Interestingly, a lot of people know about the importance of putting Wills in place but very few know about the importance of putting Lasting Powers of Attorney in place.

Lasting Powers of Attorney are crucial if you were to become mentally and/or physically incapable. Life can be unexpected, and Lasting Powers of Attorney should not therefore just be considered as something to put in place in later life.

According to the Alzheimer’s Society, it is estimated that by 2025, more than 1 million people in the UK will have dementia and currently, one in five people over 85 are already suffering from it, with rates significantly higher among women than men.

What are Lasting Powers of Attorney?

A Lasting Power of Attorney (LPA) gives another individual the legal authority to take care of your financial affairs or health and welfare matters in the event you are no longer able to do this for yourself.

If you do not have an LPA in place and later lose capacity, your relatives may face long delays and crucially, incur a lot of money in applying to the court of protection to obtain a deputyship order to take control of your assets and finances. Critically, you have no control over who makes this application which could mean someone is appointed to manage your affairs who you would not have chosen yourself.

What types of Lasting Powers of Attorneys are there?

There are two types of LPAs: –

  1. Property and Finance; and
  2. Health and Welfare.

Property and Finance Lasting Power of Attorney

Health and Welfare Lasting Power of Attorney

It is important to highlight that an attorney under a property and finance LPA can make decisions for the donor whilst they have capacity if the donor authorises them to do so, whereas a health and welfare LPA can only be used once  the donor has lost capacity.

Choosing an attorney

It is important to ensure that you are appointing attorneys whom you can trust implicitly, they must be over the age of 18 and not bankrupt (in terms of the finance LPA). The attorneys you choose should be willing to take on the role as it is a serious responsibility. They must ensure that they have your best interests in mind when making decisions and they should also adhere to the principles set out under the Mental Capacity Act.  As a donor, you can restrict or specify the types of decisions the attorney can make, and provide guidance.

Whilst you can draft Lasting Powers of Attorney yourself, it is recommended that you seek legal advice as a Private Client solicitor can talk you through your options, explain the authority conferred by the LPA in detail and discuss whether you wish to add any guidance or restrictions. Seeking specialist legal advice will also ensure that the paperwork is completed correctly, that your LPA is properly registered and therefore valid, and most importantly, that it reflects your wishes.

For further advice and assistance please contact our Wills, Trusts and Probate team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

 

 

Lasting Powers of Attorney (LPA) allow you to appoint attorneys, people you trust implicitly, to deal with your financial affairs and health and welfare affairs during your lifetime.

The Office of the Public Guardian expect to register 1 million LPA’s in 2023.

Is it easier to prepare them myself?

Making LPA’s can be a cumbersome process due to the amount of paperwork involved. If a mistake is made within the LPA and this has then be submitted to the Office of the Public Guardian, there is a risk that the LPA will not be registered. This can have a detrimental impact on the donor if anything happened to the donor prior to the LPA being registered for example, if they had since lost capacity. In this situation, the donor would be treated as not having LPA’s in place and there loved ones would need to make an application to the Court of Protection to apply to become deputies instead. This is a lengthy and time consuming process.  

How are they safeguarded?

When making LPA’s it is extremely important that you trust your attorneys implicitly. At the moment the Office of the Public Guardian do not have any powers to investigate those making an application for the LPA’s and to stop registration if they have any concerns. They are reliant on third parties to raise concerns. The Office of the Public Guardian have confirmed that it is quite common for certificate providers to sign the LPA’s and then raise concerns with the Office of the Public Guardian when the LPA’s have then been sent of for registration. Often Certificate Providers are friends or neighbours who would not feel comfortable raising their concerns with the donor themselves.

In the case of Public Guardian v RI [2022] EWCOP 22 (07 June 2022) the Court of Protection determined that the donor did not have sufficient capacity when he made his Lasting Powers of Attorney 12 years ago and, therefore, the Office of the Public Guardian were ordered to cancel them.

