Yes you can handwrite your Will but it needs comply with the Wills Act of 1837 in order for the Will to be valid. If your handwritten Will, known as a Holographic Will, fails to meet these legal requirements, it will be invalid. Either an old Will you had previously prepared (and wanted to change), or the Intestacy provisions as set out in law, will distribute your estate to beneficiaries you had probably not wanted to benefit.

Can you handwrite your Will?

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For those familiar with finding distant relatives who might be abroad, the prospect of the looming spectre of the Intestacy provisions will cause difficulties.

Even if your handwritten Will is legally valid, is it clear enough to be understood and what happens if, like Veljko Aleksic, your handwritten Will was ambiguous in its gifting and not clear enough to know what he intended to do with his £2m+ estate?

In this case the Court can get involved and, sometimes, sort it out. But it’s sensible to consider the costs involved in terms of legal and court fees. Not to mention the delay. It took 3 years to resolve Aleksic’s estate. You’ll need to weigh up the risks involved in writing your own Will, compared to getting a Will drawn up by a professional and all the underlying advice too.

Case Study

Veljko Aleksic was originally from Montenegro. Although he lived in England for decades, and became a British citizen, he never became grammatically fluent in the written language. He had no direct descendants.

Aleksic handwrote his own Will dealing with his £2m+ estate, at an unknown time in 2012, and in a highly informal style. Fortunately, it was at least signed by him and witnessed by 2 people but it did not comply with other formalities.

No one was specifically named as an Executor, the Probate Registry did not like the term describing someone to be “in charge” and so there was no one entitled to apply for Grant of Probate. Letters of Administration were eventually obtained after a friend and 2 solicitors, one of whom was a Serbian speaker, got involved and once extra evidence was obtained from the witnesses.

Much of the wording was not clear – notably, it left most of his £2m estate to the Serbian Orthodox Church without specifying which of the several churches he meant.

One cash legacy of £10,000 was left to ‘Brit. Cancer Research’ but there is no such organisation.

Another cash legacy went to someone, but the words immediately following the name, containing the amount to be given, had been obliterated. Then, after what was obviously a telephone number, the words ‘£2.000. Two’ appear.

Other passages only added to the confusion.

The cancer charity legacy was resolved but it required an application to the Attorney General’s Office for the bequest to be disposed of by Her Majesty under the Royal Sign Manual, dividing the legacy between a number of named British cancer research charities.

For the other irregularities, the administrators had to go to court for guidance.

Luckily for everyone, the Judge took a pragmatic approach. Aleksic’s poor English, he said, complicated the task of ascertaining his intention – but did not alter it. ‘Bad English can still make a good will, as long as the testator’s meaning can be understood’, he said. ‘Despite the difficulties, most of what the will provides is clear.’ Using various other documents, and consulting the extensive legal literature on irregular wills, as well as Montenegrin law, he was able to determine the distribution of the estate without resorting to any partial intestacy.

For advice in relation to writing a Will, contact our expert Team on 01908 660966 / 01604 828282 or email Wills@franklins-sols.co.uk.

As you may be aware, there are two types of Lasting Powers of Attorney; the first relates to Property and Finances and the second relates to decisions in respect of your Health and Welfare. Lasting Powers of Attorney give the individuals appointed (known as the Attorneys) a wide range of powers and therefore, it is vital that you fully understand the legal implications of putting the same in place.

Lasting Powers of Attorney

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This neatly leads onto a question we usually get asked by clients: ‘do I need a Solicitor to prepare their Lasting Powers of Attorney, especially in light of the fact that the paperwork is readily available online for completion’. Whilst the latter option may seem more beneficial from a financial perspective, in the long-term the lack of legal advice could mean you face problems in the future or, there may be unforeseen consequences to your decisions which may put you or your loved ones at risk.

