Has your Will got a ‘Survivorship Clause’ in it?

February 15th, 2012

It is quite normal for Mirror Wills to include a survivorship clause, however in relation to married couples it may be preferable to take out the survivorship clause for each other, otherwise it may result in an unexpected Inheritance Tax bill, so why is that?

Married couples have the benefit of the ‘transferable nil rate band’ for Inheritance Tax purposes provided the first one to die leaves part/ all of his estate to his surviving spouse. When she, the survivor dies she will not only have her own nil rate band available, she will also have the percentage part, or all his nil rate band as well. Here’s an example for you to follow:

So when Mr died/left everything to Mrs, she will then have two complete nil rate band’s to use against their total estate when she dies, the maximum allowance she has therefore is currently £650,000 before Inheritance Tax would apply.

Now imagine that Mr & Mrs die within a few days of each other following a car accident, Mr died first, their survivorship clause would mean that Mrs would not get his estate at all, it would go to the children in equal shares, and as his estate was value at £400,000 (i.e. £75,000 above the nil rate band of £325,000) there would be 40% Inheritance Tax to pay on the £75,000 excess, which is £30,000. So the £400,000 less £30,000 tax bill would go to their children in equal shares.

The survivorship clause is there to avoid a double probate cost/time hit in the event that a couple die together which is sensible, however what we would recommend is excluding each other from the survivorship clause. Not everyone is going to save £30,000 as in the example, but it is worth your while getting in touch with us if you want to be certain of the outcome.

We’re always happy to help, so either ring us on 0116-2784862 or click here to use the contact form.

Are you a Mr. & Mrs. We’ll Do It Tomorrow? If you are, please get in touch!

November 20th, 2011

I am getting straight to the point here; my intention is to encourage you to read this short and very informative article. Alarmingly, most of us do put off making a Will for all sorts of reasons and even more of us have done nothing to protect our assets for our family’s future benefit. It is easy to do, so why not get on with it now?

If you die without a legally valid Will in place the law of intestacy will decide who gets your possessions. You might have something to say about that, but if you’ve already departed this world, it’ll be a bit too late for that. We all know that ‘proper planning prevents poor performance’ so avoiding the issue isn’t a good idea, we all know that really don’t we and by the way, making a Will is unlikely to bring on your demise, or at least I am unaware of any correlation between these two events, but don’t quote me!

The simplest form of Will allows you to choose who will handle your affairs (your Executors), who will get your estate (your beneficiaries) and when they will get it (minors inheriting at 18, 21 or 25 for example). If you have children under 18 you’ll need to appoint legal guardians for them otherwise Social Services will happily allocate them in to foster care immediately after your death. Also don’t forget that for a charity to benefit from your estate, you will need to include a legacy clause in your Will.

Without a Will, the administration of your estate is very likely to cost more, take longer and leave your family with months of financial hardship and stress whilst someone, usually a solicitor or other professional tries to unravel things. Be careful who writes your will because some practitioners will include a charging clause and appoint themselves as an executor (in addition to whoever you choose), so that when it is signed and witnessed they’ll be able to charge their standard rates for probate after you have died and that could be expensive and reduce your family’s inheritance…

Having a basic Will in place is a very good starting point, however the reality of your own circumstances may mean that you are actually a little more complicated than that, so you should consider the implications of the following areas, and for the record this list is not exhaustive:

Inheritance tax doesn’t affect everyone, but if your estate is above the ‘nil rate band allowance’ (current tax year 2011/12 is £325,000 per person) you may want to sit up, pay attention and plan ahead now to legally avoid it, it can be done!

Long term care costs is a huge risk to us all particularly with a growing ageing population. If you need care at some point in the future and have assets in your own name above £23,250 (2011/12 tax year) the Local Authority has the power to make you pay your own way, including a forced sale of the family home. It is effectively a 100% tax over this amount. Only if you plan early enough can you do something about this. Don’t leave it to chance, using a Trust can help protect it for future generations.

Probate costs (handling your affairs after death) are typically 2-3% of the total value of your estate, you’ll no doubt be able to work that out for yourself and give yourself an unpleasant shock. This is how much a probate practitioner is likely to make from your estate, your family will get the rest. Why not ask us how to avoid these charges completely?

Families of course can be quirky and create their own problems, whether it is due to a sideways disinheritance (your spouse remarries after your death, then dies and the new spouse gets it all so disinheriting the children from your first relationship), unreliable children who gamble, do drugs or simply fall out with you can all lead to problems with your Will. Talk to us because it is likely we can help you to unravel things and see the light.

Business property relief, where applicable and in conjunction with a discretionary trust clause in your Will, can allow you to pass on and preserve your Company in the most tax efficient way to whoever you want to own and run it.

All Willwriters are not the same so whoever you choose, make sure they are trained and qualified, insured and regulated by a Code of Practice for your protection. All members of theInstitute of Professional Willwriters meet these criteria and provide a first class, honest and ethical service at a reasonable cost.

