LPAs not just for the Elderly

This article from the BBC shows why Lasting Power of Attorney documents aren't just for the elderly.  Who would look after your financial affairs if you were no longer able to?
http://www.bbc.co.uk/news/magazine-18067401

3 Simple Steps to Your Will

Want to get your Will sorted out but not sure what it involves?
3 Simple Steps
1 We would meet and have a chat about your own cirsumstances, what things you own, what your family situation is and where you want the things you own to go on your death. Most of the information I need from you comes from our conversation you don't have to fill in any forms or answer any quick fire questions.
2  I draft the Will for you returning again to meet with you and go through the document with you so you understand you Will.
3  Then we arrange the signing of the Will to make it legally binding.
Often my clients comment that the process is far easier than they thought.
It's that easy.
Get in touch now to get the process started.

Lasting Power of Attorney Documents

Lasting Power of Attorney (LPA)

An LPA is a legal document which allows you to choose someone now that you trust to make decisions on your behalf about things such as your property and affairs or personal welfare at a time in the future when you no longer wish to make those decisions or you may lack the mental capacity to make those decisions yourself.

A Property and Affairs LPA allows you to plan ahead by choosing one or more people to make decisions on your behalf regarding your property and financial affairs.   You can appoint a property and affairs Attorney to manage your finances and property whilst you still have the capacity as well as when you lack the capacity. For example, it may be easier for you to give someone the power to carry out tasks such as paying your bills or collecting your benefits or other income.  This might be easier for a lot of reasons; you might find it difficult to get about or talk on the telephone, or you might be out of the country for long periods of time. The decisions you could hand over to your Attorney(s) could include paying your bills, collecting your benefits or selling your house.

A Personal Welfare and Health LPA allows you to plan ahead by choosing one or more people to make decisions on your behalf regarding your personal healthcare and welfare.  These personal welfare decisions can only be taken by somebody else when you lack the capacity to make them for yourself; for example if you are unconscious or because of the onset of a condition such as dementia. 

The Attorney(s) you appoint to make personal welfare decisions will only be able to use this power once the LPA has been registered and provided that you cannot make the required decision yourself.  You can give the attorney the power to make decisions about any or all of your personal welfare matters, including healthcare matters. This could involve some significant decisions such as giving or refusing consent to particular types of health care; whether you continue to live in your own home, perhaps with help and support from social services, or whether residential care would be more appropriate for you.

If you want your attorney to have the power to make decisions about “life-sustaining treatment” you have to expressly give your chosen Attorney(s) the power to make such decisions on the LPA form. You can also give your Attorney(s) the power to make decisions about day-to-day aspects of your personal welfare, such as your diet, your dress, your daily routine. It is up to the Donor which of these decisions he/she wants to allow the Attorney(s) to make.  

Bicester Wills is highly experienced in preparing Lasting Powers of Attorney for clients with a variety of requirements and expectations.

Charitable Benefits - How to Save 4% IHT

From 6^th April 2012 the government is introducing new IHT legislation in the form of the Finance Bill 2012 that could affect anyone planning to pass a proportion of their estate to charity. Gifts to charity are already exempt from IHT but the new rules mean that the rate of IHT on the rest of the estate can be reduced from 40 per cent to 36 per cent. So, although the charity will receive the same amount, the non-charitable heirs should be better off under the new measures.

However, the new rules are complex and careful advice should be given as to how they will apply in each client’s circumstances. On death an estate will be divided into different components for tax purposes – each of which needs to be looked at separately. These are: property held jointly as joint tenants; property held in a trust that is treated as part of the estate for IHT purposes; and a general component – which is essentially everything else.

Within each of these components any reliefs or exemptions, such as the available proportion of the nil-rate band, which will be deducted first to ascertain the chargeable element. The charitable gift is then added back in to reach the “baseline amount”. If more than 10 per cent of the amount (after exemptions) within one component passes to charity then the reduced rate of 36 per cent will apply to the rest of the assets within that section.

Example 1

Let’s assume the survivor of a married couple dies after April 5 2012 leaving an estate of £1m, and that person’s Will leaves £50,000 to charity and the rest of the estate to their children.

After the combined nil-rate bands of £650,000 are taken into consideration the “baseline amount” here would be £350,000. This means that the £50,000 charitable gift comes to more than 10 per cent of the baseline amount so the reduced 36 per cent rate of IHT will apply to the bequest to the children.

