Frequently Asked Questions
What is a Will?
It is a document, recognised in law in which you say where and to whom your worldly goods (your assets) are to be given when you have died.
It must be in writing, signed by you and two witnesses who are preferably not named in your Will nor married to any body so named.
Why make a Will?
- Who in law you place your trust to pay any debts or liabilities arising after your death i.e., the final gas bill
- What your funeral arrangements are to be
- Who you want to receive your assets and in what proportion. Do not forget your friends, neighbours or any good cause
- Who you do not want to receive your assets on your demise
- Who you trust to sort out any problems which can arise between family members
Do I need to change my Will if I....
Divorce or dissolve my Civil Partnership?
No. Any reference to your former Spouse/Civil Partner or gift to them is in effect deleted.
Marry or enter into a Civil Partnership?
Yes. Any previous Will unless it specifically states that it is made in contemplation of your union, is cancelled.
Does my Partner inherit my estate?
If you are not married nor in a Civil Partnership and you have not made a Will, then the answer is NO.
Joint property may automatically pass to a surviving co-owner.
Do I need to change my Will if someone named in it moves or alters their name?
No. If you would like to update us of any changes by letter, please do so.
If I die without a Will, who is entitled to my assets?
If you own an asset which is in your name and that of another - a joint asset - then generally (but not always), the asset will automatically pass to the surviving joint owner. For other assets the following rules apply.
The Intestacy Rules changed on 1st February 2009 so that:
If you are married or in a civil partnership with children
Your Spouse/Civil Partner will receive up to £250,000 and all personal possessions not used in connection with a business.
The remainder (if any) is divided as to:
- ½ between the children
- ½ to be invested to provide your Spouse/Civil Partner with an income for the remainder of their days. On their death what is left passes to the children.
If you are married or in a civil partnership without children
Then depending on what other relatives are living at the time of your death will depend on who receives what.
- If you leave a parent(s), or brother or sister with whom you share the same parents, or their children ( a nephew or niece) then
- Your Spouse/Civil Partner will receive up to £400,000 and all personal possessions not used in connection with a business
- The remainder (if any) is divided as to:
- ½ to your Spouse/Civil Partner absolutely
- ½ to your parent(s). If there is no parent living then between your brother(s) and sister(s) equally and if any one of them has died before you leaving children living at the time you die, then these children share their deceased's parents entitlement between them
If you are not married and have no children
Your assets will pass to the following people in the following order:
- All to a surviving parent(s)
- If none, then to brother(s)/sister(s) with whom you share the same parents and if any one of them has died leaving children then to those children in equal shares (the whole blood)
- If none, then to brother(s)/sister(s) with whom you do not share the same parents and if any one of them has died leaving children then to those children in equal shares (the half blood)
- If none, to a grandparent(s)
- If none, to uncles and aunts of the whole blood or to their children if any one of them has died before you
- If none, then to uncles and aunts of the half blood or to their children if any one of them has died before you
- If none, to the Crown (or to the Duchy of Lancaster or the Duke of Cornwall)
If you are married or in a civil partnership without children and without parent, brother, sister, nephew or niece who survive you
Then your Spouse/Civil Partner will receive everything.
If you are not married or in a civil partnership but have a child
Your assets pass to your child at 18 unless that child marries before this age. If you have more than one child they will share your estate equally upon reaching 18.
If a child has died before you, leaving a child living at your death, then that child (your grandchild) will inherit their parent's entitlement.
How do I get started?
You can complete our Will Questionnaire which is designed to make you think and for alarm bells to start ringing with us depending on the information you supply.
If you prefer to make an appointment to come into the office or to have a chat on the telephone, then we can accommodate you.
You will need to consider:
- Who you will choose to control the administration of your assets - your Executor can also be a beneficiary
- Any funeral arrangements
- Whether or not you need to appoint Guardians for children under 18
- If any heirlooms are to pass to future generations. They need not be of any significant worth
- If you intend to leave specific sums of money to any one or more individual
- Who is to get what is left and in what proportion - the residue
- Are you going to leave any person out of your Will who may be expect to be included
- Do you need to consider Inheritance Tax planning
Do I need a Solicitor to make a Will?
No. If you do not you run the risk of:
- Not leaving a valid will. In which case the Intestacy Rules will apply.
- Inadvertently creating a "trust"
- Unintentionally using a word(s) which has a legal meaning resulting in you giving or not giving away an asset you intended
- Leaving a poorly worded will which causes confusion which will result in the Court having to decide what you did intend
- Not actually giving all of your assets away resulting in a partial intestacy to which the Intestacy Rules will apply
- Not providing for a dependant of yours who is then left with no choice but to make a claim against your estate.
