Making Sense of Wills – The Jargon

When it comes to sorting out a Will, there’s an awful lot of jargon to try to make sense of. Here are some of the most common terms you’ll come across, and what they really mean.

  • Assets: These are the valuable items you own and cover your possessions, property, cash, etc.
  • Attestation: This is the signing and witnessing of a will.
  • Beneficiary: This is a person or organisation to whom you leave something in your Will.
  • Bequest: This is the term for a gift that you have left to someone in your Will. There are several different kinds, for example a specific bequest is a particular named item, such as a piece of furniture or jewellery.
  • Capital Gains Tax: Changing a solely owned property to Tenantsin Common is a transfer of equity from the sole owner. Technically they are gifting an asset which could give rise to Capital Gains Tax (CGT). However their is a releif against CGT if the property is the main residence. Additionally CGT is not applicable for transfers between spouses.
  • Codicil: This is a document that can be used to change a Will which has already been written.
  • Crown: This is essentially the Government and it is where your money will go if you die without writing a Will.
  • Estate: This is the total of your assets minus the value of any liabilities you owe.
  • Executor: When you write a Will, you need to name an executor. This is the person who is responsible for ensuring your wishes are carried out.
  • Family Interest in Possession Trust: This is for a married couple with an estate value in excess of two “Nil Rate Bands” and benefits from “Spousal Exemption”.
  • Family Probate Preservation Plus Trust: This is used where you wish to pass all or part of your main residence to be controlled and managed by Trustees whilst you are still alive. This requires a Conveyance transferring the asset to the Trustees.
  • Family Probate Trust: This is a discretionary trust with the main feature being that the Settlor can also be a potential beneficiary.
  • Family Trust: To protect the inheritance from various threats rather than the Will directing the assets absolutely to the beneficiaries it is best to direct these assets via a Family Trust. this is a Discretionary Trust where the Trustees decide who and by how much the beneficiaries benefit.
  • Guardian: A person who is responsible for children until they reach the age of 18.
  • Inheritance Tax: This is a tax which is paid on the portion of your estate which is above the nil-rate threshold. Currently, this stands at £325,000 for individuals, though you can now pass on a further £100,000 (rising to £175,000 by 2020) if you are leaving your primary residence to family.
  • Intestate: This is when someone dies without leaving a Will.
  • Legacy: This is another word for a gift or bequest left in your Will.
  • Mirror Will: As a couple it is very common that the content of each individual’s Will mirrors the other.
  • Probate: This proves the Will is valid and gives the executor the authority to administer the estate.
  • Residue: This is the word for what is left of your estate after debts, taxes and certain bequests have been handed out to beneficiaries.
  • Severance of Tenancy: Most couples own their property as “Joint Tenants” which means that on death of one of them, the property passes to the survivor automatically. It will not pass according to your Will. This is similar to how most joint bank accounts and other jointly owned assets are held. By severing the tenancy of a joint property, it is declared that the owners in fact each own a proportion of the property which their wills can direct accordingly on their death. The ownership of the property when this is done is called “Tenants in Common”.
  • Testator: This is the name for the person who has made a Will
  • Trust: You can set up a trust to administer some of your assets after you die.
  • Trustees: These are the people that manage a trust.
  • Witness: A Will must be signed in the presence of two witnesses, who also need to sign the Will.

If you need to speak to a qualified professional about writing a Will or if you have a Will already and not sure if it’s achieving what you need it to, please contact Finance North Estate Planning Services today, on 01782 963 303 or email help@FinanceNorthEPS.co.uk.

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The Cost Of Dying Is Increasing

The Government is introducing a new fee structure that will affect the cost of accessing an estate when someone dies.

Fees for Applications for Grant of Probate or Letters of Administration (for when someone dies intestate) will be changing and could eventually impact you and your family when you’re no longer around.

The new fees will take effect from May 2017. At the moment, the fees are set at either £155 if probate is applied for by a Solicitor or £215 if it is applied for by friends or family. There are no fees if the value of the estate is less than £5,000.

The first change is that estates below £50,000 will no longer have to pay any probate fee. This significantly increases the number of estates exempt from the fees. Unfortunately, everyone one else will see an increase, with those with the largest estates seeing fees of up to £20,000.