This case highlights the importance of ensuring that where a donor may lack the capacity to prepare a Lasting Power of Attorney extra precautions are taken. In order to execute a Power of Attorney, a ‘Certificate Provider’ will need to sign the LPA to confirm that they are happy that the donor has the necessary capacity to make the LPA. The Certificate Provider can be someone who has known you for at least 2 years however, it is advised, especially where capacity is a concern, that this Certificate Provider is a solicitor or a medical professional. In this case, the Certificate Provider could not be traced and, therefore, this meant that the capacity of the donor at the time could not be determined.

It is important that you are fully advised on the implications of putting in place LPA’s and the necessary steps are taken to ensure you have capacity and mitigate any challenges a relative may wish to make against the validity of your Lasting Power of Attorney. Whilst LPA’s can be prepared by the donor, if it was ever questioned in the future it would be a challenge to demonstrate the donor did in fact have the required capacity at the time the LPA was prepared and signed.

For further advice and assistance please contact our Wills, Trusts and Probate team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

 

 

Introduction:

Inheritance tax is an unavoidable reality for many individuals when passing on their assets to loved ones. However, there are legal avenues that allow individuals to minimise this tax burden. One common misconception is transferring property to family members before death. While this may seem like a straightforward solution, it is crucial to recognise the complexities involved and the significance of seeking professional legal advice.

In this blog post, we will explore the importance of taking legal advice before transferring property to family members as a means to mitigate inheritance tax.

Understanding Inheritance Tax in the UK:

In the UK, inheritance tax is a tax on the estate of a deceased individual. The threshold for inheritance tax is currently set at £325,000, known as the “nil-rate band.” Any amount above this threshold is normally subject to a 40% tax rate. For those with considerable assets, this can amount to a substantial tax liability.

There is also the availability of the Residence Nil Rate Band where certain conditions are met. Where applicable, a further threshold of £175,000 can be claimed.

Transferring Property to Family in the UK:

Many individuals in the UK consider transferring property to family members in an attempt to reduce their inheritance tax liability. However, there can be many unintended consequences and this process requires careful consideration and adherence to UK legal regulations. Seeking legal advice from professionals such as our team at Franklins Solicitors, is crucial to ensure compliance and prevent unintended consequences.

How can a solicitor help?

Expert Guidance: A solicitor who is an expert in inheritance tax can provide expert guidance tailored to your specific circumstances. For example, our Wills & Probate team has an in-depth understanding of UK inheritance tax laws and regulations, ensuring that you receive accurate and up-to-date advice.

Personalised Strategies: Our legal experts can assess your situation, taking into account your assets, family dynamics, and future goals, to provide tailored solutions that are both effective and legally sound.

Maximising Exemptions and Allowances: Our experienced solicitors have in-depth knowledge of the various exemptions and allowances available for inheritance tax purposes. They will explore every available option, such as the residence nil-rate band or business property relief, to maximise tax savings for your estate.

Structuring Property Ownership: We can guide you in structuring property ownership in the most tax-efficient manner. We’ll consider trusts, joint ownership, or lifetime gifts, ensuring that you protect your assets while complying with UK tax laws.

Peace of Mind: By seeking legal advice, you can have peace of mind knowing that your assets are safeguarded. Our expertise and attention to detail will help you navigate the complex legal landscape, minimising the risk of errors or unintended consequences.

Conclusion:

When it comes to minimising inheritance tax liability through property transfers to family members, seeking professional legal advice is paramount. Our team of experienced solicitors possess the expertise and knowledge to provide you with tailored advice specific to your circumstances.

By engaging with a solicitor, you can ensure compliance with UK inheritance tax laws, explore available exemptions and allowances, and structure property ownership in a tax-efficient manner. This proactive approach not only safeguards your assets but also provides peace of mind, knowing that you have taken the necessary steps to protect your legacy and maximise the value you pass on to your loved ones.

For further advice and assistance please contact our Wills & Probate team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

 

It is recommended that your Will is reviewed every 3-5 years and not just when a significant life event happens, this will ensure that your Will still reflect your current wishes. Furthermore, you may have had changes in your personal life or finances and your Will may no longer reflect your circumstances and need to be updated to reflect the current changes in the law.

There are several changes that may have occurred to prompt you to review your Will:

A marriage, separation, divorce or re-marriage

Wills are revoked on marriage, unless there has been provision made for this within your Will. Therefore, any Will you had prepared prior to your marriage may no longer be valid and the effect of this is that it will be treated as though you had not prepared a Will at all.