Do I have to come into the office?
No. It is our policy to see you but we appreciate that it is not always easy to get to our office at a convenient time.
We can arrange to visit you at home on most occasions.
Can you help? I need to challenge someone's Will who has died.
Yes. There are basically four grounds upon which a Will may be challenged.
The person who made the Will:
- did not have the mental capacity to do so
- was unduly influenced by someone, not necessary a beneficiary named in the will
- did not appreciate or understand the nature and content of the will they actually signed
- has not properly signed it
Lasting Powers of Attorney
What is an Attorney?
An Attorney is a name for someone who acts on behalf of another person. You can choose your Attorney who may be a family member, friend or professional.
How many Attorneys can I have?
You can in principal have as many as you like. If you appoint more than one you have to say whether or not they are to act:
Jointly - meaning that:
- any decisions to be made MUST be taken by all Attorneys together
- who have to agree on the decision made
Jointly and Severally - meaning that:
- each Attorney can make a decision independently of the other
- the LPA will not cease if an Attorney can no longer act.
What is a Lasting Power of Attorney (LPA)?
There are two types:
- a Financial and Property LPA - enables your Attorney to deal with financial matters.
- a Welfare LPA - enables your Attorney to make decisions about your physical or mental condition
What if an Attorney dies?
You can choose a substitute Attorney.
What can my Attorney do for me?
Anything you want them to. So think carefully. You can however restrict the range of powers you give to your Attorney and you can say what assets your Attorney may or may not act upon and to what extent.
For instance you can:
- give to your Attorney a general authority over your finances which means your Attorney can do any act which you can do for yourself OR
- you can limit what your Attorney may or may not do i.e., permit your Attorney to pay in or withdraw money from your bank account; but not to permit your Attorney to make a decision on investing your money
- specify which property or asset you wish your Attorney to have either a general or restricted authority over
- attach conditions to the powers you wish to grant your Attorney
How long do the powers last?
An LPA will continue even if you no longer have the mental capacity to know what is happening. On your death it ceases. A General Power of Attorney on the other hand immediately ceases upon you losing your mental capacity.
Do I lose control?
Once you have appointed your Attorney, you do not lose control over your Finances. You can continue to simultaneously administer them for as long as you are able.
When can my Attorneys use the LPA?
Only when the LPA has been sent to Court for registration.
What if I fall out with my Attorney?
You can cancel the LPA in writing at any time provided you have the mental capacity.
In any event, an LPA ceases if any Attorney:
- voluntarily retires (disclaims)
- is declared bankrupt
- becomes incapacitated
- OR if your attorney is your Spouse/Civil Partner you divorce or seek an annulment/dissolve your union from your Attorney
Are there other types of Power of Attorney?
Yes. The common ones being:
A General Power of Attorney
This document permits your Attorney to have control over all of your financial affairs, without reference to you
An Enduring Power of Attorney
This type of Power can no longer be created. On the 1st October 2007 it was replaced by Lasting Powers of Attorney. Its purpose is broadly the same as an LPA i.e., it endures beyond your mental incapacity.
If you made an Enduring Power of Attorney before this date, it remains valid.
When is the right time to make an LPA?
Any time.The most common reasons for needing an Attorney are because you:
- have become unwell or less mobile
- are forgetful
- are becoming increasing anxious when it comes to sorting out paperwork, paying bills etc
- for whatever reason, you do not have confidence or cannot rely on your family to do the best for you when it comes to controlling your affairs
Are there any pitfalls?
Possibly. You must trust and have confidence in your Attorney and indeed his/her spouse.
If you believe your Attorney may be driven to use your money for their own purpose then you must reconsider who to appoint - even if it is your son or daughter.
- You get to choose who you want to look after your affairs when you are most vulnerable
- Leaving the appointment of an Attorney too late will result in your family having to apply to Court for a Deputy Order. You do not choose who is to control your affairs.
- The difference in cost and time in appointing an Attorney as compared to the appointment of a Deputy does not compare. The cost of the LPA is a one-off. The Office of the Public Guardian will generally charge a percentage of your assets each year in costs.
When someone dies
What is a Grant of Probate?
It is a certificate issued by the Family Division of the High Court on the application of the individual(s) named in the Will as "Executors" to the effect that the will is valid and that the Executors are authorised to administer the deceased's estate.
What is a Grant of Letters of Administration?
The Court will issue this certificate when there is no Will. The person applying for it is entitled to do so because they are a beneficiary by virtue of the Intestacy Rules and thus are entitled to administer the deceased's estate. The beneficiary is called the "Personal Representative"
The person entitled to apply in priority is: Spouse, Daughter/Son, Parent, Sibling
What is a Grant of Representation?
