Uncategorized

Inheritance Tax – it’s here to stay

Like it or not Inheritance Tax (IHT) is here to stay.  It’s been around for decades and is colloquially known as “Death Duties”.  It is a tax on the value of your estate when you die. 

The rules relating to IHT have changed considerably since 2007.  Effectively now the threshold at which IHT is chargeable on the estate of a “typical” couple (i.e. married with children and owning a property) is £950,000 and this rises to £1,000,000 in 2020.  This means the rules relating to IHT are considerably more favourable to such families than they were before 2007.

However, there is one significant exemption which is probably underused for wealthy individuals.  This is the exemption for lifetime gifts made out of income.  Ordinarily gifts made within 7 years of death are added back to the estate for IHT purposes.  However, there are various exemptions that can be used against such gifts and one exemption applies when gifts are made regularly out of surplus income.  If someone makes regular gifts to another person(s) (typically children or grandchildren) the gifts can be considered to be exempt from IHT if the donor is simply giving away spare income. This applies even if the gifts are substantial.  If for example a donor had a substantial income (let’s say £80,000 per annum) and their day to day living expenses (utilities, travel, holidays, food, clothing etc) are only £50,000 per annum, then there is clearly a £30,000 surplus each year. If the donor gives away that sum each year by regular giving then those gifts are exempt from IHT on death.

It is important for wealthier donors to be aware of this and make use of such exemptions. They should keep a record of the gifts to assist their Executors in claiming the exemption after death.

There is no substitute for obtaining up to date advice on this subject.  Please therefore contact any of the following who will be able to assist.

Tom Morrish tel. 033 3344 9609 email tom.morrish@morrishsolicitors.com

Monika Volsing tel. 033 3344 9609 email monika.volsing@morrishsolicitors.com

Kiranjeet Chana tel. 033 3344 9606 email kiranjeet.chana@morrishsolicitors.com

Christina Taylor tel. 033 3344 9606 email christina.taylor@morrishsolicitors.com

Uncategorized

We are family! Or are we?

The definition of “family” is changing. It used to be the nuclear unit of husband, wife and 2.4 children. Although the divorce rate has been going down recently, numbers of cohabitants are rising. And the belief you can be a “common law” husband or wife still exists, despite it being a myth. So what constitutes a family and is this going to change in the eyes of the law?

When it comes to the Rules of Intestacy, i.e. what happens when someone dies without a Will, should cohabiting couples be treated in the same way as married couples or civil partners?

Currently, a cohabitant whose partner dies must go to Court for financial provision from their partner’s estate, regardless of how long they lived together or if they had children together. They are not automatically entitled to anything.

At least this is better than Washington, USA, which does not give any recognition to cohabiting couples. But not as good as British Columbia, Canada (and multiple other states and countries), which treats cohabitants in the same way as spouses.

What about if there is more than one “spouse”? In British Columbia, the division is determined by agreement between the spouses, which sounds like it could be fraught with problems to us! New Zealand law allows equal sharing between multiple spouses. Norwegian law prevents recognition of cohabitation where the deceased was also married.

And should stepchildren be treated in the same way as biological or adopted children under the Rules of Intestacy, who automatically inherit? They are not at the moment and would have to go to Court to prove they were treated as a “child of the family” or were financially dependent on the deceased.

This shows that the Rules of Intestacy may always be flawed, no matter how the law changes them, as the definition of family evolves and the law struggles to keep up with it. If you want to protect your family, whoever that is and whatever that might mean, the best thing to do is to consult a solicitor to draft a properly constructed Will. Then there will be nothing for you to worry about, or rather for your family to worry about, after you die.

We are here to help with your Will, whatever your circumstances. Please contact:

  • Tom or Monika at our Yeadon office on 0333 3449609
  • Kiranjeet or Christina at our Pudsey office on 0333 3449607
Probate, Uncategorized

The Government unleashes new plans to increase Probate fees

What are Probate fees?

When someone dies and leaves an estate, an executor or a personal representative will need to collect in all of the deceased’s assets and administer the estate. Depending on the assets, in most cases, the executor or personal representative will have to obtain a grant of representation to allow them to release monies from the deceased’s accounts with banks, building societies etc.

At the moment, if an estate is above £5,000, the fee to obtain a grant is at a flat rate of £215 if applying in person, or if you apply through a solicitor, £155.

What is changing?

The threshold at which you’ll need to pay probate fees is set to be lifted to estates over £50,000. So, if an estate is valued at less than £50,000 you will not have to pay a fee.

