Wills and Tax Planning
Having a will is really important, yet over two thirds of us haven’t got round to sorting our wills yet. Or if we have got a will, it can often be seriously out of date or the details long forgotten.
There are lots of reasons for this: we lead busy lives; ‘life admin’ can feel like the last thing we want to do; making wills often involves the need to think about difficult subjects (not least our own mortality).
What you should consider when making a will depends on your own particular circumstances. We are happy to guide you through the process to make sure you have everything covered that is relevant to you.
Our prices for wills start at £250 for an individual and £350 for a couple (where the wills are mirrored).
Not got a Will?
If you die without having a valid will in place, the ‘intestacy rules’, which are set by the government, dictate what happens to your estate. This is not always in line with what you would want and can cause hassle, upset and stress for those you leave behind. In some circumstances it can also lead to a surprise tax bill! If you want to know what these rules mean for you, please do get in touch with us.
Free Will Review Service
For anyone with an existing will, we offer a Free Will Review Service. Changes in the law and taxation system mean that a will made just a few years ago might not quite perform as you expect. We will happily look at your existing will and make suggestions about potential changes that might benefit you. It may be that you don’t need to do anything, but it is certainly worth checking!
Inheritance Tax (IHT)
Whether your estate will have to pay IHT when you die depends on the value of the assets you have and certain actions you may have taken during your lifetime. Generally speaking everyone has a tax-free allowance of £325,000, with tax payable over that amount at 40%. There is a further tax-free allowance for people who own a home and leave it on death to their lineal descendants (children, grandchildren etc), but the legislation about this allowance is complex and it can easily be lost. If your estate might be liable to IHT, there are steps you could consider taking to minimise that exposure. We are happy to advise you on your position if this is something that concerns you.
Probate and Estate Administration
There can be a lot to think about when someone dies, at what is almost certainly a very emotional time. For that reason, we offer a Free Probate Advice service to anyone who has lost a loved one, or is in charge of dealing with an estate, to help you understand what needs to be done and when.
Usually it is the Executors appointed under a will who are responsible for dealing with things. If there isn’t a will in place it falls to the ultimate beneficiaries of the estate (who take on the role as Administrators).
It may be that the estate is relatively straightforward and you just need to be pointed in the right direction, perhaps with some reassurance that you have got everything covered. We are happy to have a chat if that is you.
If the estate administration is more complicated, you may want some assistance completing the tax paperwork and applying for a Grant of Probate/Letters of Administration (the legal document which allows Executors or Administrators to handle the deceased’s assets). You might even want someone to take the legal side of things completely out of your hands.
We offer a bespoke service in which we can help with as much or as little of the estate administration as you would like. Unlike some solicitors, we do not charge a percentage of the value of an estate, our hourly rates are low (£150) and we can offer fixed fee arrangements in certain circumstances.
If you would like to have an idea of what might be involved for you then do get in touch.
Lasting Powers of Attorney
Lasting Powers of Attorney (LPAs) enable you to choose now who you would want to deal with your affairs if you ever became unable to do so for yourself, either temporarily or permanently.
We see LPAs in the same light as insurance policies: you hope you never need to rely on them, but it is really sensible to have them just in case you do!
There are two types of LPA: one covering your finances and one covering your health. There are good reasons to have both types in place, although you can just have one. We are happy to discuss what might be right for you.
LPAs need to be registered with the Office of the Public Guardian (OPG) before they can be used. You can also place other limits on their use if you wish to do so. We would talk this through with you as part of any appointment on this topic.
Our LPA costs for an individual are £350 for one type or £500 for both types, with discounts for couples to reflect a certain element of duplication in the work involved. These fees cover the costs of registration, save for the OPG registration fee (which is £82 per LPA). The OPG fee can be reduced or waived in certain circumstances and we will check to see if this applies for you.
Acting as an Attorney
If you are appointed as an Attorney there are certain rules you need to follow and certain actions that you cannot take without permission from the Court of Protection. We provide guidance to Attorneys whenever we help a client make Lasting Powers of Attorney and are also on hand in the future if further advice is needed.
Enduring Powers of Attorney
You (or a friend or relative) may have made an Enduring Power of Attorney (EPA). These were around before Lasting Powers of Attorney came into existence. EPAs are still valid, but they only relate to financial decisions. They do not need to be registered to be used, although there is an obligation on the Attorneys to register the EPA if the person who made it starts to lose their capacity.
If you lose your capacity in the future without Lasting Powers of Attorney in place, your loved ones would need to apply to the Court of Protection for a Deputyship Order if they needed to manage your affairs or wanted to make decisions on your behalf. This process can take many months and is much more costly than making LPAs. The Court will ultimately decide who is granted power to make decisions for you, and that might not be the person or people you would want. It can cause tension or dispute between family members who might not agree on what is best. Putting LPAs in place whilst you have the capacity to do so prevents these issues.
If you know someone who has lost capacity without having LPAs in place, or you want advice about the Court of Protection process, we are on hand to talk you through it and help with the application if desired.
A trust is created when a person transfers assets to others (known as trustees) to hold for the benefit of an individual or group (the beneficiaries). Trusts can be made in lifetime or within a will.
Trusts are really useful if you want to provide for a vulnerable or disabled family member without giving them control of the assets involved. This might arise because your chosen beneficiaries are children, they don’t have the ability to sensibly manage money for themselves or are vulnerable to financial abuse from others, or because receiving money directly would interfere with their entitlement to state support.
Trusts can also be useful as a tax planning tool, to help retain control over a business as it passes down the family line, or to protect assets for future generations (for example, from future care home fees). There are different types of trusts which are suitable in different situations, so it is best to get advice about which sort of trust might be suited to your particular aims. There are also tax implications and reporting requirements which you should consider.
Acting as a trustee brings with it a high level of responsibility. You can find yourself personally liable for any mistakes you make, even if you are not aware of the particular duties you have. The costs of professional advice can usually be met from the trust itself, so we would always recommend you speak to a professional to make sure you are on the right path.