Frequently Asked Questions
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Q: What areas do Legal Services cover?
We cover the whole of Kent as well as some areas of Essex, Sussex, Surrey & London. If you are from outside of these areas, we may be able to recommend a professional in your particular area.
Q: Where would we meet and how long would the meeting last?
We will visit you at home at a time convenient to you. You should allow approximately 90 minutes for the initial meeting.
Q: What are the costs?
This will vary according to your particular circumstances, but we are competitively priced for the level of service we offer. When we discuss the various options with you, the price of each one will be fully explained.
Q: How safe am I using Legal Services?
As members of the Society of Will Writers we have full Professional Indemnity insurance cover of £2.5million in place. If you choose to have your documents stored with National Will Safe, they will have the benefit of £2million insurance cover for the duration they are in storage. These are important facts that offer you real peace of mind that you will be dealing with a professional and ethical organisation.
Q: Will my personal details remain confidential?
We are registered under the Data Protection Act 1998 and accordingly all information disclosed to us will remain totally confidential. We will only share information with your express permission.
Q: Why do I need to name an executor?
An executor is the person of your choice who is given the responsibility of administering your Estate. It is a very important job and you will want to appoint somebody you trust and who is capable of dealing with the various companies and institutions (banks, government departments etc) to finalise your affairs. They will also have the responsibility of distributing your Estate as set out in your Will. Many couples name each other as an executor and often joint executors are named. It is also good practice to name one or more reserve executors, in case the first named is unable to carry out the job in the future.
Q: What about a professional executor?
Many people like to name a professional executor to act alongside the friend or family member named as the first executor. This gives them peace of mind in knowing that their loved one will not be alone at what will obviously be a distressing and emotional time. We can offer advice in this area and give you details of reputable professional executors that you might like to consider appointing.
Q: If I leave my money to my children, when will they receive it?
The legal age of inheritance in England is 18. If your children are 18 or over they will receive the inheritance immediately or if they have not reached that age, they will be eligible to receive it on their 18th birthday. Many people believe that 18 is far too young for a person to receive what might be a substantial sum of money and are worried what the consequences might be if that were to happen. You can safeguard against this potential problem by incorporating a Children’s Trust into your Will, which will enable you to specify the age, say 25, at which your children would receive their inheritance and you would nominate trustees to manage the money until then. The trustees would be granted the authority to make interim payments to the children if they felt it was necessary and appropriate.
Q: Do I need to use Trusts in my Will?
This depends on your particular circumstances and what you would like to achieve. You may feel that a Children’s Trust as mentioned above would be beneficial. If you are looking to protect your property from being vulnerable to third party social threats or if you are looking to protect the inheritance of children from previous relationships, a Protective Trust Will may be something you should consider. Alternatively, you might like to consider Inheritance Tax Trust Wills to reduce your children’s exposure to a large Inheritance Tax bill after their parents have passed away. The benefits of all of these Trusts and whether they are appropriate in your situation will be explained in full to you at the initial appointment. You may also like to consider Lifetime Trust Planning for which questions and answers are shown below.
Lasting Powers of Attorney
Q: I have been advised to have a Lasting Power of Attorney. What is one of those?
A Lasting Power of Attorney (LPA) is a legal document that enables you to authorise somebody to act on your behalf if you are unable to do so in the future. There are two types of LPA, Property & Financial Affairs and Health & Welfare.
Q: What are the differences between the two types of LPA?
Property and Financial Affairs Lasting Power of Attorney
A Property and Financial Affairs Lasting Power of Attorney lets you choose one or more people to make property and financial affairs decisions for you. This could include handling payments and paying bills and decisions concerning any property that you own. You can either appoint someone as an attorney to look after your property and financial affairs only when you lose the ability to do so yourself or you can, if you wish, appoint the attorney(s) to act at any time (for example during short-term periods of illness).
Health and Welfare Lasting Power of Attorney
A Health and Welfare Lasting Power of Attorney allows you to choose one or more people to make decisions for things such as medical treatment and care. A Health and Welfare Lasting Power of Attorney can only be used if you lack the ability to make decisions for yourself.
Q. Why should I have a Lasting Power of Attorney?
If you were to lose the capacity to make your own decisions through accident or illness, and you didn’t have a valid LPA in place, your family would have to apply to the Court of Protection for a Court Deputyship Order authorising them to act on your behalf; a costly and emotionally distressing process. In the meantime, any assets or bank accounts in your sole name would be frozen. Setting up an LPA whilst you are able to do so is like putting an insurance policy in place. A small one-off payment now can prevent a lot of distress and expense for your family in the future.
Q. What protection is there for me when I set up a Lasting Power of Attorney?
Having a Lasting Power of Attorney is a safe way of maintaining control over decisions made for you because:
• it has to be registered with the Office of the Public Guardian before it can be used
• you choose someone to provide a ‘certificate’, which means they confirm that you understand the significance and purpose of what you’re agreeing to. Legal Services will complete the certificate as part of their professional service
• you can choose who gets told about your Lasting Power of Attorney when it is registered (they are given the opportunity to raise concerns, if they have any)
• your signature and the signatures of your chosen attorneys must be witnessed
• your attorney(s) must follow the Code of Practice of the Mental Capacity Act 2005 and they have a legal duty to act in your best interests
Q: I have my own business. Should I deal with this seperately in my Will?