Safeguards

A Solicitor would usually go through with you (as the Donor) any safeguards you may wish to include, together with any preference or instructions you may wish to leave to guide your appointed Attorneys. For a Property and Finance Lasting Power of Attorney, this may include provisions relating to consulting individuals or professionals (such as your Financial Advisor) before making certain decisions, make provision for your Attorneys to keep accounts or may even allow for provision to continue where you are responsible for maintaining someone.  In respect of the Health and Welfare Lasting Power of Attorney, instructions or guidance can be included in relation to decisions being made in respect of Life Sustaining Treatment, your wishes in respect of what treatment you do or do not wish to receive and guidance on lifetime choices. Careful consideration will need to be taken when deciding to include  any provisions you would like to put in place but also the consequences of any instructions on the workability and flexibility of the documentation

Timescales

Whilst completing the forms online may seem to be easier, the signing process can be quite complex as each documentation is over 20 pages long and will need to be signed and dated in the correct order otherwise, the application will simply be rejected by the Office of the Public Guardian with a request for individuals to resign their relevant sections. Bearing in mind an application is currently taking in the region of 2 – 3 months to process, even without delays, the making of mistakes on the application can make a lengthy process even longer, which may not be desirable if you require the paperwork urgently to action a decision.

One thing we always recommend to clients as well is to prepare and register the Lasting Powers of Attorney straight away, despite the fact that they may not be needed as of yet. This will ensure that should you require the Attorneys to step in in unforeseen circumstances, they are able to do so without having then to wait for the paperwork to be registered before they have legal authority to act.

If you would like advice or guidance regarding the preparation of Lasting Powers of Attorney, contact Natasha and our Private Client Team on 01908 660966 / 01604 828282 or email PrivateClient@franklins-sols.co.uk.

A report published by The Lancet Public Health in 2018 suggested that the number of adults aged 65 and over needing 24 hour care will almost double by 2035. There has been a lot of media coverage over the years in relation to homes being sold to fund care home fees as for most people, the family home is their main asset. The question we get asked most from our clients in planning their futures is: “What can I do to prevent this from happening?”

Protecting your home from care home fees

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Gifting Property

A common misguided perception is that you can gift the property to your intended beneficiaries during their lifetime and this will prevent it from being sold to pay for care fees. While you can do this, this option is not always effective and it exposes you to a number of risks you should consider. These risks sometimes outweigh the risk you are trying to avoid.

You may indeed run the risk of losing the property in other ways, for example, one of your intended beneficiaries might become bankrupt and their share of the property will be acquired by the Trustee in bankruptcy. Alternatively, one of your intended beneficiaries may go through a divorce and your property will be considered part of their matrimonial assets when finances are being dealt with. In essence if you gift your property away, it no longer forms part of your assets and you have no control of what happens to it. This limits your ability to control the property and your options for the future.

Trusts

What you can consider doing is putting your property into a Trust. This provides an element of protection so that the home does not usually have to be sold to fund care home fees. The benefit of writing the property into a Trust is that you can protect some or all of it from being used to pay for care home fees in the future – but still retain security that you have somewhere to live.  There are possible consequences to setting up a Trust over your home such as what if your Trustees go away or are hard to track down, or if they are professionals have they been closed down, say by the SRA.  What ongoing costs are there?  In addition to this uncertainty the local authority can elect to ignore the Trust you set up on the basis you are doing it to avoid care fees.  A better way might be to use your Wills to manage what happens to your home.

A carefully drafted Will can provide that a share of the family home passes into a Trust on first death, which may give the survivor a right to occupy. With care, such a Trust will ensure that the capital will be preserved and instead pass to the intended beneficiaries. A Trust of this type can be drafted flexibly to allow the survivor to ‘down-size’ or move property.

For further information in relation to putting in place Wills and Trusts in place, contact the Private Client Team on 01908 660966 / 01604 828282 or email PrivateClient@franklins.co.uk.

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Have you ever considered what would happen if you were in an accident or if you were diagnosed with a condition which meant that you could no longer make decisions for yourself?

