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Wills Information Sheet - TERMS OF RETAINER

By Justin Phillips,2014-07-11 09:13
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Wills Information Sheet - TERMS OF RETAINER ...

    IMPORTANT INFORMATION FOR CREATING YOUR WILL

The current nil rate band (since April 08) is ?312,000 and every person has this entitlement.

    A person‟s estate over and above ?312,000 is charged at 40% unless the beneficiary is exempt. Exempt beneficiaries include spouses, charities and certain political organisations.

     thThe Government have announced a “transferable” nil rate band for spouses and civil partners for deaths on or after 9

    October 2007.

The old law meant that the nil rate band of the first spouse/civil partner to die could be wasted unless they had made a nil

    rate band discretionary trust Will or had left a nil rate band gift to a non-exempt beneficiary.

Now the unused nil rate band of the first spouse can be transferred to the surviving spouse‟s estate to reduce the Inheritance

    tax on the second death. It makes no difference how long it is since the first death.

Although this is welcome news to families who have not taken advice it is just as important for individuals and couples

    alike to take estate planning advice and to review their wills regularly. There are still situations why couples would still

    need to include trust arrangements within their Wills. See note 4 below.

The following are the main types of Will and other legal documents we can prepare for you.

1. Single Will: This is suitable for a person who is single, widowed or divorced and ensures that the people they want

    to benefit from their estate will do so.

2. Mirror Will: This enables a couple, whether married or not, to make provision for each other on the death of the

    first of them and then direct their estate to the people they choose on the death of the survivor. This is suitable

    where Inheritance Tax (IHT) is not an issue.

    3. Severance of Joint Tenancy: Most couples own their home as joint tenants so that when one of them dies the

    survivor automatically takes ownership of the whole property. To make maximum use of any trust arrangements, it

    might be necessary to split the tenancy so that each party owns half of the property and this can then be dealt with

    in their Will. Holding property in this way does not affect any mortgage or your continued use and enjoyment of

    the property. If you need to consider any other changes to your assets, please consult a financial adviser.

    4. Will Incorporating Discretionary or Other Trusts: It is possible to provide for a property or assets to be held in

    Trust for someone to have use of them or benefit from them during their lifetime with those assets then passing on

    to other beneficiaries. If provision needs to be made for a disabled child or relative, this can be done by means of a

    Trust. (Please give details in the „Additional Information Section of the Questionnaire – point 9.)

    There may be compelling reasons to include trust provisions in your Will :

    o Couples may still prefer to “bank” the nil rate band on the first death or give the survivor the opportunity of

    doing so. There may be further changes in the law.

    o The nil rate band may not increase at the same pace as inflation. If assets are placed in trust on the first death

    then any growth and the resulting tax burden can be removed from the survivor‟s estate for tax purposes.

    o The transferable nil rate band is not automatically deducted on the second death. The personal representatives

    (i.e. executors) must claim it within 2 years of death.

    If you require any assistance, please contact Claire Fountain ? Tel: 01483 537633 ? Fax: 01483 576454 ? Email: c.fountain@wheltons.com 1

o The surviving spouse may remarry. If the first spouse created a “nil rate band” trust there is a potential for

    the combined estates to benefit from 3 nil rate bands (i.e. also of the survivor and second spouse) before tax

    would be payable.

o The first spouse may have a business or agricultural property and a trust continues to offer additional tax

    planning benefits.

o You may want to protect assets for certain beneficiaries against the effects of divorce, bankruptcy, the

    survivor‟s second spouse, or means testing for nursing home/care fees.

    5. Lasting Power of Attorney (LPA): This document allows an individual to appoint people they trust to look after

    their affairs should they become unable to do so themselves at some time in the future. Many people see this as an

    associated part of the long term planning process when making a Will.

It can be drawn up at any time while you have mental capacity but has no legal standing until it is registered with

    the Office of the Public Guardian.

The changes in the law came into effect in October 2007. The old style Enduring Power of Attorney can no longer

    be made although those that were created prior to October 2007 can still be used.

There are now two types of LPA:-

Property and Affairs

    This allows you to choose someone to make decisions about your money and property and to manage such affairs.

    A registered LPA can be used at any time whether you have the mental ability to act for yourself or not.

Personal Welfare

    This type of LPA allows you to choose someone to make decisions about your healthcare and welfare including the

    decision to refuse or consent to treatment on your behalf and the decision as to where you live. These decisions

    can only be taken once you lack mental capacity and of course the LPA must be registered.

    If you require any assistance, please contact Claire Fountain ? Tel: 01483 537633 ? Fax: 01483 576454 ? Email: c.fountain@wheltons.com 2

    COMPLETING THE WILLS QUESTIONNAIRE

    SECTION 1: To be completed in all cases.

As you are the person making the Will you will need to include full names.

A Will is usually cancelled by subsequent marriage but when making Wills for unmarried couples who have a

    wedding date set your Wills can still be prepared which will remain in force.

It is extremely important that you advise us of any property held abroad and if you have a Will in that country.

We would strongly recommend that you seek legal advice from someone qualified in the law of the relevant

    country regarding the inheritance and taxation position.

Your Will may not be effective to pass property you own which is located outside England and Wales. We do

    not offer advice on foreign assets as part of our standard Will drafting service. If you inform us that you own

    property abroad and that you require advice in relation to it, we will either provide such advice for an additional

    fee or we will direct you to alternative specialist advice.

SECTION 2: To be completed in all cases.

The executors are the people who deal with your estate and distribute your assets according to your Will. They

    will also be responsible for dealing with any Trusts set up under the Will. You should therefore appoint people

    you trust and feel would be able to do this. Up to four executors can deal with your state and if you require a

    Will including IHT planning trusts, we would recommend at least two other executors in addition to your spouse

    if you are not appointing a professional executor.

Please tick the appropriate box provided to indicate if your spouse/partner/fiancé is to be an executor.

Please give the full names, addresses and relationship of other executors you wish to appoint.

SECTION 3: To be completed if you have minor children.

If you have children under the age of 18 you should appoint guardians to look after them if you and your

    spouse/partner/fiancé die. Your Will can pass parental responsibility for your children to guardians of your

    choosing. Please give the guardian‟s full name, address and relationship.

If you wish, you can also appoint reserve guardians just in case your first choice guardians are unable to act for

    any reason.

    SECTION 4: To be completed if you wish to make gifts of personal items or fixed amounts of cash.

If you wish to leave gifts of personal items and are happy to give informal instructions to your executors to carry

    out your wishes after your death as indicated to them in any letter or note (please tick the box at section 4a). This

    has the advantage that the instructions to your executors can be changed without changing your Will.

If you wish any personal items you want to give to be listed in your Will, or if you wish to give a fixed cash

    amount, please give details in section 4b. The full name and address of the person to receive the gift, their

    relationship and details of the gift must be given. If it is a gift of a personal item, this should be described as

    fully as possible, eg. „my late grandfather‟s gold pocket watch‟ rather then just „my watch‟, so that this can be

    easily identified by your executors without confusion.

    If you require any assistance, please contact Claire Fountain ? Tel: 01483 537633 ? Fax: 01483 576454 ? Email: c.fountain@wheltons.com 3