If your estate is worth more than £50,000, then fees will depend on the amount the estate is worth:

  • Estates worth from £50,000 up to £300,000 will pay £250, a rise of £35.
  • Estates worth from £300,000 up to £500,000 will pay £750, a rise of £535.
  • Estates worth from £500,000 up to £1 million will pay £2,500, a rise of £2,285.
  • Estates worth from £1 million up to £1.6 million will pay £4,000, a rise of £3,785.
  • Estates worth from £1.6 million up to £2 million will pay £5,000, a rise of £4,785.
  • Estates worth more than £2 million will pay £6,000, a rise of £5,785.

When is this happening?

The Government has stated the proposed changes will happen in April 2019.

Contact us for further information

If you’re an executor or a personal representative and are handling a large estate, it is advisable to obtain a grant before the new changes are in force – we can help with this.

To speak with one of our team at Morrish Solicitors LLP who specialise in this area, please contact us.

Pudsey Office:

Christina Taylor and Kiran Chana

9 Lowtown, Pudsey, LS28 7BQ

033 3344 9606 (Local Rate)

Yeadon Office:

Tom Morrish and Monika Volsing

61 High Street,Yeadon, Leeds,  LS19 7SP

033 3344 9609 (Local Rate)

Lasting Power of Attorney, Uncategorized

GDPR & Lasting Power of Attorney’s – why it’s more important than ever to put a Lasting Power of Attorney in place

What is a Lasting Power of Attorney & why you need one

A Lasting Power of Attorney is a document which lets you decide who you wish to help make decisions on your behalf in relation to your property and financial affairs and health and welfare when you are not able to make those decisions yourself.

Be aware that you are only able to make a Lasting Power of Attorney whilst you still have sufficient mental capacity.

It seems daunting to think of a time when you may lack capacity whether it be through illness, your age or an accident however, it is sensible to prepare for the future.

What is GDPR?

GDPR stands for General Data Protection Regulations. GDPR came into force on 25th May 2018. It is designed to modernise Laws that protect the personal information of individuals. It replaces a new emphasis on how personal data is stored and used.

GDPR and Lasting Powers of Attorney

GDPR has brought in tougher restrictions on data processing which means that more checks will exist for those who seek to act on another’s behalf hence the importance of a Lasting Power of Attorney.

If you do not have a Lasting Power of Attorney in place, no one has the legal authority to make decisions for you if you are unable to do so yourself.

Should a Lasting Power of Attorney be required and you not have one in place, this could result in a very costly application to the Court of Protection to appoint a Deputy to act on your behalf.

Contact us for further information

Should you wish to speak with one of our team at Morrish Solicitors who specialise in this area, please do not hesitate to contact us.

Pudsey Office: 

9 Lowtown  Pudsey  LS28 7BQ

033 3344 9606 (Local Rate)

Yeadon Office:      

61 High Street  Yeadon  Leeds  LS19 7SP

033 3344 9609 (Local Rate)

Uncategorized

Unmarried couples – rights of surviving partner

There was a recent case in the Supreme Court which has highlighted the vulnerability of the survivor when one partner dies and the couple were not married.

Siobhan McLaughlin successfully claimed Widowed Parents’ Allowance following her partner’s death. Current law states that this benefit is only available to bereaved partners who have children and have been married to or in a civil partnership with the deceased.  Siobhan was not married to her late partner so she was in difficulties. Nevertheless in her case she was successful in being awarded Widowed Parents’ Allowance. The benefit is designed to help the children after a death so one wonders why the rules say a marriage or civil partnership is necessary.

This case only highlights the problems of surviving partners in such cases.  These cases will be increasingly common.  In 1996 there were 1.5 million unmarried couples co-habiting, but in 2017 that had jumped to 3.3 million.

Marrying or creating a civil partnership triggers certain rights, but those rights are not available for other couples, for example:-

  • The surviving partner may not be able to inherit any part of their deceased partners’ pension – many pensions provide for “widow’s benefits”, but only marriage/civil partnership triggers the entitlement to such benefits.
  • Inheritance Tax – there is an exemption against Inheritance Tax (which is the tax on the value of an estate at the date of death) if the deceased was married to his or her partner at the date of death.  Otherwise the tax is 40% on the assets inherited (subject to a minimum threshold).
  • Inheritances – there are no automatic rights for a surviving unmarried partner to inherit anything from the estate of the deceased partner.  If there is a Will clearly this governs the arrangements, but if there is no Will the Intestacy Rules, which deal with inheritances in the absence of a Will, do not allow for unmarried partners to inherit anything.
  • It appears that this has led to a large increase in the numbers of “death bed marriages”.  Couples are realising right at the last minute that to protect inheritances and other such rights a marriage is necessary.

Whatever the merits or problems with the current system, it is clearly important to plan for the future.  Making a Will is one of the first steps to take.  Here at Morrish Solicitors we are able to prepare Wills for clients in our offices at Yeadon, Pudsey and Leeds City Centre.  We also, where necessary, make home visits to clients or visits to hospitals or care homes.