If only we could see what the future holds? Maybe we would then be in a better position to plan for what is to come. No one has the answer but this doesn’t mean that you can’t plan ahead for some eventualities.

It is a common misconception that your spouse or civil partner would automatically be in a position to deal with matters for you. Some also think that their ‘next of kin’, perhaps a child, parent or sibling, would be able to help instead. Unfortunately, they too do not have the legal right to deal with matters on your behalf.

This leaves many people in a vulnerable position. Family members, may find themselves in the position that they are unable to access information regarding your assets, even in order to keep paying your bills or dealing with your day to day care.

So, what can you do to prepare for your future?

Lasting Powers of Attorney – what are they?

A Lasting Power of Attorney allows one or more people you Trust implicitly – called “Attorneys” – to make decisions on your behalf, known as the “donor”. There are two types of Lasting Powers of Attorney:

Both Lasting Powers of Attorney are a legally binding document recognised by financial institutions, such as banks, plus government bodies which allow you to appoint individuals closest to you to assist you during your lifetime. Guidance and conditions can also be included to ensure that you are protected whilst also providing your appointed Attorneys with some guidance, which will help them to make decisions in the future.

Lasting Powers of Attorney must be registered with the Office of the Public Guardian before it can be used. In the case of Property and Financial Affairs Lasting Power of Attorney, these can be used prior to the donor losing capacity, if the donor wishes at the time of the Lasting Power of Attorney being created.

A Lasting Power of Attorney can therefore best be described as an insurance policy and while it’s hoped it will never need to be used, it’s there just in case.

What if it’s too late and your loved one has already lost capacity without putting a Lasting Power of Attorney in place? – Deputyship

If you don’t have a Lasting Power of Attorney and you lose the ability to manage your own affairs, the alternative is Deputyship. This is a slow and expensive process (usually around 6 – 12 months), involving an application to the Court of Protection.

This therefore makes it extremely difficult for the person looking after you, as they won’t have legal authority to help you until after the authority is granted.

Health and welfare deputyships are uncommonly granted by the Court of Protection and are usually seen as a last resort. Instead, an order may be made to assist with a specific issue rather than delegating full decision-making power. This is because the Court prefers to retain powers in this respect given the sensitive and often complex nature of the decisions to be made.

If you’d like more information about Lasting Powers of Attorney contact our expert Private Client Team on 01908 660966 / 01604 828282 or email PrivateClient@franklins-sols.co.uk.

Make a Will

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What happens if you do not make a Will?

If you decide to not make a 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 couple 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, or over properties, but these do require specialist advice and are dependant on your circumstances.

Other benefits of making a Will

Having a Will in place lets you provide for the loved ones you leave behind and provides peace of mind that your executors will know who they are and what your wishes are, this they will be able to distribute your estate accordingly.

If you would like to obtain advice or guidance regarding preparing or reviewing your Will, please contact the Private Client team on 01908 660966 / 01604 828282 or email Wills@franklins-sols.co.uk.

 

According to a recent article, HMRC have seen a record high of £274million in respect of inheritance tax claimed from over 5,000 investigations undertaken in the 2019-20 tax year. For clarity, an investigation by HMRC is undertaken to ensure that all assets have been accounted for when completing the relevant tax paperwork to apply for the Grant of Representation.

The duty to ensure that correct tax is paid lies with the executor appointed within the Will or the administrators of the estate if no Will was prepared. When acting as an executor or administrator, you will need to account to HMRC for all assets within the estate, all debts/liabilities which are being deducted and any exemptions or reliefs that are being applied to reduce the inheritance tax liability.

There are many pitfalls for the unwary executor/administrator when dealing with Inheritance Tax (IHT), they range from not applying a relief correctly to estimates being passed off as date of death valuations.

The valuation of any asset is done at the date of death on its open market value between an unconnected buyer and seller, and one of the most common areas of investigation are valuations of property, investments and, increasingly, chattels.  A vague low value estimate, especially of property or works of art, will stand out when an IHT return is reviewed and trigger an investigation.

