon the following:-
- The general principle is that gifts made do not require the specific authority of the Court if they are at a level and on occasions when the donor or patient might have been expected to make a gift. A good example is a modest birthday present or Christmas present.
- Both the Office of the Public Guardian in respect of Lasting Powers of Attorney and the Court of Protection in respect of Deputyships, are becoming particularly strict in requiring specific authority where gifts are either made on different occasions than birthdays or Christmas or are of an amount which might be regarded as beyond the norm for presents.
The Golden Rule
More often than not, a will is made when the testator (the person making the will) is elderly or is prompted by serious illness to do so. In these situations we are occasionally faced with the need to satisfy ourselves that the testator has the required capacity to make a will.
Mostly, there is no doubt that the testator has the necessary capacity and they are able to give coherent and clear instructions stating who is to benefit from their assets and why, without any external influence on these instructions. However, where this is not so, we find ourselves in the difficult, sensitive position of having to raise the question of capacity with a client, sometimes someone we have known for several years – something that may, understandably, be resented.
Solicitors follow “the golden rule” – a clear set of guidelines - to avoid or limit disputes over the content of a will after death. Where capacity is in question or to guard against accusations of undue influence on the testator, we recommend that a report from the testator’s GP be obtained. Such a report will, hopefully, confirm that all is well and that there are no capacity issues. This reassures both the testator and us and leads to the successful completion of a will that protects the requests of the testator, ensuring that their assets pass as they wish.
If you or a member of your family is advised to obtain a GP’s report, this should be seen as a precaution. A report will serve as reassurance and act as a safeguard against doubt, minimising the risk of later court action.
A stitch in time.... Advanced Decisions and LPA
We have received a number of enquiries recently from clients concerned about how best to give authority to their nearest and dearest to make decisions regarding their medication and health care (as opposed to their money and property), if their health should fail. Put simply, there are two documents which can provide the appropriate authority.
1. The Advance Decision or Directive - £50 plus VAT This is usually a very simple and straightforward document designed to cover the situation if you should be incapacitated unexpectedly, for example, by way of a sudden stroke or accident. It provides guidance as to how and when you would wish medical care to be administered if you are unable to give authority yourself – for example, you might be in a coma. It makes good sense to appoint one or more persons to have authority on your behalf in these circumstances. The document is straightforward and requires no registration at the Court. It makes sense to let your doctor know if you have made an Advance Directive and for a copy to be left with your doctor. In the event of your being incapacitated, your Advance Directive will allow your medical practitioner to rely upon the authority of the person or persons you appoint to guide them as to the type of medical care you require.
2. The Lasting Power of Attorney for Health and Welfare - £450 plus VAT plus £130 Court registration fee This is a more fulsome document envisaging an extensive need for one or more persons to have authority with regard to your medical care when you have lost capacity. A typical example might be a diagnosis of Alzheimer’s or Parkinson’s disease. The Lasting Power of Attorney should be registered at the Office of the Public Guardian. If you would like to know more, please contact us.
We will be pleased to provide you with a free 30 minute appointment to explain things to you in a little more detail.
Gary De’Ath gd@gross.co.uk,
Sarah Lee sl@gross.co.uk or
Julie McDonald jm@gross.co.uk
WILL POWER!
We are delighted to report that over £28,000 has been raised through our support of the St Nicholas Hospice Wills Weeks campaign. As one of fourteen local firms who took part in the scheme which ran throughout June, these funds were raised from generous donations by our clients in return for our team giving up their time free of charge to prepare wills for them.
St Nicholas Hospice provides valuable support to patients and families alike, and we are delighted to have been able to help the continuation of their good work by donating our time.
"The service provided to us was quick, professional, well informed and smooth. A fantastic service and provided us with a lot of information whilst making us very comfortable with something we didn’t know a lot about. Thank you.” (Comment by Wills client)
Making a will is just part of putting your affairs in order and this was an ideal opportunity for our clients to do so. We are always happy to have an initial chat with anyone who needs a will or wishes to review an existing will. Please email Gary De’Ath gd@gross.co.uk, Sarah Lee sl@gross.co.uk or Julie McDonald jm@gross.co.uk or call them on 01284 763333.
DON'T FORGET YOUR PETS
When making a Will, you decide who will be your executors, who will receive your assets and who will look after your children when you die. Although many families have pets, only about one in ten provide for their future in a Will. If you do not provide for your pets in your Will, it leaves their future uncertain. Who will look after them? How will this person pay for their upkeep?
Some people have informal arrangements with friends, family or neighbours but this may not be enough. Pet food and vet bills are very expensive. Unless you make a specific provision in your Will for a sum of money to be provided for the upkeep of your pets, the person looking after them may be left with an expensive burden.
