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Appointing a Guardian to deal with a missing person’s estate

On 1st October 2014, the Presumption of Death Act 2013 came into force which allows the court to make a declaration that a person who is not known to be alive for at least 7 years, to be presumed dead.  This then allows for family members to deal with the estate in accordance with that person’s Will or the rules of Intestacy if they did not have a Will but what happens during that 7 year period?

What are your duties as a Trustee?

When you have been appointed as a Trustee, you will have certain duties to carry out and obligations to comply with and if you do not comply, you may be held personally liable for any breaches of those duties.  One of those duties was reviewed in the recent case of Henchley v Thompson [2017] EWHC 225 (ch), where Chief Master Marsh had to consider the circumstances in which a Trustee will be ordered to account to the beneficiaries for his dealing with the trust assets.

Providing for Fido

You may have recently seen on soap-drama Coronation Street that David Platt has unexpectedly been left a pet in a Will (David the dog), along with a cash legacy of £20,000. Leaving animals in Wills is becoming more common as in many UK households, pets are considered part of the family.

If you would like to leave a provision in your Will to make sure that your pet is provided for after your death, please read this blog as it aims to make you aware of factors you may wish to consider before taking this approach.

RIP Probate Tax?

Many will have breathed a sigh of relief following the announcement on the evening of Thursday 20th April, that the proposed increase in probate fees has been scrapped in the wake of the planned election on 8th June.

Currently the fees are fixed at two costs; £155 and £215 (dependent on whether a solicitor is applying for the Grant of Probate on your behalf). Under the proposed changes, the system would have become a banded structure based on the value of an estate, with up to £20,000 fees to pay out. These changes were due to take effect in May 2017.

The new inheritance tax rules: how will they affect you?

The new Residence Nil Rate Band for inheritance tax came into force last week. If people plan in advance and structure their Wills correctly the new rules could potentially save an individual £70,000 in inheritance tax, and married couples could save up to £140,000.

The new rules will not automatically apply to everyone and a lot of people who have made Wills in the past will need to amend them in order to benefit. The Private Client team at Myerson have implemented solutions to the difficulties that arise from the new rules, and we are able to advise you on how to qualify for the Residence Nil Rate Band threshold.

Probate Fees & Stealth Tax – The Ministry of Justice Response

The Ministry of Justice (MOJ) has now published a response regarding their initial proposal for reform of the probate fees. This is contained within the following paper – ‘Further Information regarding interim arrangements for the probate service ahead of the new fees implementation’

The guidance is set out in a Q&A format, attempting to deal with issues around how the new fee structure will work.

The MOJ has suggested previously that the new structure is a “fairer banded system”, despite many objections to this, because of the view that it is unnecessarily overcharging. The proposed new probate fees are spiked at a maximum cost of £20,000 for the largest of estates. Previously the fees had been fixed at two costs; £155 and £215 (dependent on whether a solicitor was applying for the Grant of Probate on your behalf). For further details regarding the exact costs of the new fees please see our previous blog on this issue.

New Probate Fees – “Stealth Tax”?

The Ministry of Justice has confirmed (subject to Parliamentary approval) that there is to be a substantial increase in probate fees which is due to take effect in May 2017. See the consultation paper here.

The fee increase is specifically in relation to the payment required to apply for a Grant of Probate which is currently set at two rates. The fee when instructing a solicitor to make the application on your behalf is set at £155 and the fee on a personal application is set at £215.

The Perils of Managing Another Person’s Finances

There has been a lot in the media recently about theft by attorneys and deputies. While a lot of these involve a clear intention to defraud a vulnerable person, there are cases where it is clear that the Attorney or Deputy did not fully understand their role. We are often approached by Attorneys/ Deputies who find themselves in trouble with the Court of Protection but who did not realise that they were doing anything wrong.   For example, they may have borrowed money from the Donor with the intention of repaying it, or the Donor may have told them that they wanted to gift a sum of money to them so they have taken it, but there is no record of this being the Donor’s wish.

The Rise in Fraud by an Attorney; the Importance of Choosing the Right Attorneys

Recent statistics show that there has been a rise in the number of attorneys and deputies being removed by the Court of Protection due to mismanagement of funds or theft. Attorneys are appointed under a Lasting Power of Attorney (or, previously by an Enduring Power of Attorney) which has to be made by an individual when they have mental capacity.

Deputies are appointed by the Court of Protection by application usually by a family member or a local authority. The person who makes the Lasting Power of Attorney is known as the “Donor”, and an individual subject to a deputyship order is referred to as the “Patient”.

Living with mum

As the population is living longer, more consideration needs to be given to living arrangements as one gets older.  As part of a couple, one may be in better health than the other and be able to cope with staying in their own home but what happens when you are living alone?