As far as reliefs are concerned these need to be used correctly as the wrong nil rate band calculation being used or negligently applying a charity exemption could lead to a rather expensive additional IHT liability for the beneficiaries of the estate and they may well take action against the executor or administrator for the costs of this, such as interest and penalties, if it was personal representative negligence that lead to the incurring of these costs.

The most common forms of exemption/reliefs are as follows:

There are however some other obscure reliefs that may be available which some may not be aware of when calculating the inheritance tax liability of an estate. A few of these are provided below.

Quick Successive Relief (also known as QSR)

This relief is available where a deceased has inherited from another estate within a short period of time before their death. In order for the tax relief to be claimed, the two deaths must be within 5 years of one another and inheritance tax must have been paid on the asset when the first person passed away.

Depending on how long the individual survived, will depend on the relief available. For example, if the deaths are within a year of one another then 100% relief from inheritance tax on that proportion of the estate is received. If however, they survived three and a half years, then the relief is reduced to 40%.

Business Property Relief

This relief is very simple on the face of it.  If you own a business or have shares in a company and have done so for 2 years or more you can leave up to 100% of this tax free to a beneficiary in your Will.  The reality is not that simple.  There are several conditions and the most important of these is that the company that you own shares in or business you run must have been trading for most if not all of the period of the deceased’s ownership.

The trading requirement is the most contested aspect of this relief.  For the purposes of claiming this relief a company or business must be trading rather than just holding investments.  The most common example of this distinction is property owning companies that rent out office space.  The company is trading in a literal sense of the word but for IHT purposes is just earning investment income and therefore BPR is not available or restricted to the pure trading aspects of the business, if there are any.

Agricultural Property Relief

Like BPR above this is another seemingly straightforward relief.  The relief works by making farms, the houses, buildings and farmland, i.e. agricultural land, tax free.  What qualifies as farming to the lay person does not always mean that HMRC regard the farm or its activities as qualifying for APR.

It works by relieving the entire agricultural value of farm land and farmhouses from tax.  Importantly it does not exempt the market value of the land and house being relieved and this might be more than its agricultural value, so caution has to be paid as how it is valued and a professional valuation is essential when attempting to claim this relief as trying to claim the whole value of the land may end up with an investigation and more tax being paid than was bargained for.

This like BPR is a very heavily litigated area with the main thrust of disputes between estates and HMRC coming from whether a farmhouse is actually one at all.  The other pitfall with this relief is hope value and this comes from where the farmland has development potential and this can also be a taxable asset so when asking for a valuation is best to make sure the surveyor carrying out the valuation investigates its planning potential.

It is important to note that administering an estate and calculating an inheritance tax liability can be complex depending on the assets within the estate and what exemptions or reliefs are to be claimed. As such, we do advise that you seek specialist advice in these circumstances to ensure that should an investigation by HMRC be issued, all necessary steps have taken to finalise the inheritance tax account with HMRC prior to the estate being distributed. If the estate has been distributed and an investigation is issued by HMRC, this may leave the executor or administrator in a position where they have insufficient funds to settle any additional tax as the estate has already been distributed.

If you require advice in relation to the administration of an estate contact our expert Private Client team on 01908 660966 / 01604 828282 or email PrivateClient@franklins-sols.co.uk.

You may have seen the announcement by the Ministry of Justice on 25th July 2020 advising legislation coming into effect in September 2020 which enables individuals to video-witness the execution of their wills if they are unable to observe the normal formalities, and cannot have two independent witnesses present.

For many this has been a welcome advancement in light of the current pandemic which resulted in many having issues executing their Wills to ensure that their wishes will be followed. Having said this, there has been a lot of speculation as to how this will work in practice and much concern has been aired in relation to the potential of increased probate litigation as a result.