There is a variety of provisions which can be made. Examples include:-
- A legacy to the carer to assist in looking after your pet.
- You can express a general wish and hope in your Will that a person will look after your pet but not create any binding obligation.
- You can make an outright gift of your pet to a trusted friend.
- You should set up a small trust of monies for your pet to assist in their upkeep. The trustees need not be the person or persons who are caring for your pet.
- You could gift your pet to an appropriate charity either with or without a legacy.
Naturally, before pursuing any of these alternatives, we would encourage you to ensure that the recipients of any legacy or trust monies will be prepared to look after your pet in the way you would wish.
If you would like more information, please contact Gary De’Ath gd@gross.co.uk or Julie McDonald jm@gross.co.uk.
Registering your Will on the National Will Register
SOMETHING FOR FREE
Regular recipients of our Newsletter may remember our offer to clients who made wills with Gross & Co before 2 April 2009 the opportunity to register these free of charge on the National Will Register. The offer is still open.
Why register your Will?
- It ensures your Will can be located instantly following your death.
- The latest Will you have made is the one that is followed.
- You have peace of mind that if your Will is lost, misplaced or forgotten with the passage of time, the location of it can be identified.
What happens if you don’t register?
- Your Will may not be found and your beneficiaries may not receive the inheritance they are entitled to.
- Your Will may be found after your estate has been distributed.
- An old Will may be found and taken as your final wishes.
- Family disputes may occur.
- Your children and dependants may not be looked after in the way you have chosen.
- Courts may distribute assets and decide who gets what.
- It may be assumed that you have never written a Will.
The content of your Will remains private and there is no need to tell anyone that you have registered the Will if you prefer not to.
For Wills made after 2 April 2009, there is a small administrative charge of £18.
To take advantage of the offer or if you are concerned that your Will is not up to date, please contact:
Gary De’Ath gd@gross.co.uk or Sarah Lee sl@gross.co.uk or Julie McDonald jm@gross.co.uk
ELDERLY CARE vs. FAMILY INHERITANCE?
We frequently meet clients who are concerned about the prospect of spending all their savings on paying for care in their old age, leaving little or no inheritance for their families. Even though leaving an inheritance may not be a priority, questions of how they are to fund their care without being a burden on their family, but whilst maintaining their independence, need to be answered.
Making a decision to move into a care home is difficult. Statistically, one in three women and one in four men will require some form of long term care. The average cost of care in a residential home is about £25,000 per year, whilst the annual fees for nursing home care average about £35,000.
If a local authority agrees that care is required, they will assess the physical needs of the individual to determine the type of care that is appropriate. The ability to pay for that care is then assessed to establish the contributions that the individual will be liable for. This is based on a means test and it is rare that there is no contribution to pay. The State will only pay for the very poorest people.
If there is a shortfall of funds to pay for the care, this must be met from assets. Options to meet fees currently include renting or selling the home, cash deposits, purchase of an impaired life annuity, constructing an investment portfolio, pre-funding, regular premium contracts and the purchase of a deferred annuity. Specialist advice is essential before taking steps to follow any of these options.
It seems there is no end to the extent to which local authorities can access assets. Even though the Government recently published a Green Paper proposing several funding options, the position remains uncertain. It is clear that the State cannot afford to bear the nation’s care costs, making it increasingly important for our expanding ageing population to seek expert legal and financial advice.
We can rarely offer quick fixes or easy solutions. However, we are happy to discuss what best suits your needs and circumstances. If you would like to do this, please contact:
Sarah Lee sl@gross.co.uk
MUST MY CHILDREN INHERIT?
Under English Law, a testator is free to leave by Will his or her estate to whomever he or she pleases, including leaving everything to charity.
In a recent case, an elderly mother left her estate of £500,000 jointly between two charities. She was widowed, and had one daughter, who she had rarely seen since her daughter left home at 17. Her daughter had known for some time that she had been excluded from her mother’s Will. However, when her mother died she made a claim against the estate.
Under the Inheritance (Provision for Family and Dependants) Act 1975, a dependent of the deceased can make a claim for a provision out the estate, on the ground that the testator did not make a reasonable financial provision for the applicant. When deciding whether to make a provision for the applicant, the Court must follow guidelines, which include:
- The financial resources and needs of the applicant, and other beneficiaries;
- The deceased’s moral obligations towards the applicant, and other beneficiaries;
- The size of the estate;
- The physical or mental disability of any applicant or other beneficiary;
- Anything that may be relevant, including the conduct of the applicant.
The daughter, who was in her early forties, was married with five children, lived in a Council house and had lived on benefits for most of her life. The Judge awarded the daughter £50,000.
The daughter wanted more, and appealed the decision of the Judge. The Charities also appealed on the basis that there should have been no award made to the daughter.