Please contact:-

Tom Morrish

Tel:- 033 3344 9609

Email:- tom.morrish@morrishsolicitors.com

 

Monika Volsing

Tel:  033 3344 9609

Email:- monika.volsing@morrishsolicitors.com

 

Christina Taylor

Tel:  033 3344 9606

Email:- christina.taylor@morrishsolicitors.com

 

Kiranjeet Chana

Tel:- 033 3344 9606

Email:-  kiranjeet.chana@morrishsolicitors.com

Fraudulent Will Writer, Lasting Power of Attorney, Probate, Wills

Why should I use a Solicitor?

The ageing population means that there is a large and increasing market for legal services for elderly people.  Services in which elderly people are often interested are:-

  • Wills
  • Powers of Attorney
  • Concerns about costs of residential/nursing care
  • Equity Release
  • Advice regarding dementia/mental incapacity

Individuals are free to obtain legal advice from wherever they choose.   The advice could be from a Solicitor, or it could be from another organisation such as a financial adviser or a will writer.

Why use a solicitor rather than anyone else? 

  • Solicitors have undergone lengthy training,  probably six years between leaving school and qualifying.
  • Solicitors are regulated by the Solicitors Regulation Authority, which provides strict controls on the way Solicitors practice to ensure that the public are protected.
  • If a Will or other document is stored at a Solicitors’ practice then the document will be kept safe, and if the Solicitor goes out of business the documents will pass on to a successor practice.  The Law Society will be able to advise where the documents are held.
  • Solicitors are insured.  If anything goes wrong the Solicitor’s insurance will cover the costs of putting it right.
  • Solicitors have to keep client’s money separate from their own money.
  • Some unregulated Will writing companies are “here today gone tomorrow” organisations. Be wary of letting them store valuable documents for you.

Fees – Solicitors are required to be up front about the fees that they will charge.

You should be wary of organisations which:-

  1. Ask for significant amounts of money up front without specifying what it is to be used for.
  2. Offer an initial Will for a very low price coupled with a home visit.  Clearly the organisation will have to sell other  products or services to you to keep in business.
  3. Some organisations ask for significant money on account of “probate fees”.  A bit like a pre-paid funeral.  Be very cautious of such requests.

When obtaining advice of this nature, always obtain advice from a Solicitor, preferably one who has been recommended to you.

Otherwise, take a look at the website www.sfe.legal.com which represents Solicitors for the Elderly. This is a group of Solicitors all of whom specialise in providing legal advice for the elderly.  Members of the Elderly Client department at Morrish Solicitors are members of Solicitors for the Elderly, and Tom Morrish is Regional Co-ordinator for the Yorkshire region.

Telephone Tom Morrish on 033 3344 9609 for further assistance or visit our website.

Inheritance tax, Lasting Power of Attorney, Uncategorized, Wills

Getting your house in order for the future – whatever that brings

When you die, you’re dead and you’ve got nothing to worry about (unless you believe in heaven and hell) – right? Either way, what about the people or organisations you want to benefit from your estate? Whether you believe in life after death or not, it is better to get organised now. This will be a weight off your mind because you know that after you die, the people who matter to you won’t miss out or find themselves in a complicated situation that you could have saved them from. It can also reassure your significant others if they know they will be doing what you would have wanted, and it can help avoid disagreements and claims against your estate after you’re gone.

And never mind dying, what if you become mentally incapable and can’t deal with your own affairs? Who will sort things out for you then?

So here are some top tips to get your affairs straight for starters:

  • Review and update your Will regularly to ensure changing family needs will be appropriately dealt with on your death.

 

  • Make a Lasting Power of Attorney for Property and Financial Affairs to ensure your assets can be managed without delay in the event of a loss of mental capacity (or if you are physically unable to manage) and encourage other family members to do the same.

 

  • Make a Lasting Power of Attorney for Health and Welfare so your attorneys can advise doctors on resuscitation and life sustaining treatment, and health and social care professionals on how you want to be cared for.

 

  • Make the most of available lifetime giving allowances to help your family and friends, and minimise inheritance tax on your death.

 

  • Check the title deeds of your home and other properties you own and deal with any irregularities in ownership.

 

  • Prepare a detailed list of personal belongings and put in writing who you want to receive them on your death to prevent arguments.

 

  • Keep a private note of any passwords and usernames required for managing your assets online with your Will and Lasting Power of Attorney for Property and Financial Affairs.

 

For more advice on any of these courses of action, the Morrish Elderly Client team are here to help.

Call Kiranjeet or Christina at our Pudsey office on 0333 3449606.

Call Monika or Tom at our Yeadon office on 0333 3449609.