The fees are tiered depending on the value of the estate:

  • £50k – £300k = £300 fee
  • £300k – £500k = £1,000 fee
  • £500k – £1M = £4,000 fee
  • £1M – £1.6M = £8,000 fee
  • £1.6M – £2M = £12,000 fee
  • Above £2M = £20,000 fee

These fees are in addition to inheritance tax (IHT).

When somebody dies, the executors must apply for a Grant of Probate from the probate registry. This needs to be done to allow them to administer the estate according to the terms of the Will. These fees need to be paid up front. It may be difficult if the executor is not able to release cash from the deceased’s bank account and/or the executor is on a low wage or benefits.

Previously they may have been able to apply to get help with the fees. However, the Government is also removing probate applications from the general fees remissions scheme and financial help will no longer be available.

There are things to consider which may reduce the amount of probate needing to be paid. In particular, married couples or those in a civil partnership should consider the nature of any property ownership agreements they hold.

Another way to reduce the cost of probate is to consider setting up a Trust. This may lower the value of the estate (from a probate point of view) and drop it from a higher tier rate to a lower one.

Trust law is complex. You will need advice from a specialist to ensure you are setting one up in the most tax efficient way, so that it doesn’t end up costing you more than you hope to save.

For advice on this or any aspect of Estate Planning or Will Writing, please call Finance North Estate Planning Services on 0161 771 2056, or complete the enquiry form below for more information.

VIP R.I.P.

It’s been a grim year for everybody but the Grim Reaper. As we bid farewell to 2016, we ask why it’s been such a bumper year for celebrity deaths…

 “Why are so many celebrities dying in 2016?” asked the Daily Mirror, whilst people on Twitter expressed that their tolerance was subsiding, “Enough, 2016!”

 Other users of the site posted pictures under the tag line “Me at the beginning of 2016 versus me at the end of 2016” – the first an upbeat image of a character such as Kermit the Frog and the second showing the same figure beaten down by life; a bedraggled mess.

So why has 2016 been such a good year for the Grim Reaper when it comes to celebrities?

Experts have come up with a few reasons. Thanks to the proliferation of media over the past few decades, there are more stars around these days, for one. In the early part of the 20th Century, before television, the only celebrities were film stars. Social media also plays a role. As well as creating new stars, it also means that we hear about celebrity deaths far faster than in the past in addition to providing everyone with a platform to publicly share their grief. Then, there’s the fact that many of those who died in 2016 were baby boomers – people aged between 52 and 70. With so many born into that generation, it makes sense that lots of them went on to become famous.

One numerological theory is that 2016’s bad luck is due to its digits adding up to nine, the number commonly associated with completion and endings.

What is incontrovertible, however, is that 2016 was the year that reminded us that death is inevitable, regardless of how rich and famous they are. It also reminded us of the importance of writing a will. Whilst Alan Rickman left £100,000 to charity, David Bowie similarly planned sensibly, setting out 20 pages of instructions on how his estate should be divided. This included his wish to have his ashes scattered on Bali after a Buddhist ceremony. On the other hand, Prince died intestate, with drama ensuing over his £300m estate as various people claimed to be his blood relatives.

Although more famous faces will stay the course this year, January 2017 is still a good month to reflect on our own mortality and get our estates in order – even if they aren’t of A-list proportions.

Here at Finance North Estate Planning Services we are here to help you write your Will and we offer all our clients a red carpet service, so give us a call now on 0161 771 2056 or complete the enquiry form below.

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The Pitfall of Gifting Assets

It’s no secret that there is a care crisis in the UK.

In order to deliver social care, the Government is being forced to consider increasing council tax to help cover the costs. However, the cost facing the individual, should they require care, could be very high too.

If you have savings and assets worth more than £23,250 in England and Northern Ireland (rising to £24,000 in Wales or £26,250 in Scotland), or a weekly income high enough to cover care fees, then you will not be eligible for local authority funding. In other words, you’ll have to pay for your own care.

In order to reduce their care liabilities, older people may therefore look to giving away their assets to loved ones. However, where gifting is concerned, there are strict rules which must be followed.

