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Attorneys making gifts under an LPA

By | LPA | No Comments

Subject to instructions saying otherwise, attorneys of a Property and Affairs Lasting Power of Attorney have a power to make: Gifts to charities that the donor may have given to; and Gifts to family members, friends or acquaintances of the donor on ‘customary occasions’ A customary occasion for this purpose means occasions where is it usual for gifts to be given, for example a birth, a birthday, a wedding/civil partnership, an anniversary or religious holidays. Any gifts made by attorneys must be reasonable in regards to the size of the donor’s estate and their expected current and future needs. The type of gifts the donor used to make when they had capacity should also be considered although just because a donor used to make generous gifts, it does not mean that it would be reasonable for the attorneys to make similar sized gifts, for example if care home fees have…

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Why use a Business Property Relief Discretionary Trust?

By | Business Property Relief | No Comments

It is fairly common for spouses, where at least one of them owns a business and they wish to leave this to their spouse upon their death. On first death, this would be free of inheritance tax due to the spousal exemption. Second death should also be considered. If a business qualifies for business property relief, it may also pass IHT free on second death (should it qualify for the full 100% relief). What if the surviving spouse does not want to run their late spouse’s business, or if a business partner wants to buy the deceased’s shares off the spouse? They may decide to run the business for a while but eventually sell it on in their old age to retire. This would lead to an increased Inheritance Tax liability, as an asset which is Inheritance Tax exempt (the business) is replaced by one subject to Inheritance Tax (cash)…

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How Attorneys Can Act

By | LPA, Uncategorized | No Comments

Where a client is wishing to appoint multiple attorneys or replacement attorneys, it should be considered how these attorneys are to act. Multiple attorneys can either act jointly, jointly and severally or jointly in some matters and jointly and severally in others. Attorneys acting jointly must make decisions for the donor together and must all agree. Attorneys acting jointly and severally on the other hand can either act together or independently. Attorneys may also act jointly in some matters and jointly and severally in others. An example of this being where a donor wishes the attorneys for the Property and Affairs LPA to act jointly in relation to matters worth over £10,000 and to act jointly and severally in all other matters. On first glance, attorneys acting jointly seems very desirable. It provides an extra safeguard as all must act together and agree on the action, restricting the possibility for…

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Unregistered Land

By | Land Registry, Property | 2 Comments

Whilst it is becoming less and less common these days, from time to time you will come across clients whose land is unregistered at the Land Registry. This will usually come to light if we are searching for a land registry title to see if a property is held as joint tenants or tenants in common. The fact that a property is unregistered is not a cause for alarm with a severance. In such a case, WillPack will provide just two copies of the notice of severance. These should be signed by the owners and one copy with their Wills and a further with the title deeds. Their intention to sever to tenants in common, evidenced by the signed notice, will be legally binding. It is however highly advisable that owners register their property with the Land Registry during their lifetimes for a number of reasons. A disposition of an…

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Time Delays

By | Drafting, Taking instructions | No Comments

The issue of time is a problem which nearly all Will Writers will face, most commonly due to the age or health of the testator. The case of White v Jones [1995] highlights this issue. A Solicitor took instructions and was found to be negligent because more than 40 days had passed, from the taking of the instructions and the client then dying before the Will was produced. When instructions are taken and submitted to us, any health and age issues must be clearly highlighted to us so we can ensure that there are no time delays in producing the documents. With issues such as these, we would hasten the drafts as best we can. We also combat these issues with a draft term of 10 working days for all cases that have not been expressed, with even shorter draft terms for the expressed cases to ensure the service requested…

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Second Death Gifts

By | Gifting, Inheritance, Wills | No Comments

Many couples making Wills wish to leave bequests of particular items, sums of money, or a share of their estate, but only when both testators have passed away. So how can we ensure this happens? The way to ensure that a gift is only made on second death is to place the gift(s) in both Wills, and ensure there is a condition that states the gift should only be made should the partner/spouse has predeceased the testator. For example, ‘If my wife Susan Smith has predeceased me, I give…’. When making a second death gift, the testator is giving this gift to their partner/spouse on their death as part of the Residue of their estate, therefore on the death of the survivor, the gift is made payable from the survivor’s estate. If the clients have requested a second death gift in their Will, but it has only been placed in…

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Hotchpot

By | Inheritance, Property, Wills | No Comments

For parents who have more than one child, it may be necessary during their lifetime to make monetary advances to help a particular child or children but not all at that time. For example; the purchase of a house or to help clear a debt problem. The advancement can be either be made as a gift or a loan. Upon the death of the parents, in most cases they would wish for all of the children to have benefitted the same so that there is no unfairness felt between the children. The above can be achieved simply by the inclusion of a ‘Hotchpot’ clause within the Will. Whether the advancement was made either as a gift or a loan is irrelevant because the clause will work in the same way. The Hotchpot clause relies on the testator keeping a record outside of the Will of any gifts made and in…

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Discretionary Trusts

By | Property, Trustees, Trusts | No Comments

The Discretionary Trust is a common Trust for a Testator to use for their children to ensure that they do not inherit directly from their estate. The reasons for this can vary, for example, protecting assets from potential divorce, drinking or gambling issues, or the testators may wish that their assets are distributed in a particular manner or at certain points in their children’s lives that are outside the capabilities of the Will itself. This type of trust is effective because the assets are held and managed by the Trustees to distribute to the beneficiaries at their own discretion, hence the name of the trust and just because a beneficiary is named under the trust does not mean that they are absolutely entitled to any assets – useful where the Trustees may have concerns over how the money may be used.  Where beneficiaries are named under the Trust; this can…

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