But you promised…

Over the years, there have been an increase in the number of cases of people making claims where they have been promised a property or an asset but the promise was never carried out or formalised.  When this happens, a potential remedy is to make a claim for Proprietary Estoppel.

Keep your (cross) options open on death

Setting up a business is exciting but it is important to review all eventualities and the inevitable, death!

On death, a shareholder’s shares are dealt with as part of their estate.  If there is a Will, it will be dealt with in accordance with those terms.  If there is no Will, the shares are dealt with in accordance with the intestacy rules.  For shares in a qualifying business, the shares may attract Business Property Relief (BPR) for inheritance tax purposes and this can be as much as 100% of the value.

Homemade Will in multi-million pound estate

In a recent unreported case of Wooldridge v Wooldridge, a claim was made by a widow against the estate of her late husband as the Will contained a clause leaving her a salary of £75,000 per year from a company part owned by her husband which failed as it was not enforceable.  The Will was homemade despite the value of the estate being worth millions!

Digital Assets

This week the Law Society has drawn attention to Dying Matters Awareness Week to encourage people to think about what happens on their death.  The most obvious issue is what happens to your assets and have you made a Will but have you also considered your digital assets?

Google overtake Apple in the world’s most valuable company: Digital Assets

We recently saw Google’s parent company, Alphabet, overtake Apple to become the world’s most valuable company worth around $548 billion!

In today’s world, it seems that most things are virtual and whilst this is fine when you are alive and aware of it, it’s a different matter when you die and those assets become difficult to trace if you do not give your family a helping a hand.  The internet revolutionalised the way we communicate, how we access information down to how we shop and bank since the mid 1990’s but when it comes down to organising digital assets, they are the most likely things to be forgotten.

What can an attorney pay themselves? – striking the right balance

A recent case highlights a common issue for children looking after their parents’ affairs under an Enduring or Lasting Power of Attorney.

The basic rule is clear – a power of attorney (“LPA”) can only be used to benefit the person who made it (the “Donor”). Attorneys cannot use the LPA to benefit themselves. If an Attorney has expenses, they can be reimbursed, but they can’t be paid for being an attorney unless the individual LPA provides that they can.

Registering power of attorney with the bank: The financial ombudsman service publish guidance

We have previously written at length about why individuals should make a Lasting Power of Attorney (“LPA”). However, once a person has created a Lasting Power of Attorney and registered it with the Office of Public Guardian problems can still arise. In particular, attorneys often have problems dealing with the Donor’s banks. There may be a number of reasons for this. Every bank has their own procedures and security processes when an LPA is in place. Attorneys may find that the requirements are different for each bank which can be confusing. We often find that the person the attorney speaks to at the front desk may not have any experience dealing with LPAs and may not be familiar with the procedures or requirements. In addition, banks are big organisations and often the LPA document has to go to a different department to be registered and it takes time for it to go through their system. This can cause delay which is a problem if the LPA is needed urgently.

Cheshire homeowners are advised to watch out for inheritance tax

A recent analysis of national statistics has revealed that more estates in parts of Cheshire are falling liable to inheritance tax (“IHT”) bills than anywhere else outside of the South of England and Edinburgh. Cheshire East, which includes Alderley Edge, Wilmslow and Knutsford, tops the list of IHT hotspots in the region. Cheshire West also features highly.

Ilott v Mitson again – speaking ill of the dead

The case of Ilott v Mitson continues to send shockwaves through the private client community. The original stage of this case was a claim by Heather Ilott against the estate of her late mother, Melita Jackson. Mrs Ilott won her claim and was awarded £50,000 from her mother’s estate, about 10% of its total value. Because she was on benefits, the award had the effect of stopping her benefits until she had used up the money. She therefore went back to court to request that the award be increased to such sum as would enable her to buy a property, this not having an effect on her benefits. She was refused at her first attempt but the Court of Appeal has just ruled that the award should be increased to £164,000 so that she can buy the housing association home she and her family live in.

Good News for Clients Owning Property Abroad

Good news for clients owning property abroad – what Brussels IV means to you.

Many of our clients have holiday homes in other parts of the European Union, in particular France or Spain. Whereas in England and Wales, it is possible to leave your assets where you wish (subject to a few exceptions), most European countries follow the Napoleonic Code, meaning that the assets must be shared between children and spouses in a set way (the “forced heirship rules”) and there is very little freedom of choice. This has caused problems for clients wanting to leave their whole estate to their spouse, for instance, or an unmarried partner, or perhaps on a second marriage where the spouse should have a life interest only. So the question of what law applies to a person’s estate can have significant implications.