  • Deliberate deprivation

It’s not easy to hide the fact that you may have tried to give your property away to your children or grandchildren. Local authorities will carry out a financial assessment, looking not only at your current assets, but also those that you have previously owned.

If they believe you have given away assets intentionally, in order to qualify for funding from the local authority, they may find that you have indulged in ‘deliberate deprivation’. This may include selling assets for less than their true value, as well as giving them away.

  • What makes it deliberate?

To determine whether the disposal of assets was deliberate, the local authority will look at a number of things. These include:
– What your apparent motive was,
– The timing of the gift (i.e. the time between you realising you need care and when       you disposed of the asset),
– The amount of assets involved.

For example, they are less likely to investigate you if you give away £500 than if you are handing over £50,000.

If it is found that you have deliberately deprived yourself of those assets, even if you no longer own them, their value may be considered in the financial assessment. If the local authority does fund someone’s care costs, and later discover that the individual deliberately deprived themselves of assets, they can pursue that asset transferee in order to recover some of those care costs.

It’s not just during your life that you need to carefully plan how to hand your assets over to your loved ones. It is also vital to put together a plan for what happens after you die. This means ensuring you have a professional will in place. With important issues such as these, it pays to work with those who really know what they are doing. We can help.

For more information with protecting your assets during your lifetime and after your death call Finance North Estate Planning Services on 0161 771 2056, or enter your details in the enquiry form below.

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Ever thought your life’s turning into a soap opera?

However complicated things get, be glad you’re not one of Coronation Street’s Platt family. When bad girl turned good Kylie Platt departed our screens for the last time in July 2016, stabbed to death in an emotional scene that practically caused a countrywide flood warning, she left a right old mess behind. Oh Kylie, if only you’d taken our advice here at Finance North Estate Planning and written a will!

Who’s the Daddy?

Poor little Max Turner – he’s only ten and his family tree is sprouting extra branches and exploding into a veritable forest. Kylie gave birth to the blond-haired boy when she was just 19 but her hedonistic lifestyle made social services intervene and place him in foster care. Kylie fought to get him back, before selling him to her half-sister for £25,000. Then she abducted him and social services intervened again before she and her husband David Platt applied for – and won – custody. But Max’s newfound stability wasn’t too last long. Now, with Kylie and his birth father Callum Logan gone, David is fighting Callum’s family for custody. Confused? Imagine how Max must feel!

Gaudy goodbye?

At only 29 and in good health, Kylie hadn’t made a will or set out funeral plans so it was up to husband David and son Max to reflect her, ahem, colourful personality in her send-off to the great cobbles in the sky. Mourners were instructed to wear bright hues – a request Kylie’s mate Gemma took very seriously – and Destiny’s Child’s Bootylicious boomed out, shocking the vicar and some fans of the soap. ‘Kylie’s funeral looks more like the circus has come to town than a sombre farewell to a wife and mother,’ one tweeted.

If you’d prefer your departure to be a little more dignified – Beethoven instead of Beyoncé perhaps – and don’t want any old Tom, Dick or Harry squabbling over your children’s custody we’d recommend writing a will.

Here at Finance North Estate Planning our will writing services start at £95.00 so call us on 0161 771 2056 or email us at help@financenortheps.co.uk to book an appointment. We promise – we won’t make a drama out of it!

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Lasting Powers of Attorney – what are they and what do they do?

 

This summer Sir Jackie Stewart announced that his wife Lady Helen Stewart is suffering from dementia.

The world champion Formula One driver explained that his wife now requires around the clock care. Lady Helen, 68, was diagnosed with dementia 2 years ago, but this is the first time the racing driver has spoken about the changes he has seen in his wife.

According to the Alzheimer’s Society 225,000 Britons each year are diagnosed with the condition. It further highlights the need for people to have LPAs (Lasting Powers of Attorney) in place.

If mental capacity is lost prior to making a Lasting Power of attorney it can cost thousands of pounds through the Court of Protection.

Contact us today for written details of what a Lasting Power of attorney does, and how you can go about organising one.

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Estate Planning Services

0161 771 2056
help@FinanceNorthEPS.co.uk