As a result, the IHT liability is reduced to £108,000 instead of £120,000; the charity receives £50,000; and the children receive £842,000 – which is £12,000 more than they would have received under the current rules.  Even though the amount passing to charity is less than 10 per cent of the overall estate the reduced rate applies because it is more than 10 per cent of the “baseline amount”.

An added complication is that even a charitable gift under the survivor’s will of say £25,000 (which is less than 10 per cent of the “baseline amount” of £350,000 for the estate) could trigger the reduced rate of IHT if the estate consisted of more than one component.

Example 2

For example if, rather than passing outright, the assets of the first to die were held in trust for the surviving spouse (a common scenario to offer asset protection and tax savings) the estate would be split into two components. This means each component would be £500,000 and the “baseline amount” for the general component would be £175,000. As £25,000 is more than 10 per cent of £175,000, the reduced rate would apply to the rest of the assets passing under the survivor’s will.

It should be noted that the residuary beneficiary will always receive less as a result of the charity legacy both under the present and the proposed systems, but the reduction in the rate of inheritance tax will no doubt encourage more charitable giving which is part of the Government's background policy.

Lasting power of attorney for businesses

I just read this great article on EN the magazine for Entrepreneurs website http://www.enforbusiness.com/smetoolkit/lasting-power-attorney-businesses
it explains why as business owners we need to put provision in place to make sure our businesses can continue should we loose mental capacity.  Call me to discuss in more detail.

Linda Cummins, head of wills at legal firm Goldsmith Williams, explains that company owners should make arrangements to ensure their business continues to operate in the event that they become incapacitated.
If there are no plans in place for someone to have the legal authority to sign cheques and oversee the running of the business, there is every possibility that by the time the Court appoints someone to run it on behalf of an incapacitated owner-manager, the business will failed.
A lasting power of attorney, often referred to as an LPA, is a legal document that enables a selected person, or persons, to take over the day-to-day running of a business should the owner be either mentally or physically unable to do it themselves.
A common mistake many people make is to assume that because they have a will, everything is in order. In fact, a will only takes effect on death; it has no bearing on your business if you lose the capacity to run it but are still very much alive.
Accidents and illnesses that leave people incapacitated or hospitalised for extended periods can strike at any time and any age. According to the Department of Transport Road Casualties Annual Report, 22,660 people were seriously injured in road traffic accidents in 2010.
Over 130,000 people in England and Wales suffer a stroke each year, with around 10 per cent of those being under retirement age. One person in every 500 has Parkinson’s and, of those diagnosed, one in 20 is under the age of 40, while more than 16,000 younger people in the UK are living with dementia.
A lack of knowledge or "ostrich syndrome" is putting businesses at risk of being left in limbo or going under. People tend to think things like this will never happen to them or they have to be old before they suffer a debilitating illness, but "thirty somethings" are no more immune to injury or illness than the rest of us.
And it’s not just the business that will be affected either. The family of the company owner will be left unable to access funds to live off, adding considerable financial worry at an already very distressing situation.
By Linda Cummins

Need a Will but not sure how to go about it?

Do you want to tackle sorting out your Will but don’t know where to start?

Worried about the best way to go about it?

These are the worries of a lot of my clients have until they realise that the process is not as daunting as they first think.

I will visit you at a time and place that suits you, we will then talk about what you have and who you want to leave it to. 

You need to make some decisions about who will carry out your wishes – your Executors and who will look after your children should both parents die before they are 18 – your Guardians. 

But it is my job to guide you through this decision making process and advise you on the best way to express your wishes in your Will.

I have made it sound simple because with the right Will writer guiding you it can be a simple process and give you peace of mind and leave you with the feeling of “Why didn’t I do this years ago”.

Contact me now to discuss your individual needs and get your Will sorted out because without it the law dictates who gets what and Social Services will decide who will look after your children.

Worried about your kids losing out if your spouse remarries after your death.

A Solution - Flexible Life Interest Trusts

A Life Interest Trust (LIT), also known as an Interest in Possession Trust, is a document that names one or more beneficiaries to an estate and their entitlement to an income from assets held in trust over their life time.

This person is known as the Life Tenant. If that asset is a house or property, then the

Life Tenant is entitled to either the rental income on the property, if it is rented out, or to live in the property if they wish to.

However, a Life Tenant is not entitled to receive any of the remaining capital from the Trust. The Trust can also name other beneficiaries who are entitled to the assets in the Trust once the Life Tenant has died. They are known as Residuary Beneficiaries or Remainder men. However, while the Life Tenant is alive they do not receive anything

from the Trust unless the Life Tenant agrees to a distribution of the assets. LITs are designed to protect the children of a marriage or Civil Partnership in the event

that one partner dies and the other remarries.