If you have since divorced from your spouse since you prepared your Will, your Will will not automatically be revoked however, any provisions relating to your ex-spouse will fail. Additionally, if you are separating from your spouse, your assets under the intestacy rules will pass to your spouse and this may be something you no longer wish to happen and as such, a new Will will need to be prepared to reflect your current wishes in terms of the distribution of your estate.

Purchase of a house as a cohabiting couple

If you are purchasing a house and are not married, you may wish to consider preparing a new Will to confirm that if anything were to happen to either of you, the survivor is protected within the property. There is no such thing as a ‘common-law’ marriage and as such, your partner would not automatically inherit the property if one of you were to pass away.

Sale of a Property

If you have specifically gifted a property within your Will and you no longer own that property, the beneficiary who has been gifted that property would no longer receive the benefit under your Will and, consequently, may no longer be provided for within your Will. It is recommended that your Will is reviewed to ensure those named beneficiaries whom you wished to benefit will still be benefitting despite your change in circumstances.

Death of a spouse or a named beneficiary

It is important that if a tragedy has occurred in your lifetime, your Will is reviewed to ensure you have stipulated where you wish for your assets to go in the event that your spouse or named beneficiary has predeceased.

Birth of a child or grandchild

Your Will may need to be reviewed to ensure that if you have had a child, you have provided for that child. Additionally, if you have had grandchildren whom you wish to benefit, your Will will need to be updated to provide for them if they have not been included in your current Will.  It may be that you wish to gift sums of money to your grandchildren and a Codicil can be prepared to sit alongside your Will to reflect your new wishes.

Vulnerable or Disabled Beneficiaries

If you have a vulnerable or disabled beneficiary since your Will was prepared, your Will is unlikely to provide for the beneficiary adequately. If the vulnerable or disabled beneficiary is unable to inherit sums of money as it would affect any benefits that they receive, or they are vulnerable and not able to properly manage money, then you may wish to review your Will to ensure that they are adequately provided for and trusts can be used to protect these beneficiaries.

 Changes in your financial position

Your finances may have increased or decreased since your Will was prepared so it is important to review your Will to ensure that it still reflects your wishes. The law does change frequently and changes in your financial circumstances may have inheritance tax implications that might mean your Will is no longer tax efficient.

Alternatively, if your assets have decreased your Will may need to be reviewed. For example, if you had provided for beneficiaries by including large sums of money within your Will and wished for anything left over to go to another beneficiary, that beneficiary may inherit either a much smaller sum or nothing if there are now insufficient assets in your estate to meet the monetary gifts.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

This month we are supporting local charity, Willen Hospice, by taking part in Willen Hospice Free Will Month. The Scheme allows you to prepare a simple single Will or simple mirror Wills in exchange for a donation to Willen Hospice.

Having a Will in place gives you peace of mind that you have specified where your assets are to pass on your death and can help to resolve any family disputes that may arise if you were to pass away without a Will. You can also include specific gifts of personal items or leave a legacy to charity within your Will. Without a Will in place your assets will pass in accordance with the intestacy rules which may mean loved ones you wished to benefit sadly don’t.

The Willen Hospice Scheme provides you with an opportunity to ensure your affairs are in order whilst also supporting an important local charity at the same time.

If you would like more information as to how the scheme works or to discuss this further, please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Hi, my name is Kathryn Thornewill and I’m an Associate Partner in our Private Client Department predominantly based in our Milton Keynes office.

I started at Franklins as a newly qualified Solicitor in 2013, having moved up to Milton Keynes from Cornwall. From the moment I started at Franklins I had the opportunity to expand and grow my knowledge in the area. I became an Associate Partner in 2017 and specialise in Estate Planning, Vulnerable Beneficiaries, LPAs, Probates and Deputyships.

I have always had an interest in the law, my father was a commercial property Solicitor and I was fortunate enough to spend a few weeks work experience at his offices. From there I went on to study Law at University, as a Law degree can provide a solid foundation for a lot of different career paths. However, at University I soon realised that being a Solicitor is what I wanted to do – however it wasn’t until my training contract that I knew that it was Private Client that I wished to pursue.