Lasting Powers of Attorney – now quicker and easier

Myerson Solicitors LLP are welcoming the introduction of new Lasting Power of Attorney (“LPA”) forms and procedures on 1st July.

Up to now, for each LPA, we have had to complete 26 pages of forms, comprising the LPA itself, notice to an independent third party, and the application for registration. The latter two documents both involve repeating information given in the LPA itself. Because the smallest mistake can result in the LPA being invalidated, each of the 26 pages has to be checked over and over.

Solicitor’s insurer liable for costs of negligently drafted mirror wills

In the recent Supreme Court case of Marley v Rawlings and another, a solicitor’s insurer has been ordered to pay the costs of both parties in litigation after mirror wills were incorrectly executed as a result of a solicitor’s negligence.  The insurer was ordered to pay both parties costs of the action to rectify the wills on the basis that the insurer had funded the litigation by urging one of the parties to commence litigation in order to mitigate the insured solicitor’s position.

The Risk of Non-Disclosure to HMRC: Woman jailed for attempting to dodge tax bill

Anyone who has dealt with a taxable estate will be familiar with the amount of paperwork that the executors are required to submit to HMRC, in the form of the IHT400 account. Our clients often find the arduous task of gathering detailed information, paying out for valuations and repeatedly checking the many schedules to the tax form a very frustrating process. This is perhaps made more frustrating by the fact that as part of the process the family have to pay an amount of inheritance tax up front and then plan how any remaining tax will be paid, with interest. Many people wonder whether it is really necessary to provide such detailed disclosure to HMRC and some question how HMRC would ever know if they decided not to tell them about every single asset.

A Level Playing Field: New Capital Gains Tax rules for non-UK residents

Capital gains tax (“CGT”) is one of the main taxes on capital in the UK. It applies where an individual sells an asset, (other than their private residence), and makes a profit. CGT is payable on the “gain”, which is essentially the difference between the net sale proceeds and the original cost of acquisition (known as the base cost). Currently, these rules only apply to UK residents. If you are not tax-resident in the UK then you are not subject to CGT. With effect from 5th April 2015 this is changing where the asset is residential property in the UK.

“Cowshed Cinderella” gets her reward via Proprietary Estoppel

Last week the papers broke with the news that 45 year old Eirian Davies had won her claim against her parents for a share of the family farm. Miss Davies, who is one of three daughters of Tegwyn and Mary Davies, worked on the farm from a young age. The media have dubbed her as the “Cowshed Cinderella” as it is believed that she would stay at home to carry out chores on the farm while her sisters went out to social events. One paper describes how her sisters once paraded through the poultry shed in ball gowns while she prepared the Christmas turkeys. Her parents promised that she would inherit the whole of the farm in due course. In light of this, Miss Davies received little or no payment for her hard work on the farm. Her sisters never had any interest in the farm and left the family home in pursuit of alternative careers in 1989.

Equity will not assist the man with unclean hands…or will she?

Usually, trusts of land must be in writing in order to be enforceable. At the Court’s discretion, the principles of equity, or fairness, can be used to mitigate strict legal rules. For instance, equity will impose an implied trust in order to prevent legal owners from relying on their strict legal rights where it would be unfair to do so. However, it is an established principle that equity cannot be used to assist those who have acted unlawfully. The recent case of O’Kelly v Davies reminds us that equity will, on occasion, look beyond an illegal purpose in order to impose fairness.

Can I exclude my daughter from my Will ? – Ilott V Mitson revisited

Latest blog from our Wills, Trusts & Probate  department.

Regular readers will be aware of the case of Ilott V Mitson ([2011] EWCA Civ 346). This was the case that established that an adult child can bring a claim against an estate under the Inheritance (Provision for Family and Dependants) Act 1975 (“IPFDA”). In a recent, similar, case the court has, by contrast, upheld the mother’s right to leave her estate as she thought fit, excluding one of her children.

But he told me it was my home too! : When a partner breaks his promise

Latest blog from our Wills, Trusts & Probate  department.

In modern times lots of people choose to live together as a couple without getting married. When a relationship breaks down there are often arguments about the ownership of property, whether a couple are married or not. However, the matrimonial laws which allow courts to make such orders as they think fit to divide property between spouses do not apply to unmarried couples. They are stuck with general trust law and it can be hard to prove one party has an interest in a property if they are not on the legal title. Another problem is if the property is in joint names but one partner claims a larger interest than the other.

When is an interest not an interest, or who can challenge a Will?

Latest blog from our Wills, Trusts & Probate  department.

The recent case of Randall v Randall [2014 EWHC 3134] has shone a bright light on the question of who has the right to challenge a Will. Essentially, the person bringing the action must have an interest in the estate. So the question then is, what is an interest in an estate for these purposes?

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