You don’t have to but you might like to do so, especially if it is a Limited company. By appointing a separate business executor (often your accountant) to only handle your business affairs, you can be sure that your business affairs will be completed by somebody experienced and competent to do so. This will also spare your first named executor, who might well be somebody completely unconnected to the business, from having to get involved in things they are unsure of. The business executor will have discretion to decide what is in the best interests of the business after your death.
Q: Is there anything else I should consider in relation to my business?
You should seriously consider having a Property & Financial Affairs Lasting Power of Attorney. This would offer you the protection of having somebody of your choice to carry on business functions on your behalf if you are not able to do so in the future. A Property & Financial Affairs LPA is considered by many business people to be a vital part of their Business Continuity Plan.
Q: What is Business Property Relief (BPR)?
BPR can be claimed if you leave a “qualifying” business as part of your Estate. BPR can give either 100% or 50% relief from Inheritance Tax, depending on the type of business assets. This is a very important consideration within the Estate Planning process for business owners and further specific advice can be given, upon request.
Q: I am the named executor in the Will. What are my responsibilities?
Amongst other things, an executor is responsible for:
• Interpreting the Will and ensuring that the wishes of the deceased as expressed in the Will are carried out
• Identifying all the assets and liabilities of the Estate
• Obtaining valuations of the joint and sole assets as at the time of death
• Ensuring that the Estate of the deceased is handled efficiently and that the funds and assets in the Estate including businesses, are properly managed
• Preparing tax returns for the deceased for Inheritance Tax, Capital Gains Tax, Income Tax and Stamp Duty Land Tax
• Settling all the debts of the Estate including all taxes
• Completing and filing the relevant court forms
• Applying for Probate
• Setting up any Trusts declared in the Will
• Preparing accounts for the beneficiaries and after payment of all claims, distributing the Estate
Q: There is no Will. Who is entitled to the Estate?
A person who dies without making a valid Will or without making a Will at all, dies intestate. The property that belongs to that person is then inherited according to a strict set of rules called the ‘intestacy rules’. Instead of the property passing to the people the deceased would have wanted, it is left to certain relatives in a particular order.
Effect of the Intestacy Rules
The intestacy rules create a trust over all of the property. This trust imposes particular duties and gives certain powers to the personal representatives (the ones appointed to manage the Estate when someone dies). The personal representatives must pay the funeral and administration expenses and any debts within the Estate. The amount left is called the residuary estate and will be shared amongst the family under the rules of distribution.
The right of a person to benefit on intestacy depends on their relationship with the deceased and whether other close relatives have survived.
Any spouse or civil partner takes priority over all categories of beneficiaries but may have to share the residuary estate with other beneficiaries. If the person who dies intestate has no surviving spouse or civil partner, his or her estate passes to other blood relatives according to a schedule within the intestacy rules.
Q: Somebody named in the Will has already died. What happens now?
It depends on how the Will is worded. It may make provisions for the inheritance to pass to the deceased beneficiary’s children or it may specifically name a reserve beneficiary. If no reserve provision has been made, it could lead to a partial intestacy being created.
Lifetime Trust Planning
Q: What is a Trust?
A Trust is a mechanism which allows individuals to benefit from assets without assuming the legal ownership of those assets. The ‘trustees’ have day to day control of the assets. A Trust can be extremely flexible and exist independently of the person who established it (the ‘settlor’) and those who benefit from it (the ‘beneficiaries’).
Q: What type of Trust is used in Lifetime Trust Planning?
Discretionary Trusts are generally used for this type of planning.
The settlor (the person setting up the Trust) gives the trustees discretion to pay the income and capital of the Trust to one, some or all of a nominated class of potential beneficiaries.
Q: What benefits are there in using a Trust?
There are various benefits depending on the individual circumstances. Some benefits are as follows:
• If you transfer assets into a Trust in your lifetime you can remove the assets from your estate but could still act as a trustee so that you retain control over the assets for the beneficiaries who you can benefit when appropriate in the future.
• A transfer of family company shares or agricultural property into a Trust can be a way of ensuring that valuable inheritance tax reliefs are utilised.
• By putting assets into a Trust you can give the beneficiaries the income or use of an asset without actually giving them the asset which is useful if the beneficiary is likely to spend the capital or the capital could be at risk from a divorced spouse, a trustee in bankruptcy, a detrimental third party influence, benefits means-test assessments, or long-term care assessments.
• The assets transferred into a Trust do not form part of the Estates of the beneficiaries, which can substantially assist their inheritance tax exposure.
Q: Are there any tax consequences when setting up a Trust?
• If the amount passing into the trust does not exceed the Inheritance Tax nil rate band (currently £325,000) there are usually no tax liabilities on creation of the Trust.
• Income from the Trust assets may be liable to Income Tax and/or Capital Gains Tax in the same way as personal income.
• As long as the value of the assets in the Trust remains below the Inheritance Tax nil rate band, there should be no further tax liability.
• Advice should be taken if you are considering making any lifetime gifts within seven years of setting up a Lifetime Trust.
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