On appeal, the Judge decided that the fact that the daughter was in a difficult financial position was only one of the factors to be considered. The fact that the mother had made a conscious decision to disinherit her daughter, and that the daughter knew of this, was also important. The Appeal Judge decided that the first Judge was wrong in awarding the daughter anything out of the estate.
This does not mean that it is impossible for a disgruntled child, or other dependent to make a case against an estate if they have been excluded from a Will. However, if a testator has a clear intention to disinherit someone, their wishes will carry great weight.
This case illustrates that to ensure that your wishes are carried out, it is extremely important to make a clear and comprehensive Will. Please feel free to contact us to make a no obligation free initial meeting to discuss your wishes.
COURT OF PROTECTION vs. LASTING POWERS OF ATTORNEY
Press headlines have highlighted flaws in the workings of the so-called “secretive” Court of Protection system designed to look after the affairs of vulnerable people.
Why involve the Court of Protection?
Occasionally, the onset of mentally incapacitating illnesses means that people cannot look after their own financial or healthcare affairs. When this happens, an application to appoint a family member or some other person as their Deputy is made. The Court of Protection Order authorises the Deputy to make decisions about, and manage the affairs of a vulnerable person, ensuring that bills, care fees and other expenses can be paid on their behalf.
What is not always made clear is that Deputies can be asked to place significant sums of money in a special account that is run by the Court. This makes it necessary to apply to the Court if large sums are required. Occasionally, a Court Order may also be necessary to authorise the sale of someone’s home, if they move to residential or nursing care.
Media coverage also highlighted the fees the Court levy, the time it takes to obtain authority to manage finances and the need to apply for funds from the special account. This can be several months in each case.
How to avoid involving the Court of Protection?
As long as someone has capacity, a Lasting Power of Attorney (“LPA”) can be the answer. There are two formats – one deals with property and financial affairs, the other health and welfare decisions. The choice of Attorney who acts on your behalf is yours and the law states that the Attorney must act in your best interests. It makes sense to appoint a trusted family member or close friend to make these important financial or health decisions. The Attorney, effectively, steps into your shoes to deal with the day to day issues that you can no longer cope with. Whilst useful in the event of an emergency or physical disability, an LPA can also be used after the onset of mental incapacity.
Although an LPA must be registered with the Office of the Public Guardian before it is valid, making one is far simpler than an application to the Court of Protection. Once in place, it may not be necessary to use the authority granted by the LPA immediately, but peace of mind that there is someone to help in the future is added protection for the management of your finances.
The answer is clear. To avoid the risk of not being able to choose who looks after your financial and personal affairs and the potential for Court of Protection delays and fees, making a Lasting Power of Attorney is the obvious route.
If you would like a more detailed chat about LPAs, please contact
Sarah Lee sl@gross.co.uk
DYING WITHOUT HAVING MADE A WILL - NEW RULES ON INTESTACY
Where a person dies without having made a Will (intestacy) on or after the 1st of February 2009, the legacies payable to surviving spouses or civil partners are increased. The limits were last increased in 1993 and were regarded as well overdue for review.
Before the 1st of February 2009 where the deceased left a surviving spouse or civil partner and children, the amount of the legacy payable to the surviving spouse or civil partner is £125,000. On and from the 1st of February 2009, the legacy payable to the surviving spouse or civil partner is £250,000.
Before the 1st of February 2009 where the deceased leaves a surviving spouse or civil partner and parents or siblings but no children, the legacy payable to the surviving spouse or civil partner is £200,000. On and from the 1st of February 2009, the legacy is £450,000.
Whilst the legacies have been increased, the overall solution as to who benefits on intestacy is often far from satisfactory. Consider these examples:-
- If there are no available relatives, everything goes to the state. In a similar circumstance were a Will drawn, the deceased could, perhaps, have nominated a charity or charities.
- Where the deceased leaves a spouse or civil partner and children, the spouse/partner receives the personal chattels, £250,000 if the death occurred after 1 February 2009 and the right to receive the income of the capital of the remainder of the deceased’s estate. The other half of the deceased’s estate will be shared equally between the children (this includes illegitimate and adopted children but not step-children). When the surviving parent dies, the capital supporting their life interest also passes to the children.
- Where the deceased leaves a spouse or civil partner and relatives but no children, the spouse/partner receives the personal chattels, a legacy of £450,000 if the death occurs after 1st of February 2009 and one half of the remainder of the estate. The surviving relatives receive the other half of what is left according to a fixed priority list – for example, if the parents are still alive, they will receive but if they have died, the brothers and sisters or their descendants will receive the half share.
The advice we give to our clients is unchanged as a result of the new Rules: a Will should be made by anyone who has married and particularly an adult who has children, either within or outside of a marriage. Relying upon the Rules of Intestacy, may not give protection for those nearest and closest to you.
