Where there’s a will, there’s a way …

Sarah-Varani-150x150… of disinheriting your estranged spouse.

Although once the decree absolute is issued, any will you may have in place is read as if any reference to a previous spouse is removed entirely, during separation and the often lengthy process of divorce you are at risk of them inheriting under your will if you do not change it in the interim. (Or indeed if you do not have a will at all – under the intestacy rules).

In all honesty whilst in these circumstances a Codicil revoking a gift to a named beneficiary could be used to “cut out” the estranged husband/wife from the estate (provided you already have a will in place already) the best advice really would be to draw up a whole new will which does not make any provision for the estranged spouse. This should then sit alongside a letter of wishes setting out the reasoning behind the lack of any bequests to try and limit any potential claims against the estate.

Under inheritance legislation, it is possible for certain individuals to make a claim for provision out of a deceased’s estate where reasonable financial provision has not been made for them in the will. This includes the spouse or civil partner of the deceased. A claim for provision cannot succeed though unless the court is satisfied that the will does not make reasonable financial provision for the person making the claim. What financial provision is reasonable depends upon who is making the claim. A spouse or civil partner may seek financial provision that is reasonable in all the circumstances, whether or not it is needed for his or her maintenance. The court does not have to decide whether the deceased acted reasonably or unreasonably.
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“We live we die and the wheels on the bus go round and round”

Sarah-Varani-150x150“Empires collapse, Civilizations disappear, Health deteriorates, bodies turn to ash, but life will always go on”

A bucket list of 50 things to do before you die might include sky diving and swimming with dolphins but bearing in mind the above musings one of the items on the list should probably be making a Will. A Will is much more than a means of distributing your property when you’re gone especially if you have children. Even if you already have a Will you should make sure it is kept up to date, for example if you remarry then an existing Will is revoked. Continue reading ““We live we die and the wheels on the bus go round and round””

“In this world nothing can be said to be certain, except death and taxes.”

Sarah-Varani-150x150However in both instances you can do some forward planning by drawing up a Will and consulting an accountant. In a digital world though, a Will may not be enough to safeguard your treasured digital possessions. There are numerous legal, cultural, and technical issues that could prevent access to these records, and if you don’t take steps to make them available to your nearest and dearest, your digital legacy could be lost forever.

Currently, your personal representatives (executors appointed under your Will or administrators appointed by the court if you were to die intestate) have the legal authority to deal with your affairs. They are obliged amongst other things to collect in and protect any assets including any digital assets you may have, settling any debts and expenses and distributing in accordance with your Will or under the intestacy rules. Digital assets have value, sometimes sentimental, and sometimes an intrinsic monetary one, just like a boxful of jewellery.
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Making a Will: when and why should you do it

Most people know what a Will is. They also know that at some point in their lives they will need to make one, but many put it off in the belief that it is something they can deal with later on in life. However, there are several points during a lifetime when a Will should seriously be considered. Below we provide a list of these life-stages and explain why getting a Will is so important.

Getting married or entering a civil partnership:

Bride and GroomPerhaps the last thing on most newly-weds’ minds is getting a Will, but what many people are unaware of is the fact that when you get married, any Will you had before you got married will usually become invalid.  This means if you died after your marriage or civil partnership before making a new Will, you would be deemed to have died ‘intestate’. Dying intestate means the State decides how your estate (belongings, property and money) is distributed, regardless of your or your spouse’s wishes.  Getting a ‘Will for a married person/civil partner’ or a ‘mirror Will’ is easy to do and lets you and your spouse specify exactly how you want your assets to be distributed amongst your family.
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New Year? New You? … New Will?

Christmas has come and gone, the presents have been opened and it is the time of year to savour some special moments with loved ones. The Fireworks have heralded in the New Year over Big Ben and your New Year resolutions have been made but besides vowing to change your diet or habits, had you thought of the need to ensure that your loved ones are protected on your death?

Life can be exciting, but also unexpected. And whilst it is quite natural to avoid thinking about ones own mortality, particularly when looking into a new year, having a Will can make things easier for family and friends left behind. It can guide them on how to mange your affairs and potentially reduce the possibility of family strife.
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It takes two: the benefits of mutual or mirror Wills

One of the major challenges of any relationship making joint decisions, but when it comes to making your Wills as husband and wife or civil partners, it can be incredibly beneficial.

If you can co-ordinate on areas such as what happens to your assets (money, property and so on) and beneficiaries (children or other recipients), you will make the most of your shared assets and make the process much easier for those handling your estate after your death.

What are mutual or mirror Wills?
When you make mutual or mirror Wills, you create two separate documents – one for each of you – but they ‘mirror’ one another, so all the decisions in them are the same, from who you appoint as executors to those who will benefit from your estate and appointed legal guardians for your children.