As any mum will tell you, there is always the dreaded ‘mum guilt’ you cannot escape when juggling a career and a young family. I am however fortunate enough to work a four day week and have an employer who recognises the importance of family life and the value in providing a more flexible working approach. I am able to work my hours around nursery drop-offs and pick-ups, meaning I am able to continue doing the job I love and also be there for my girls.

No two days are the same, but one element which I enjoy about my job is the clients that I meet. On a typical day, I usually have a couple of client meetings, whether that be clients that wish to make Wills or Lasting Powers of Attorney, discuss a loved one’s estate following a bereavement or discussing Estate Planning. Thereafter I may have a few hours of drafting work, for example drafting Wills and then working on a Probate matter. I currently have a member of the team who is training to become a Solicitor so I also spend time with her, answering questions and reviewing her work so that she can qualify as a solicitor next year.

For me, it’s the clients. Helping and advising individuals, couples and families. We tend to see people at some of the most difficult times in their lives and being able to make those times a little bit easier is something we strive to achieve. I also enjoy the many different aspects to Private Client law, which means the work is interesting, challenging and fulfilling.

Don’t think that you have to go to University to become a Solicitor. There are many different routes into a career in law now and it is definitely worth considering all the options so you can choose the route that best suits you.

I have always been made to feel a valued member of the team at Franklins. I enjoy working with people that are friendly, enthusiastic and willing to help. I am grateful to Franklins for the opportunities they have given me and allowing a more flexible approach to my working pattern whilst my daughters are young. We also have a great IT team, who work tirelessly to make sure our systems are some of the best, providing for a better user and client experience.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Deciding how to provide for your children before they reach adulthood can be a difficult process. Parents have a natural instinct to want to treat their children fairly and this decision can be made even harder if a child is vulnerable or has additional learning needs. In this situation it may not be possible for a child to inherit absolutely as it may have unintended consequences, for example it may impact on means-tested state support and services available to your intended beneficiary or make them susceptible to financial abuse.

In situations where a child is unable to manage their finances it is often decided that putting money into a Trust is the best solution.

Broadly there are two types of Trust suitable to this situation:-

1. Discretionary Trusts

This is the most flexible option. The child would be included as a potential beneficiary, together with a number of additional potential beneficiaries, such as other children, family members or charities for example. Including a beneficiary within this list does not give them any entitlement to the funds within the Trust, instead it would be at the Trustees’ discretion to use the funds to benefit the beneficiary within their lifetime. This would allow the Trustees to provide for a beneficiary with additional learning needs, or who is vulnerable, in an appropriate way.  It is important that a detailed letter of wish is written by the testator (the person making the Will) to sit with the Trust, to ensure that their wishes in respect of the Trust are known to the Trustees.

2. Disabled Persons Trust

This is a form of Trust used to benefit a beneficiary who has a statutorily defined disability within the meaning of the Mental Health Act 1983.

This type of Trust however is less flexible than the discretionary Trust. Although other beneficiaries of the Trust can be included, the Trustees’ discretion to make provision for them is limited to either up to £3,000 per year or 3% of the assets (if that is lower). Whilst this may be an attractive option as it prevents excess funds being used for beneficiaries other than the primary beneficiary, if your estate is substantial then it may be that there is a surplus of funds that cannot be advanced out of the Trust to other beneficiaries.

Trustees

It is important that you give careful consideration to who you wish to appoint as Trustees – they will have wide powers and will be tasked with the administrative burden of managing a Trust. They should also understand the needs of the beneficiaries and be able to work together. It is recommended that you seek professional advice about the role and duties of a Trustee before deciding who to appoint.

Letter of Wish

When a Trust is created a Letter of Wish can sit alongside the Will or Trust to provide guidance to the Trustees. This is not legally binding and does not need to be written in formal, legal language, but will greatly assist the Trustees when they are administering the Trust and exercising their discretion in respect of the funds.

It is important to note that each case is fact specific and therefore professional advice should be sought on the appropriateness of each Trust, relevant to the circumstances of each individual.

For advice in relation to Estate Planning, contact our experienced Private Client team today on 01908 660966/01604 828282 or email wills@franklins-sols.co.uk.