So, is it really as easy as it may sound to simply sign your Will using video facilities such as Skype, Zoom or Facetime? The simple answer is no.

I have set out below some guidance provided by STEP in their recent briefing note to provide some further information in respect of the process:

Step 1: The Will maker (Testator) must ensure that both witnesses (if they are both witnessing remotely) can see them, and each other, clearly. This may involve a three way video call.

Step 2:  The Testator should hold up the front of the will to show to the witnesses and then turn to the page that they will be signing and hold that up for the witnesses to see. The Testator should then sign the Will, making sure that both witnesses have a good line of sight. The Will should be dated. The witnesses should confirm that they can see and understand what they are witnessing.

When signing, it would be advisable for the Testator to say, ‘I first name, surname, wish to make a will of my own free will. I am now signing the will before these witnesses (who should both be named), who are remotely witnessing me sign it.’ Alternatively, a professional will writer will include a specific attestation clause within the Will to cover the remote signing.

Step 3: The Will should then be posted to the first witness. A further video call should take place with all parties present, ensuring the same visibility and line of sight as before. They should hold up the Will to show the cover and signature page. They should then sign and provide their details. They should not date the Will. This process may need to be repeated again for the second witness if they too are remotely witnessing.

It is also advisable that the whole process outlined above is recorded. This is to assist should someone decide to contest the Will at a later date and will provide evidence to the signing and validity of the Will.

As you will see from the above, it isn’t as simple as simply signing your Will via video link and certain practices still need to be carried out. The process itself can also be time consuming with having to send the original Will to each party for signature. This is particularly important when taking into consideration that the Will will not be valid until it has been witnessed by the two witnesses.

Signing your Will by video link may on the face of it seem appealing to many but when considering the steps that need to be taken and the consequences of signing your Will incorrectly, we would strongly advise that this method of signing is only considered as a last resort.

If you require assistance in respect of preparing your Will during this difficult time, please do get in touch with one of our Solicitors in the Private Client team on wills@franklins-sols.co.uk or 01908 660966 / 01604 828282. We have adapted our practices by providing telephone or video appointments to take the your initial instructions, garden appointments if you require a face to face meeting and we are also happy to meet with you to sign your Will if you are struggling to get your own witnesses.

A recent article prepared by my colleague Ellen Stiles highlighted the importance of preparing a Lasting Power of Attorney, especially in light of the current pandemic where they have been invaluable, not only for the vulnerable and elderly, but to a much wider group of people from all sections of society, who have required assistance through lockdown.

Following on from this article, the Office of the Public Guardian (the OPG) have recently unveiled an online platform which now allows an Attorney to create an account whereby they can upload a copy of the registered Lasting Power of Attorney. The Attorney can then get an access code that they can provide to the relevant organisations to prove their authority to act. Prior to this platform, paper copies of the Lasting Power of Attorney needed to be provided, which could then take several weeks to process causing delays for the Attorney(s) who needs the authority on the relevant account to act.

It is important to note that the online forum is only being rolled out for Lasting Powers of Attorney registered from 17th July 2020, although the OPG are looking at extending it to Lasting Powers of Attorney registered before this date.

We do however advise that, although the online service may make the process more convenient for Attorneys and has received good feedback according to the OPG, caution must to be still be taken as, with any online platform, it could be open to abuse and safeguarding the Donor (the person making the Lasting Power of Attorney) must remain paramount.

For more information on Lasting Powers of Attorney, contact our friendly Private Client team today on 01908 660966 / 01604 828282 or email PrivateClient@franklins-sols.co.uk.

The recent case of McCarthy v McCarthy of 10th July 2020 saw the Court uphold the Will of the late Margaret Wilcox despite the circumstances in which it was prepared being questioned by two of her children who argued undue influence. 

In this case the Will of the late Mrs Wilcox had been written by the beneficiary who stands to inherit the deceased’s property and was subsequently signed in the presence of the said beneficiary’s best friend and his wife. 

