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Planning
for the future
Most people die without a will, which can sometimes lead to
difficulties and family disputes. By making a will you can
ensure that your estate will be dealt with by people you trust,
and pass to those you wish. In your will, you can ensure that
proper provision is made for those people you need to look
after. For example, you can make financial arrangements for
children whilst they are growing up, and appoint guardians
for them.
If
you die without a will strict rules determine who inherits
your estate, who may not be your nearest and dearest. It is
therefore important that you make a will properly tailored
to your circumstances.
How
do I go about making my will? - Contact one of our team to
arrange an appointment. You will need to provide the following
information:
- full
names and addresses of your executors and anyone you want
to benefit
- an
indication of your assets, their value, and whether inheritance
tax is a concern for you
- your
family circumstances
A
fixed fee is charged for a straightforward will. A slightly
higher fee is charged for straightforward “mirror”
wills. Our current fees are available on request. If a will
is more complicated we will provide an estimate, to reflect
the expertise and additional time involved.
Powers
of attorney
Many of us worry that as we grow older we will become too ill or confused
to handle our own affairs. We often have to turn to friends and relatives
for help. Sometimes, however, we need a more long-term solution. It
is then that we should consider giving a Power of Attorney to a relative,
close friend, solicitor or other professional advisor.
A
Lasting Power of Attorney (LPA) is a document in which you appoint someone
else to deal with either your financial affairs or care arrangements
for you.
You do not need to give up total control of your affairs unless you
wish to. You can continue to look after your affairs for as long as
you can; the appointment of an Attorney simply means that there is someone
to take over if and when you can no longer cope.
We
can also advise you about funding residential care fees and planning
your assets with this in mind.
On 1 October the
law changed to provide for Lasting Powers of Attorney, which can cover
both financial and health matters, and will require much more complex
arrangements than the old system of Enduring Powers of Attorney.
Enduring Powers
made before 1 October will continue to be effective. More information
to follow soon.
Dealing
with an estate
When faced with the death of someone close to you, arrangements
must be made to administer the estate. Andrew & Co can
help you:
- administer
the estate
- deal
with any tax implications
We
can also help you to register a death and arrange a funeral.
The
most common questions answered
Do I need a Grant? - Generally speaking,
if the value of the estate is over £5,000 it will be
necessary for the personal representatives to take out what
is called a Grant of Representation.
Is
it necessary to use a solicitor? - It is possible
to administer the estate yourself, but it is sensible to ask
a solicitor to deal with it for you, as it makes the process
less complicated.
How
long will it take? - It normally takes us 4 to
6 weeks from the time you first provide the information required
to prepare the papers for probate. Once you have signed the
papers, it takes approximately 7 to 10 days to obtain the
grant of probate. After that a simple estate will probably
take 2 to 3 months to complete. In large or otherwise complicated
estates the timescales can be considerably longer.
Will
I have to pay inheritance tax? - The general rule is that
you do not pay inheritance tax (IHT) until someone’s estate reaches
£300,000. This figure is correct at April 2007 and usually changes
annually on 6 April. After that figure you pay tax at the rate of 40%.
However there are exceptions to this rule. Andrew & Co can provide
detailed advice on IHT planning within a will, and during your lifetime,
which can save you and your family a considerable amount of tax.
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INHERITANCE
TAX UPDATE
In his pre Budget
Report the Chancellor announced changes to the Inheritance Tax Regime.
At present each individual has a nil rate band of £300,000.
If one of a married couple leaves their assets to the survivor, there
is no tax payable on the first death, but on the second death all
the family assets have piled up in the name of the survivor and there
is only one nil rate band before tax is payable, so one nil rate
band has been wasted.
The announcement
was that the nil rate bands would be transferable between spouses,
with the effect that if the nil rate band was not used on the first
death it would be used on the second death so that potentially £600,000
worth of assets can pass before tax.
Many couples
have made Wills containing nil rate band trusts on the first death,
which already achieve the same effect, and it is unlikely that those
kind of Wills will need to be re-drawn. Where such a trust is already
running after the first death but before the second, it may be appropriate
to make arrangements to wind it up.
The proposal
is retrospective. It appears that tax overpaid in the past will be
recoverable but it has not as yet been made clear how that will work
in practice.
These changes
apply to those in Civil Partnerships as they do a married couple.
They are not however law at the moment. The announcement was
of the introduction of the changes in next year’s Budget.
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Are
there any other tax implications? - Yes, you will need
legal advice on this because the tax aspect of administering an estate
can be quite complicated.
Why
use Andrew & Co?
Knowing the possible pitfalls in this area we strongly recommend
that you employ the services of a specialist solicitor. We
have a team of staff dedicated to this type of work. There
is no substitute for experience.
Principal
Contact Alison
Short
Direct Dial: 01522 781464
Profile
OR
Principal
Contact Helen
Newson
Direct Dial: 01522 781465
Profile
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