You’ll need to add at least one extra executor and beneficiary to each Will to safeguard your shared estate in the event that you both die together. You can choose the same substitutes or different ones.
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Guard them with your life: make a Will to protect your child

Being a parent often equates to a series of decisions – choosing a school, a GP, vetting boyfriends and girlfriends, weighing in on everything from crayon selection and wardrobe choices to university applications and careers – but one of the most important and lasting decisions you can make is using your Will to protect your children after you’ve gone.

It may be difficult to think about, but facing this reality and preparing for it now will help your offspring in the long run. Whether you’re making your Will as a married parent, unmarried or in a civil partnership, this is crucial step to take – and will give you peace of mind.

Appoint a guardian
If you have younger children (under 18), one of your key decisions is who should care for them if something happens to you. Relatives are often the first choice for a legal guardian, but close friends may also be sensible.
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Inheritance Tax: what is it and do I need to pay it?

According to a recent survey by Baring Asset Management, 17% of Britons are relying on inheritance to help fund their retirement, with just 44% believing that pensions alone are sufficient to get by.

That figure rises for people in the A/B social segment (upper and middle classes), with nearly one in four saying inherited assets form a key part of their retirement planning, up from 20% in 2011.

However, if you’re relying on inherited funds or assets, or if you’re planning to help out relatives, dependents or friends by leaving them something in your Will, there is one barrier to overcome: Inheritance Tax.

What is Inheritance Tax?
It’s a 40% tax on the value of your estate – property, assets, money etc., minus liabilities – when you die. Unless you plan ahead, it can severely deplete the amount you leave to people.

However, if you’re aware of the rules and exemptions of Inheritance Tax when you’re making your Will and managing your assets, you can limit the amount you pay out; in fact, if you’re very canny, you can leave almost everything to dependents without them having to share with the taxman.

How can I avoid paying the full amount?
There are ways to leave assets to people without paying Inheritance Tax or by paying a reduced sum. These include:
•    Gifts to partners If you ‘gift’ an asset to your spouse or registered civil partner, it’s tax free, unless they live outside the UK (if that’s the case, you’ll need to seek professional advice).
•    Donations Anything you gift to a qualifying charity or UK national body (like a political party) is tax free. To check whether an organisation qualifies for this, call the HMRC helpline on 0845 30 20 900.
•    Allowance You can give away assets up to a certain amount without paying tax – this is known as your ‘tax-free allowance’. The current allowed value, called the ‘nil band rate’, is £325,000; it’s reviewed each year, so check the HMRC website www.hmrc.gov.uk for the latest figure. The allowance is calculated AFTER you’ve given gifts and donations and after certain things have been deducted, such as burial expenses and mortgages. Note that if you ‘gift’ something during the seven years before you die that reduces the value of your estate (e.g. if you transfer money to someone), it can affect the amount of your tax-free allowance after your death.

Are there any exemptions?
There are certain ‘allowable exemptions’ to be aware of when you’re gifting assets – this gives you other ways to leave things to people without paying Inheritance Tax on them. They include:
•    Small gifts Anything worth £250 or less in any one tax year given on a ‘festive’ occasion, like a birthday or Christmas.
•    Annual exemption Anything you give worth £3,000 or less in any one tax year – either one gift or several small ones not covered by the ‘small gifts’ exemption. If you give gifts worth less than £3,000, you can carry over the surplus to the next year (but no further).
•    Made out of income Gifts you give that are part of your normal expenditure – i.e. gifts you would usually give, paid for by your income and leaving you more than enough in your bank account to maintain your usual standard of living. Again, these can’t exceed £3,000.
•    Marriage/civil partnership Gifts you give to one or both of the happy couple on or shortly before their big day are exempt up to a certain point; that varies depending on your relationship with them, so check the HMRC website www.hmrc.gov.uk or talk to an expert.

Where there’s a Will, there’s a way
The best way to navigate the tricky Inheritance Tax waters is through an effective Will – visit our ‘Wills and probate centre’ to find out more.

This will also give you a chance to think about how you’re organising your estate, for example which assets you want to be covered by certain tax exemptions, if you need to co-ordinate with your partner on bequests and if you want to place some of your assets into a trust.

The sooner you start this process, the better, and you should update your Will regularly, particularly if you have any big changes in your life, such as buying or selling a property.

If you have any further questions, contact our team.

Make sure your Will is above suspicion

Courtside: The latest legal news from MyLawyer

In a recent High Court case, two Wills an individual prepared on behalf of his sisters were challenged on the grounds of ‘want of knowledge and approval’, meaning the court had doubts that the sisters definitely knew about and fully approved the contents of the Wills.

A court can make this challenge if it deems any of the circumstances surrounding you making your Will suspicious in any way – for example, if there’s evidence that you didn’t understand some of the contents or you weren’t in a fit state to make the Will.