You can also make specific requests or instructions on a Life Interest Trust. As a Trust is overseen by Trustees, you can give them specific instructions as to how you

would like the Trust to be managed. For example:

You can give the Trustees the power to either give or lend capital from the estate to

the Life Tenant at their discretion. Where a property is involved, you can specify

that if the Life Tenant wants to vacate the property they can then direct the Trustees to

sell that property and buy another for the Life Tenant to occupy and you can give

specific instructions as to how you would like any capital in the Trust to be invested.

Taxation A Life Tenant is treated as owning all of the assets held in Trust. Any income (such as rent) from the Trust belongs to the Life Tenant and is therefore taxed according to the beneficiary’s personal income tax rate.

No additional income tax is paid by the Trust. One major advantage of the LIT is that it protects the assets in the Trust from being used up during the lifetime of the Life

Tenant. So if a Life Tenant goes into full time nursing care, the local authority cannot take the assets in the Trust to pay for the care of the Life Tenant.

A Life Interest Trust is particularly useful if a couple have children and want to make sure that they benefit from the estate of either partner.

This can be contrasted with a trust which simply gives a right to reside in the property.

A trust of this nature does not give the occupant a right to income from the trust and is not therefore taxed as an income in possession trust.

Family Planning

Been advising a clients family the best way for them to protect family assets and make sure they are available to pass down the generations. 
So many families are worried about losong assets to the tax man or the local authority to pay for long term care fees. 
If you are also worried about this lets have a chat about the best way for you to protect your assets for your children and grandchildren.

Your Will needs to deal with Your BUSINESS!!

Your hard work and dedication to your business has meant that over the years you have built up a business for the benefit of your family, and on death you want to ensure that your family and loved ones are provided for.

But who would actually be entitled to your share of YOUR BUSINESS?

Certain restrictions may apply dependent upon whether the business is operated as a Sole Trader, Partnership or as a Limited company.  In the case of a Limited company, what happens may be pre-determined by the memorandum of articles. They could state that other shareholders have the right to buy out your interest. If you wanted one of your children to inherit your interest in the company this may not be possible without further planning.

As a Sole Trader you may wish to leave your business to your child who works with you, and then divide the rest of your assets between your other children. Unless this is set out within your Will a family dispute could quickly arise if the other children feel they ought to be entitled to a share in the family business too.

If you die without a valid Will, your share of the business would be subject to the Laws of Intestacy and the person who inherits may not be the person you intended or may be someone who is unsuitable to carry on your business.

It vital that your Will clearly defines what happens to your interest in your business on death.  Your Will needs to ensure your beneficiaries are able to inherit your interest, your company can continue to operate and this is dealt with in the most tax efficient way.

It is essential that you have a Will and that the Will reflects your own business situation.  Ideally you should have put in place a succession plan that does not depend solely upon your death but which provides for the situation where you are unable to manage the business due to ill health or infirmity.

Gifts to Children - a Cautionary Tale

When writing a Will it is highly possible that the client will want to make a gift to a minor, or there could be the possibility of a minor inheriting under a per stirpes clause. It is very important to consider what actually happens with such a gift and who should act as a trustee in such circumstances.

Money can bring out the worst in people as Claire Sproston found out after discovering her father and stepmother had stolen the inheritance she had been left in her grandfather’s Will.

Miss Sproston’s grandfather, Benjamin, passed away when she was just 13 and had made a Will naming his six grandchildren as Beneficiaries, each receiving an equal share of his £50,000 life savings.   Miss Sproston’s inheritance was placed in trust until she turned 18.  When she reached the landmark age, Miss Sproston enquired about the money only to be told by her father, Nigel, that he changed the trust and she would have to wait until she was 21 to receive her inheritance.

It was only after Miss Sproston consulted her cousins that she realised something was afoot and that her father would not have been able to alter the terms of the trust. She promptly went to see a solicitor who discovered the sad truth; her inheritance had gone.

Nigel Sproston and wife Jane were found guilty of fraud at Cardiff Crown Court and jailed for ten and nine months respectively.  The couple lied to solicitors and an investment company as well as forging Miss Sproston’s signature in order to get their hands on the £13,000 inheritance.