It is important to note that despite the Will being upheld by the Court, the manner in which the Will was prepared was considered ‘concerning’ according to the Judge. Although the circumstances were concerning, there were however other factors which affected the Judge’s decision in this case, including a Deed in relation to the same property, and each case will be decided on its own facts.

What this case does highlight is the importance of seeking specialist advice when considering the preparation of your Will as the outcome of this case could have been significantly different given the concerning background facts regarding the manner in which the Will was prepared, together with the late Mrs Wilcox’s Alzheimer’s diagnosis earlier in the year.

Through using a Solicitor, your wishes will be noted together with your reasoning as to why you wish for your estate to be left in a certain way. This will provide evidence to the court should your Will ever be contested in the future and assists with providing a background in respect of the decision making process. Capacity issues would also be noted and any concerns may result in a capacity assessment being undertaken to provide the Will with a greater degree of security.

This case also highlights the importance of documenting your intentions, as here case the Deed relating to the property was a significant contributing factor in the decision to uphold the Will of the late Mrs Wilcox.

If you would like to obtain advice or guidance regarding the preparation of a Will or Declaration of Trust relating to your property, please contact our Private Client team on wills@franklins-sols.co.uk or call Northampton: 01604 828282 / Milton Keynes: 01908 660966.

As of today, 6th April 2020, the Residence Nil Rate Band (RNRB) has increased to £175,000 per person.

Q: So, what is the Residence Nil Rate Band?

A: The RNRB is an additional inheritance tax allowance which came into force in April 2017. The allowance was initially set at £100,000, increased each tax year by £25,000 until tax year 6th April 2020/21 where it is set at £175,000, increasing the following tax years in line of inflation.

The additional inheritance tax allowance is available when you leave a ‘qualifying property’ directly to a ‘direct descendant’.

Q: What is a ‘qualifying property’?

A: Only one property can qualify for the RNRB and therefore, if you own and lived in more than one property, your executor can pick which property to apply the tax relief to.

What is essential is that the person who has died, must have owned and lived in the property at some point during their lifetime.

Q: What happens if I sell a property before my death that would have qualified?

A: This may not be a problem, as the government have provided for this scenario within the ‘downsizing provisions’. This is a complex area and professional advice may be required to assist with the calculation to ensure that the correct tax allowance is applied.

Q: Who is considered a ‘direct descendant’?

A: Accordingly to government guidelines:

This also includes:

Q: What if I don’t use it?

A: This is quite common, especially where a married couple leaves everything to the survivor on first death. The law provides for this scenario and confirms that the RNRB, or a proportion of it, can be transferred between spouses. This is known as the Transferable Residence Nil Rate Band. Therefore, provided that the surviving spouse leaves a qualifying property to a direct descendant, then the allowance can be claimed.

It is important to note however, that, as with other provisions relating to Inheritance Tax, the additional tax allowance can only be transferred between spouses/civil partners. It does not apply to cohabitees.

Q: What does this mean for Inheritance Tax?

A: The current rules provide that a married couple, leaving everything to each other and then down to children may have a combined tax free allowance of £1,000,000. This includes the Nil Rate Band currently set at £325,000, together with the RNRB of £175,000, both of which can be transferred between estates of spouses if unused.

For everyone else, this provides that they may have an allowance of £500,000 (taking into account their own Nil Rate Band of £325,000 and their Residence Nil Rate Band of £175,000) provided that the criteria for claiming the same are met.

Q: So, what do you need to do?

A: You may wish to give careful consideration to preparing or reviewing your Will to ensure tax efficiency in light of recent changes. Specialist advice is recommended as the manner in which your Will is prepared may affect the eligibility of the Residence Nil Rate Band. For example, the use of Trusts may affect it’s availability but will depend on the type of Trust itself. 

For advise and assistance in relation to future and Estate Planning, contact our expert Private Client team today on 01908 660966 / 01608 828282 or email privateclient@franklins-sols.co.uk.