To ensure your Will is valid and your wishes are carried out, avoid any of the following suspicious behaviour:

•    Unprofessional The Will looks homemade and there’s no evidence of you seeking professional advice.
•    Language Either the Will contains errors, such as spelling mistakes, that make the court question its validity, or it contains language you most likely didn’t understand and there’s no evidence you approved those elements.
•    Untrue The Will contains factually inaccurate statements that should have been corrected, or there are decisions, without explanation, that seem highly out of character for you.
•    Big changes It has major changes in it, for example deciding to cut your partner out of your Will, again without rational explanation.
•    Strangers The major beneficiaries – people you’re leaving money or other big assets to – are strangers, and you haven’t clarified that choice with anyone.
•    Witnesses Your witnesses aren’t sufficiently independent – for example, you’ve left money to them or they benefit in some way from your decisions.
•    Beneficiary There’s evidence that a person(s) who gains from your Will has acted dishonestly or against your wishes in some way.
•    Behaviour At the time you made your Will, your behaviour was particularly unusual – such as high levels of stress or irrationality – again without any valid explanation.
•    Capacity There’s evidence that you weren’t at the necessary mental capacity when you made the Will, for example through illness.

If a court has reason to doubt your Will, your wishes could be challenged and even overturned in what can become a very lengthy, expensive and difficult process for your beneficiaries.

Get peace of mind by visiting our ‘Wills and probate centre’ and beginning or updating your Will now, tailored to your individual circumstances. Our solicitors can guide you through the process and ensure your Will is incontestable.

If you have any further queries, do get in touch.

Top 10 tips on making a Will

I knew I’d have to make a Will eventually, but I always put it off because I thought it would be so expensive and lengthy that deciding who got my money after I died would become irrelevant! I was also scared of legal jargon, strange Government policies and a solicitor’s Leveson Inquiry levels of interrogation about my ‘creative’ filing system and Murdoch-esque selective memory.

The bad news: it is up there with moving house, taking exams and filling out tax returns in terms of initial stress. The good news: if you do your homework (preferably without Twitter procrastination), it’s actually achievable, even for an English lit graduate with a hazier grasp of money than Greece’s finance ministers.

My top 10 tips:

1.    Keep calm and carry on. Yes, it involves strange thoughts about death and legacy and whether you should set up a trust fund for your dog (you just know Pudsey has one), but don’t panic. Remember, if you don’t make a Will, the court decides who gets what, and someone you love will miss out – or have to pay big taxes.
2.    Lawyer up. You can’t bluff your way through this by reading Wikipedia, but you also don’t need to shell out hundreds of pounds. Register to access the MyLawyer Law Guide for a wealth of jargon-free legal information.
3.    Location, location, location. If you own property, this is a good place to start, as it’s probably one of your major ‘assets’ (valuable things you leave behind). Find out what your house or flat is worth before you begin.
4.    Money, money, money. Similarly, gather up all the information on anything in the plus column (bank accounts, pensions, life assurance policies) and minus (debts, mortgage, liabilities. My delightful stack of financial documents is now a Turner Prize-baiting art installation.
5.    Become Alan Sugar. Choosing executors – the people who handle everything when you’re gone – is key, so get tough! Only tell the most reliable, fair people and best companies “You’re hired”.
6.    Take stock. Sort through all your possessions (good time for spring cleaning in my case) and decide whether they’re part of your main estate or going to different people. You can…
7.    Enjoy the gift of giving. Credit crunch shopping – you get to give presents you’ve already paid for! Choose the perfect memento for loved ones (I often resort to Amazon and iTunes vouchers, so this took a lot of thought).
8.    Rival Bono. You can pick charities to honour with your generosity – and annoy friends with your newfound levels of saintly satisfaction.
9.    Children in need. As with executors, get tough and pick the very best guardians for your kids (and/or Britain’s Got Talent winning pets), and substitutes in case the first choice doesn’t work out. Unless you want this to be a hilarious surprise, don’t forget to clear it with them!
10.    Get morbid. I’ve wept over Four Weddings and a Funeral but hadn’t given much thought to my own service. However, this turned out to be a nice Desert Island Discs exercise – picking music and readings that meant something to me (although a live appearance from Gareth Malone and the Military Wives Choir is probably a long shot).

The best news is, once you’ve made a Will, that’s it! You’ll only have to make small changes when you have changes in your life – marriage, children, buying a new home, wining the lottery… Plus, the feeling when you cross the finish line rivals that of an Olympic athlete winning Gold at 2012 (I’m guessing). At the very least, it’s a huge relief knowing it’s taken care of and you can go on living your life.

Check out the MyLawyer Wills & Probate Centre to find out more.