The Telegraph reported that Nigel Sproston, who pleaded guilty to fraud, told police he “spent £2000 of it paying off debts, £5000 on a holiday for myself, gave £1500 to charity and the rest just got frittered away.” His wife denied the charge but was found guilty nonetheless. Speaking after the verdict, mother-of-one Miss Sproston, now 22, said: “I’m still denying to myself, really, that either of them could have done what they did. When I first found out what my father had done, he told me he did it out of anger because we were naughty as kids.” “My dad has never told me what he did with my money. I don’t know if I will ever get it back.”

Although the subject can sometimes be a difficult one to raise with clients there should always be a discussion about the suitability of the trustees. If there is any doubt they should consider appointing a professional trustee to manage the fund.

Who Gets the Kids?

New baby has arrived, the room is decorated ready to go but have you sorted your Will out?

A maudlin question but every parent should have a Will which names Guardians, if you don’t a Judge will be left to decide who raises your children if the unthinkable happens.

As daunting as the process might seem creating a Will with guardianship appointment is fairly straight forward and leaves you sure that in the extremely unlikely event you can’t raise your kids they will be cared for.

You should name one guardian, and one alternative, in case your first can’t take on the role for each child.

You could name more than one but this raises the possibility of the co-guardians disagreeing later.

Things to consider when choosing a guardian:

• Is the prospective guardian old enough?
• Does the prospective guardian have a genuine concern for the children’s welfare?
• Can the prospective guardian physically handle the role?
• Does he or she have the time?
• Does the prospective guardian share your moral beliefs?
• Would your children have to move?

RIP - Rest in Poverty

A newly released report has shown that the cost of dying has risen by 20% since 2007 to an average of £7,248. The annual report by Sun Life Direct makes interesting reading and shows a lack of preparation and consideration by the population.

The calculated cost of dying includes death related costs such as funerals, probate, headstones and flowers and has risen a huge £400 in the last 12 months alone. The average funeral has increased by 61% in the last seven years leaving one in five people who have to organise one struggling with the costs.

Despite the shocking statistics a quarter of people fail to make any provisions for end of life costs and 44% of people fail to plan their funeral as they believe it is down to their friends and family to organise and fund it. The rising demand for help with these expenses means that the state is struggling to meet the demand for assistance. This is likely to worsen as the volume of elderly people and the ageing ‘baby boom’ population is forecast to steadily increase over the coming decades. The Dilnot report last year has already shown that people are failing to consider their own ‘end of life costs’ and this further report confirms that people are not planning how to fund the probate of their estate or their care at the end of their lives.

For those who think the state will fund their funeral the statistics within the report will make ‘eye-opening’ reading. 38,000 funeral awards were made in 2010/11 however 44% of applications were unsuccessful. The average pay-out for a funeral is just £1,217 per applicant leaving a shortfall to be met by the family of the deceased.

Concerns have been expressed by a number of parties as to whether the current social infrastructure established to support people at the end of their life meets the needs of today’s society. Although the number of deaths in England and Wales is at an all time low (491,348 registered in 2009) it is anticipated the number of deaths will rise significantly by 2030 by a predicted 17%.

“People are living longer and are therefore using more resources, both their own and the state’s” comments Dr Kate Woodthorpe, lecturer in Sociology at the University of Bath. She further confirms that “costs for social care are rising, living standard expectations are high and there remains an expectation that wealth is passed through the generations”.  The advice for your clients must be to ensure that they have considered end of life costs and have provisions in place to meet them.

The scoeity of Will Writers published this article on their recent Newsletter to it's members

It's that time of year where we all think about our New Year's Resolutions and with 60-70% of  the UK adult population without a Will I would image that "MUST SORT MY WILL OUT" is on many of those lists.

 

I need your help in reminding people how important a Will is in regards to their financial planning, you advise them with their life time planning but all that could come unravelled if they have an insufficient Will or no Will at all.

 

As a New Year special offer Bicester Wills has put together some Peace of Mind Winter Time Specials packages, which offer excellent value for money. These offers are only available until the 29th of February.

 

 

 

Peace of Mind Winter Time Special	2 Simple Mirror Wills 2 Property and Affairs Lasting Power of Attorney Storage of Documents Total £674	£550
Peace of Mind Winter Time Special Plus	2 Simple Mirror Wills 2 Property and Affairs Lasting Power of Attorney Storage of Documents Estate Review Total £774	£650
Peace of Mind Winter Time Platinum	2 Simple Mirror Wills 2 Property and Affairs Lasting Power of Attorney Storage of Documents Estate Review Probate Preparation ( Inventory Records and Valuations) Total £999	£850

 

 

If you or anyone you know needs to discuss their Will needs please let me know, remember I am happy to meet clients on a no obligation basis and happy to review existing documents free of charge.