This is a collective term for a Grant of Probate or Grant of Letters of Administration.
When do I need a Grant of Representation?
If the deceased owns land in his/her sole name - and possibly when land is owned in joint names, a Grant of Representation is needed.
If there are other assets which have a value such as cash, shares, bonds, insurance policies, pension pots, works of art (the deceased's Estate") etc a Grant of Representation is needed if their individual values are over £5,000.
Some institutions will release money if the value is under £15,000.
Joint assets usually pass automatically to the surviving co-joint owner.
If there is no Will, who receives what?
Please see the "Frequently Asked Questions" section on Wills (above).
What is an Executor/Personal Representative?
The Executor is chosen by you when you make a Will and you can have more than one.
A Personal Representative is chosen by law and is usually your next of kin.
An Executor takes their authority from the Will whereas a Personal Representative takes theirs from the Grant of Letters of Administration.
Your Personal Representative may also be a beneficiary. These two roles cannot cross in that your Personal Representative has to act in the best interests of the Estate and its' beneficiaries as a whole and not in their own best interest. This can be difficult.
Their Roles are basically the same in that they promise to:
- Secure and look after your assets until they are distributed
- Pay all of your debts and administration expenses
- Ensure that the beneficiaries who are either named in your will or who are entitled under the Law of Intestacy receive that to which they are entitled
- Administer the estate as quickly and as diligently as possible - this can mean that if they do not have the requisite knowledge of the law then they are obliged to seek advice
What if a Beneficiary cannot be found?
A beneficiary can come forward any time in the future to claim what is owed to them. There is no time limit.
Notices in newspapers ought to be placed to see if anyone will come forward with information on the whereabouts of a beneficiary who is missing.
Failing this a tracing agent - genealogist can be instructed to find the beneficiary which is generally cost effective.
If the beneficiary proves illusive then the Personal Representative can:
- Insure against the beneficiary coming forward later in the day OR
- Apply to Court for permission to distribute the estate
- Pay the missing beneficiaries share into court
Do I need to worry about Inheritance Tax?
It depends on the size of the Estate.
Inheritance Tax is paid on the net Estate, i.e., once all debts are paid. If the net Estate exceeds £325,000 (the Nil Rate Band) then 40% Tax is charged on the amount over and above this figure.
However, the deceased's Personal Representative will need to check whether or not the deceased had:
- been married or in a civil partnership
- and if so inherited their spouse/civil partner's estate in whole or part
If the answer to the above is YES, then the Personal Representative can also use the first spouse/civil partner's unused £325,000.
So if on the first of you to die, the survivor inherits everything, the gift to the survivor is exempt from Inheritance Tax. That deceased spouse will not have used any part of their Nil Rate Sum allowance. That unused Nil Rate Band can now be transferred to their surviving Spouse and be used in working out the Inheritance Tax liability on the estate of the surviving Spouse when he or she dies.
The result is that on the last of you to die, it may be possible to claim two Nil Rate Bands i.e., £650,000 within the estate of the second death. Inheritance Tax is charged on any figure over the £650,000 at a flat rate of 40%. Any lifetime gifts made within 7 years of death may reduce the amount of Nil Rate Band available.
Protecting your home against care fees
Can I transfer my home to my children?
Will the transfer avoid me having to sell my home to pay care fees?
What are the consequences of the transfer?
If you transfer your home into a child's name and that child then divorces, their share of your home may form part of their divorce settlement. This may result in the sale of your home.
Local Authority Claw Back.
If a home is transferred from one name into another, with the sole intent of avoiding the payment of care fees the Council will deem the transfer to be a "deliberate deprivation" of an asset. Prior to you being awarded any care assistance, an assessment form is completed. A question the Council ask is whether or not any property has been transferred. If the Local Authority believe a transfer has occurred it can place a charge (a mortgage) against the property so that care fees are repaid when the property is sold, or request your child to pay the care fees themselves.
You ought to consider your own welfare and your likely position when you reach an age whereby you need care because of your health deteriorating and whether or not that care is provided at home or in a home. You may be keen to prevent the capital value of your home from being spent on care fees but, do you really want to be left at the mercy of the local authority, when the cash from the sale of the property may provide you with a great deal of comfort?
There is a possibility that a child may die before you and you need to consider what will happen to their share in the property should this unhappy event occur.
It may be possible for a child to use their interest in your home as security for a loan. If that child then defaults on any repayments, the lender may have no alternative but to recover the loan money by applying to Court for an order to sell your home.