The simple answer is yes.

A Will exists to do a great deal more than simply settle your financial affairs. Avoiding disputes between family members, assigning guardians for any children, or setting out funeral wishes are also incredibly important. It may be that you want to ensure that a sentimental item will be passed to a certain person, or in some circumstances you may wish for someone not to benefit from your estate at all. You can also choose to leave gifts to a loved one, friend or charity for example. Without a Will you lose influence over these types of matters. A correctly drawn up Will gives you peace of mind that you have documented your wishes and have specified where your assets are to pass on death.

What happens if you do not have a Will?

Without a valid Will, the rules set out by government, known as the rules of intestacy, determine how your assets will be dealt with – regardless of any wishes you may have had.

The most common misconception is that under the intestacy rules, everything will pass to a spouse or civil partner. This is simply not the case. Consequently, you may be leaving your spouse or partner in a very vulnerable position should you pass away without a Will in place.

The law also does not recognise cohabiting couples within the intestacy rules, which may leave your partner in a vulnerable position should you pass away.

There may also be members of your family, close friends or charities you would have liked to benefit, who won’t under these rules. It could also mean that someone may inherit from your estate that you have not had contact with for many years or simply would not have wanted to benefit.

So, what types of decisions can you make within your Will?

A Will can cover many different aspects depending on your circumstances. In the most common situations, a Will may include some of the following:

There are various other matters which you may wish to include within your Will, for example Trusts for minors, business Trusts, or Trusts over properties, but these do require specialist advice and are dependent on your circumstances.

Here at Franklins Solicitors LLP we are dedicated to assist where we can. If you would like to obtain advice or guidance regarding the preparation of a Will, Lasting Powers of Attorney or would like assistance with a Deputyship Application, please contact our Private Client team on wills@franklins-sols.co.uk or call Northampton: 01604 828282 / Milton Keynes: 01908 660966.

When someone passes away, family members, beneficiaries and executors can be unaware of the importance of unoccupied house insurance and the protection that it brings. When a home owner passes away and the property is left unoccupied there is only a short period of time to notify the insurer and put adequate protection in place.

Grieving family members can often miss this crucial step, which can lead to various problems. For example, if the insurance has been invalidated and a water pipe bursts, as an executor it may be that you could find yourself liable for any damage or the difference in property valuation if you have failed to put comprehensive insurance cover in place.

There is no need to remain with the current providers if you feel that they do not offer enough protection. You will need to check the provider’s terms and conditions and it may be that you will need to make enquiries with other insurance providers in order to ensure that the house is fully protected.

Furthermore, during the winter months it will usually be a condition of the insurance that the property’s water system is drained or the heating is kept to a constant temperature. Another usual condition is that the property is regularly checked and such conditions need to be adhered to. It is also sensible to take steps such as turning off any unnecessary utilities – such as fridges or freezers which are not in use. If there are any assets in the property of either sentimental or significant value it would be suitable to relocate these to a safer place and make a detailed inventory of the items that have been removed from the property.

Unoccupied house insurance can be overlooked at such a difficult time, but the implications of not having such insurance in place can be extremely serious and costly.

If you need any assistance, contact our Estate Administration team today on 01908 660966 / 01604 828282 or at probate@franklins-sols.co.uk.

Remember a Charity WeekFranklins Solicitors LLP are proudly supporting Remember a Charity in your Will Week running from 9th – 15th September.

Every year more and more people are choosing to leave a gift to charity in their Will, once they have provided for family and friends.

There are many benefits of including a charity in your Will, even a small amount can make a huge difference to the causes you care about. Some of our best known charities are especially reliant on gifts in wills, which can account for a third or even a half of their total income. Without such gifts some charities just would not exist or would have to limit the vital services they offer. There are also tax benefits, if you leave at least 10% of your net estate to charity then inheritance tax (if applicable) is discounted from 40% to 36%. 

This week is the perfect time to put a Will in place or review your existing Will. Writing a Will ensures that the people and causes you care about the most are provided for.

For more information, advice or guidance on preparing or updating your Will, please contact our Wills team on either 01908 660966 or 01604 828282 or by email on wills@franklins-sols.co.uk.