If you want to know more about Wills and Estate Planning, please contact us at

www.willplanningsolutions.co.uk or call 0116-2784862 for a free ‘no obligation chat’. We’re always happy to help.

Personal estate planning issues clinic in Hinckley

September 17th, 2011

We’re delighted to have been invited by One Roof Financial to help with their NEW Clinic.

If you have a niggling question or two about your finances or other important planning issues but don’t know who to ask for fear of being charged an arm or a leg, why not book a 15 minute private consultation with us – it won’t cost you a penny!

The clinic launches on 5th October 2011 and will continue to be held on the first Wednesday of each month in the Atkins Building on Lower Bond Street, Hinckley between 5pm and 7pm. You can pre-book or simply turn up on the day but you may have to wait a short while to see us.

The topics we cover are:

Mortgages Protecting your home and mortgage Safeguarding your family and lifestyle Planning for retirement Your options at retirement Improving your investment returns Lifetime mortgages – releasing equity from your property Inheritance Tax Planning Wills, Trusts, Lasting Power of Attorney, Care Fees planning

For further details click here or contact us on

Tel. 01455-268677 or by Email click here Will Planning Solutions
or
Tel. 01455-636163 or by Email click here One Roof Financial

Finding a competent Will Provider

July 31st, 2011

You don’t have to delve too far into the headlines to see that Will-writing has had a lot of coverage recently. Why? A report published by the Legal Services Consumer Panel has recommended regulation for this sector of the law. Hooray, at last I say. It has only been 20+ years that the Institute of Professional Will-writers (IPW) has campaigned for this to happen, so as far as I am concerned, it is welcomed with open arms.

You only have to look at my profile page to see why. Regulation is good for the consumer because the service you will get is of an acceptably high standard. It is also good for IPW members too because it will shrink the market and cut out all those unqualified practitioners that have muddied the waters for us good guys.

The IPW has issued a 10 point checklist to help you identify a good will provider from a bad one. In addition to this, let’s face it, when you meet the provider you’ve chosen for the first time you’ll get a reasonable gut-feel for whether the practitioner knows what they’re talking about and whether you want to do business with them. Trust your instincts and use this check list to go into that first meeting ‘well armed’.

Understand the market. There are 3 kinds of providers in the market place – solicitors, banks and independent Will-writers. All solicitors are regulated. Some Will-writers will be regulated through the IPW’s Code of Practice and this is approved by the Office of Fair Trading. All those who are not members of the IPW will only be subject to a weaker form of regulation, or indeed no regulation at all.
Does your Will-provider know what they are talking about? Ask to see evidence of their expertise, if they refuse or are offended by your request – walk away. IPW members have to go through a rigorous training process and qualify by examination. Be wary as there are unqualified Will-writers out there, it is also rather surprising to think that a solicitor can become qualified without studying Wills.
Check that your Will-provider has professional indemnity insurance. This will compensate your beneficiaries if a mistake is made in your Will. It is mandatory for all solicitors to have this insurance and it is mandatory for all members of the IPW to have this cover too.
If it looks too good to be true, then that’s exactly what it’ll be, so be wary of low cost Wills, special offers and prices quoted from £x ‘for a basic Will’. We all know you get what you pay for these days, so do you really want to chance saving a few quid for a cut down service? As a rule of thumb, a Will for a single person should cost no less than £100 or £200 for a couple (excluding VAT) and make sure you know if VAT is included or not.
Ask to see a full price list. Other services, such as Lasting Powers of Attorney and trusts may also be to your advantage but some providers will charge extortionate prices for these services because they are not part of the headline cost of making a Will. You need to understand what the full cost of the service to you could be, because the cheapest Will may end up being the most expensive route in the long run, if that makes sense.
If you see a Will-provider in your home, the law gives you a 7 day cooling off period during which you can change your mind, but you can waive this right if for instance you need your Will completed urgently – so be suspicious if you are asked to waive this right. Also, ask if you can change your mind without being liable for further costs.
If you’re asked to pay for the service before it is completed, find out what happens if your Will-provider fails to deliver, or if it is delivered late, or you’re simply unhappy with it. Any member of the IPW who collects a payment ‘up front’ has to be part of a prepayment scheme run by the IPW that either provides a refund or ensures the service is completed by another member.
You don’t have to appoint the Will-provider as an executor in your Will. A lot of people will appoint family or friends to handle their affairs, and if they need help, they can always employ a professional to help with some or all of the work at that time.
NEVER prepay a fee at the time of making your Will, for someone to handle your estate in the future, how can you be sure the firm will still be in around at the time of your death and therefore be able to provide the service that you have paid for?
Ask what happens if things go wrong. If you choose a solicitor you can refer matters to the Legal Ombudsman and if you choose a member of the IPW you can refer matters to the Estate Planning Arbitration Scheme (EPAS). Both are completely independent.