Should a child ever get into financial difficulty and be made bankrupt; the trustee in bankruptcy will not hesitate in calling for your home to be sold to recover that child's interest in it, to pay off the creditors.
A child may guarantee a loan for a 3rd party which may result in that child being pursued to repay a loan which the 3rd party arranged and who has defaulted on the repayments.
If you become bankrupt within 5 years of the day you transferred your home to a child, the result may be that the Trustee in Bankruptcy will apply to Court for an Order to set aside the gift and to sell your home.
There may of course be other eventualities which are unforeseeable such as a child losing their mental abilities which will have repercussions as to how their estates are to be administered.
Are there any tax implications?
Yes. There are complex tax consequences flowing from the transfer of your home for Inheritance Tax, Capital Gains Tax and possibly Income Tax purposes. The consequences may not only affect you but also your child's position. You do need advice on this area of law before proceeding which will depend upon the nature and size of your estate when the transfer is made.
Is there any alternative?
You may consider transferring - giving - the whole or part of your home into a trust. A trust is like a bank account into which money and property can be placed. Trustees are akin to bank managers in that they manager the trust fund (bank account). You can be a trustee.
What can and cannot be done with the trust assets is set down in law, and by the document which creates the trust. There has to be beneficiaries of the trust fund of which you can be one, along with your children/grandchildren etc. You will be allowed to continue to live in your home.
It is argued that if you place your home into a trust, which allows you to carry on living in it, the Local Authority may find it more difficult to argue that you have deliberately deprived yourself of your property.
Equity Release Plans
Once the property is transferred you will not have your home to provide you with future income nor capital should you need it. You may be aware that there are products on the market for the older generation to allow that generation to raise money by borrowing against their main asset - their home. In the late 1980's some of these plans had very bad press because it ended up whereby the amount owed to the company exceeded the value of the property itself.
These plans are more sophisticated and legislated over than they have ever been but they are not something which you ought to enter into without in depth consultation.
By raising money in this manner, it will be available to help pay for care whilst keeping you at home.
Long Term Care Bonds
People worry about that "rainy day" and whether or not they have enough money for the future. Consequently, their home is sold and the money used to pay care fees. Care fees range from around £2000 per month upwards.
It is possible to pay a lump sum to an insurance company who then guarantee the payment of care fees for the remainder of your days. How much you will need to pay will depend on your age, health and the cost of the care you need.
By example if you had £200,000 and paid a lump sum to an insurance company of £80,000 and you are 80 when you do this, the £120.000 you do not need for your care is available to you to pass down the generations if you wish without it being needed for that rainy day.
Moving to a Care Home
With Financial Help
If you have less than the upper assets limit you will receive some financial help from the local authority but will be expected to contribute to care home fees.
Assets below a lower limit are ignored. You will pay £1 a week for each £250 of assets above this. You must pay your occupational and state pensions, any benefits (pensioners credit) to Local authority. They will pay to resident a personal weekly allowance for toiletries.
Top Up Fees
The local authority generally pay up to an agreed limit, which may restrict the choice of home. If home costs are more expensive a third party must pay "top-up fees" to make good the shortfall.
If you have more than the upper assets limit (£22,250) you are not eligible for help. Contract direct with a care provider. It may be more expensive than what the local authority pays.
Twelve Week Disregard
If your house is the main asset and savings are less than upper assets limit you may not have to pay immediately. If assessed as needing care and income doesn't cover fees, the local authority must disregard the value of your home for 12 weeks. You must pay to the local authority pensions and benefits received.
After 12 weeks local authorities run "deferred payment schemes". The local authority pay the standard rate. Residents pay pensions and benefits and any balance outstanding is paid when the house is sold. Such loan is interest free.
Continuing NHS Healthcare
If you have critical, unstable and unpredictable health need, you may qualify for continuing care in a nursing home paid for by the NHS. Patients admitted to hospital under Section 3 of Mental Health Act who require aftercare is also free.
Care In Your Own Home
Care is provided by the local authority either directly or through a third party. It is only provided if needs are assessed as "Critical" or "substantial". Will pay according to income.
Residential Nursing Care
If it is impractical to remain at home, you can move into residential or nursing home. Cost will vary according to needs.
The Local Authority carries out a financial assessment to see whether you can be self funding or not.
Paying For Home Care
To qualify for financial support you must have less than £22,250 in savings and investments (excluding home). Any savings held jointly are only half counted. You will pay for care on a sliding scale, depending on income.
Paying For Residential Care
Savings and Investments (including home) are more than £22,250 there is no financial help. The home is ignored if occupied by a spouse or relative over 60,or incapacitated or a child. There is non-means-tested financial help from the NHS for nursing care.