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Mutual Wills

By | Wills | No Comments

Mutual wills are wills made between multiple parties in which they are making some mutual benefit to the other parties and the parties involved agree that the wills cannot be revoked with the consent of the others. On the death of any of the parties the survivors will be bound by the terms of the mutual wills. Mutual wills are most commonly made between spouses, gifting assets to each other on first death and then over to children on the death of the second. Whilst all parties are alive, they can change their minds at any time and revoke the mutual wills. Once one party to this agreement dies and the others accept their benefit from the deceased’s Will, the agreement not to revoke becomes binding on the other parties. On the face of it, this seems beneficial, however mutual wills have numerous issues. There is no flexibility for the…

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LPA’s – Instructions and Preferences

By | LPA | No Comments

In Lasting Power of Attorney documents, the donor can choose to place rules or guidance within the documents themselves to state exactly how they would like the attorneys to approach certain decisions should they lose the capacity to make decisions for themselves. This can be achieved on Section 7, Page 8 of each type of LPA under Instructions and Preferences. Placing a preference into an LPA is a non-binding wish that the attorneys may consider when making decisions on behalf of the donor. An example of this could be; ‘I would like to donate £2 a month to Cancer Research UK’. When the attorneys are making any decisions regarding any preferences specified in the LPAs, they must consider if this is how the donor would act, and if this is in the best interest of the donor. If the attorneys deem such a decision is not in the best interest…

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Codicils – What are they and why don’t we draft them?

By | Drafting | No Comments

A codicil is a document which is used to add to, alter or revoke parts of an existing Will. A codicil may even amend a previously existing codicil and there are no limits as to how many codicils a person could have. A codicil should mention what changes are being made, reference the Will and any earlier codicils by date and what amendments those previous codicils made and confirm the remaining terms of the Will. Codicils are subject to the same requirements of a Will and should therefore be signed and witnessed in the same manner as a Will. The witnesses however do not need to be the same as those from the original Will. WillPack will not prepare codicils to Wills and we instead recommend that changes be made by rewriting the Will and issuing a new Will. There are several reasons behind this. As codicils are separate documents…

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From the Desk of the DG – GDPR

By | Admin | No Comments

There is a lot of misleading information going around about the interpretation of the rules surrounding GDPR, and like a lot of professions, professional Will Writers, have neither been considered by Brussels when the Act was first drafted and from what I have seen and heard the people, being employed as professionals, to advise us are no wiser as to how we work and the size of the majority of our organisations. I have, over the past two weeks done little other than lobby everyone I know, and some I don’t know to get a definitive answer as to whether we would find ourselves in deep water (there is another phrase I could have used) but taking everything that has been told to me, including information from the ICO, as long as we are following the spirit of the Act, that is not misleading the public or using data we…

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Disabled Person’s Trust

By | Trusts | No Comments

A Disabled Discretionary Trust (also known as a Disabled Person’s Trust or a Vulnerable Person’s Trust) can be utilised where a child or other relative has a disability. There are essentially two reasons why a trust is considered advisable for disabled beneficiaries. If this person inherits from a Will directly, their entitlement to any means tested benefits could be affected. Alternatively, depending on the exact disability, the beneficiary disabled person may be unable to manage a large sum of money due. If that person also lacks mental capacity and does not have a Property and Affairs LPA, it is likely that an application would have to be made to the Court of Protection to appoint a Deputy. This is a lengthy and expensive process and incurs ongoing costs and should be avoided. A disabled person’s inheritance should therefore be placed into a Disabled Discretionary Trust. The disabled beneficiary is the…

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Setting up a Will-Based Trust After Death

By | Trusts, Wills | 2 Comments

It has been brought to our attention that there are some misconceptions in regards to what action needs to be taken for a Will-based trust after the death of the Testator. The following article is intended to clarify these points. A trust in a Will, such as a Protective Property Trust, Flexible Life Interest Trust or Discretionary Trust, is not automatically set up on the death of the client. The Will trust is not itself the trust, it is more of a direction that a trust of those terms is set up upon the client’s death. There are further actions which need to be taken by the executors upon the Testator’s death in order to set up the trust and clients should be made aware of these steps. A formal trust deed would need to be drawn up on death to create the trust. This will most likely refer to…

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Inheritance Tax Exemptions and Allowances

By | Gifting, Inheritance Tax | No Comments

Where clients are wishing to reduce their potential inheritance tax liability, there are lifetime inheritance tax exemptions and allowances they should be made aware of. For a number of these, they may need to seek regular advice from tax specialists to ensure that they will qualify for an exception or do not exceed an allowance. Annual Exemption Each person has an annual exemption of £3000 per year that can be gifted in any way that will not be considered for inheritance tax purposes. If the full £3000 is not used fully in that year, any unused allowance may be rolled over to the next year once. Small Gift Exemption Small gifts of £250 or less are exempt from inheritance tax. A person can make as many of these gifts as they like each tax year as long as the total amount gifted to each individual is less than £250. This…

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Chancellor requests a review of Inheritance Tax

By | Inheritance Tax | No Comments

In a letter published on the 31st January, the Chancellor of the Exchequer has requested that the Office for Tax Simplification carry out a review of the inheritance tax regime. The Chancellor has acknowledged that the inheritance tax system is complex and wished for simplification to ensure that the system is fit for purposes and operates as smoothly as possible. It is requested that the review considers: Technical and administrative issues, such as the process of submitting returns and paying any tax due Practical issues around routine estate planning and disclosure How current gift rules interact with the wider inheritance tax system and whether the current system causes distortions when making decisions about transfers, investments and other transactions. A document covering the scope of the review will be agreed and published by the Office for Tax Simplification in due course. This request for a review comes less than a year…

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Witnessing a Will

By | Wills | No Comments

Arguably the most essential step when making a Will is the attestation of the Will itself, as all Wills must be signed and witnessed for them to be valid. Along with the testator signing the Will, their signature must be witnessed by two independent people. This means that the witnesses must not be a beneficiary, or the spouse/civil partner a beneficiary of the Will. If a beneficiary, or their spouse/civil partner witnesses the Will and the testator subsequently passes away before the error is rectified, the legacy made to that beneficiary will be declared void, rather than invalidating the Will entirely. If, however only one person has acted as a witness to the Will, then the Will would be invalid as section 9 of the Wills Act 1837, states that two or more witnesses must be used. It is not a legal requirement that a Will should be dated for…

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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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