So at the end of the day you have a choice; most of us have experienced the kind of fees the banks and solicitors charge, IPW members are a highly credible alternative without breaking your wallet.

Further information:

a) The Institute of Professional Willwriters was formed in 1991 with the aim of setting high standards for individuals and firms offering Will writing services. It currently has 800 individual members representing 250 firms. More information about the IPW can be found at www.ipw.org.uk

b) In 2010 the IPW became the 10^th organisation to obtain approval of its Code of Practice from the Office of Fair Trading under its Consumer Codes Approval Scheme. http://www.oft.gov.uk/news-and-updates/press/2010/56-10

c) The full report by the Legal Services Consumer Panel on regulating Will-writing can be found at http://www.legalservicesconsumerpanel.org.uk/publications/research_and_reports/documents/ConsumerPanel_WillwritingReport_Final.pdf

d) Comments made by the Legal Ombudsman can be found at

http://www.legalombudsman.org.uk/aboutus/blurred_edges.html

Westcotes Bowls Club on Sunday 12th June 2011

June 12th, 2011

This was our second event of the Summer which has been a reasonable successful, as all of the sonsorship events are that we are involved with seem to be. Having said that of course, those playing in the event did come in rather wet and cold but after a superb Sunday lunch, we were allowed far more time than normal to present our business’s to the room because the afternoon’s play was cancelled; yes it carried on raining, and quite fitting that whilst typing this blog, I see that the Canadian Grand Prix is also a washout! Joint venture sponsorship to the right demographic do work for all concerned, the club, the players in terms of attractive prize money and for us being able to market our businesses to a room full of really nice people. Whether you’re interested in us getting involved in sponsorship or if we can help with your Wills (and other planning issues) please contact us now.

What is a Lasting Power of Attorney (LPA) for… and why should I have one?

May 23rd, 2011

Incapacity could be classed as a fate worse than death. Being unable to manage our own affairs either because you can’t get out, or you’re unlucky enough to suffer from a mental illness like Alzheimer’s is more common than any of us want to admit. With an ever ageing population, being diagnosed with any illness is a warning sign to put plans in place, especially if your condition is likely to deteriorate.

The over-riding reason to do this is exactly the same reason as putting a Will in place – making life easier for those left to sort it all out. Be without and your closest family and friends will have a big problem to get on top of handling your affairs – remember you haven’t died yet, so you’ll be as much a problem to them, as well as them managing your money, and your health and welfare.

A Lasting Power of Attorney allows you to decide now who your Attorneys will be, people you trust, and these chosen individuals will act for you when you cannot. This is a very powerful document, there are built-in safeguards for your peace of mind and because we’re all different, you may want to stipulate restrictions and conditions on how your Attorneys can act for you, it is your choice.

Two types of LPA exist. Most people lean towards the ‘Property & Financial Affairs’ one for obvious reasons. Whatever you do, don’t under estimate the usefulness of the ‘Health & Welfare’ LPA because having both will put the people you want, in charge 100%. Having one is better than none, but is effectively restricting the Attorney’s effectiveness, and I doubt this would have been your intention when you only set the one up. Ask us to quote you, we are not expensive, Contact Us now.

The IPW code of practice

May 22nd, 2011

This is the Institute of Professional Willwriters, the IPW.

We run our business according to the rules and regulations laid down in the IPW’s Code of Practice – you can find more details if you click here. The code is also approved and regulated by the Office of Fair Trading under the CCAS scheme, that’s the Consumer Codes Approval Scheme. This has been put in place to demonstrate to the public at large that we are serious about what we do, and that we will carry out our role with professionalism, care and attention to detail.

You can find out more about the IPW here.

Why should you write a Will then?

May 22nd, 2011

You have to do it whilst you’re alive, it cannot be done once you’re dead, sorry about the synicism but people generally put off getting a Will because they’re ‘not going to die just yet’ – how do they know that?

75% of people have no Will, their estate will pass on according to the law of intestacy rather than how they’d have chosen or wished for. It is akin to leaving a bit of a mess for your family/friends to sort out, you wouldn’t like it would you? You would probably prefer to leave a set of clear instructions to follow, this is what a Will is, but it has to be done properly.

Without a Will, your unmarried partner will get nothing, your spouse isn’t entitled to all of your estate (this is subject to monetary limits) and it is possible that your home may have to be sold to satisfy the law of intestacy – it is based on the 1925 Administration of Estates Act! Not very recent is it?

Now you’ve read this, you don’t really have an excuse in my view, so be smart and get it done today, please contact us, we’d be delighted to help you.

6 Basic Problems

Has your Will got a ‘Survivorship Clause’ in it?

Are you a Mr. & Mrs. We’ll Do It Tomorrow? If you are, please get in touch!

Personal estate planning issues clinic in Hinckley

Finding a competent Will Provider

Westcotes Bowls Club on Sunday 12th June 2011

What is a Lasting Power of Attorney (LPA) for… and why should I have one?

The IPW code of practice

Why should you write a Will then?

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