letter of wishes

What is a Letter of Wishes?

When writing a Will, it’s important that you get your wishes down for who should be appointed as executors, trustees or guardians and how your estate should be distributed in a binding fashion. But what about your more general wishes for your estate, or for your children?

There are so many uses for a “letter of wishes” ~ here are some examples:

  1. Give your guardians some guidance

You’ve probably considered who you would want to care for your children if you died while they were still minors, and you’ve probably appointed these people as guardians in your Will. In your letter of wishes you can express exactly how you would prefer your children to be raised and how you wish the guardians to support them.

  1. Make your funeral wishes clear

A letter of wishes could include your preferences for burial or cremation, for what kind of ceremony you want. You could even include everything down to what music should be played, what readings should be read, and what kind of flowers displayed.

It is important that you make your funeral wishes known to your family as well as including them in a letter of wishes though. This avoids the funeral being carried out before your wishes are found.

  1. Give instructions to trustees

If you have included any trusts in your Will that give your trustees wide powers over how the trust is distributed, known as ‘discretionary trusts’, a letter of wishes is recommended. Under these types of trusts it is totally up to the trustees how they manage the funds and which of the named potential beneficiaries they benefit. In a letter of wishes you can include how you want the trustees to use their powers. For example if the trust could benefit your spouse and children you could request that the trustees treat your spouse as the main beneficiary for the rest of their life.

What you write in a letter of wishes isn’t legally binding, it is just guidance. The trustees should consider it when managing the trust though, and professional trustees will certainly try to stick to your wishes wherever possible.

  1. Distribute small personal items

You likely have lots of personal chattels. These are defined as ‘tangible movable property’ except money, and items held as an investment or mainly for business purposes. It’s quite a broad definition that could include your household ornaments, jewellery, furniture and cars. If you have a lot of personal items that you want to gift to specific people the easiest way to do this can be by including a clause in your Will that gifts all items fitting that definition to your executors with a wish that they distribute them following your letter of wishes.

Once this clause is included you can then write a separate letter of wishes to list the items you want to gift and who you want to gift them to. This is a very flexible way of dealing with your personal items so if you change your mind you can simply write a new letter without having to make a new Will.

  1. Exclude someone

If you have chosen to exclude someone from benefitting from your Will, your Consultant will have advised you whether to include a phrase in your Will or not and what the consequences are that the exclusion could have for your estate. You should also write a letter of wishes to detail your reasons for the exclusion, as this may be considered by the court if the excluded person did try to bring a claim against your estate. In these circumstances the letter is sometimes referred to as an ‘exclusion letter’ or a “letter to executors” instead.

Letters of wishes aren’t legally binding, but they’re useful for making sure you have got your less-formal wishes for your estate across to your executors, trustees and family.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

The risk of miscalculating Inheritance Tax due to HMRC

The Telegraph reported that ordinary individuals inheriting assets from overseas could risk criminal charges if they miscalculate the tax owed. New legislation was introduced in 2016 which meant that beneficiaries who inherit offshore money could see their income wiped out completely due to new penalties and punishments. The clampdown is part of HMRC’s latest attempt to close a ‘tax gap’ reported to be worth £34bn per year.

A loophole in the law meant that anyone owing UK tax for income earned abroad could come forward without fear of criminal charges or paying punitive penalties. However, the so-called ‘Liechtenstein Disclosure Facility’ (LDF) ended on December 31st, 2015 and meant that HMRC could impose penalties of at least 30% of the tax due and could investigate cases going back 20 years, in contrast to the current limit of 16 years.

In addition, the larger financial sanctions will be compounded by the fact that anyone miscalculating overseas taxes could be branded as a criminal. This position was confirmed in the Chancellor’s last Autumn Statement. “This won’t just affect serial evaders but ordinary people who make a mistake with their tax or bury their heads in the sand”, said John Cassidy, a tax investigations partner at Crowe Clarke Whitehall. “After the amnesty ends HMRC will become more vigilant and less sympathetic.”

It is reported that tens of thousands of Britons underpay tax on offshore assets each year. However, this is often due to a lack of understanding, as in the case of a 92 year old woman who discovered that the Swiss bank account she inherited from her late husband was liable for back taxes. As she was a joint holder of the account, she would be branded a criminal under the new laws. Dealing with the tax implications of an estate can be a complicated process even if overseas assets aren’t involved. Many people think that they have enough knowledge and experience to deal with the estate but often end up requiring professional assistance at some stage in the process. Executors are financially and legally responsible for the distributions that are made, so you must be 100% confident that you know what needs to be done; otherwise there could be a nasty shock waiting after the estate has been distributed.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

civil partners mixed sex

Civil partnerships will soon be available to mixed-sex couples

Theresa May has taken a Bill through parliament that will mean all couples in England and Wales will soon be able to choose to enter into a civil partnership, instead of getting married. Currently, the law allows same-sex couples to either marry or enter into a civil partnership but mixed-sex couples can only choose to marry.

Civil partners benefit from a legally recognised relationship which includes many of the same rights as married couples with regards to inheritance, tax benefits, social security and pensions. However, they avoid the religious connotations of marriage and could be a popular option for those who believe that marriage is an age-old institution. The process of getting married varies from that of forming a civil partnership. Firstly, no ceremony is required like in a traditional marriage but both parties must sign a civil partnership document in front of a registrar and two witnesses. Secondly, vows do not need to be exchanged and the father is not required to ‘give away’ his daughter. In addition, marriage certificates only include the fathers’ names of the parties getting married but on a civil partnership certificate, both parents of the couple are named. Civil partners are also not allowed to refer to themselves as ‘husband’, ‘wife’ or ‘married’ but would instead call themselves ‘civil partners’.

Without a valid Will, your estate would be deemed intestate and your assets would be distributed following the rules of intestacy. In England and Wales, that would mean that your husband, wife or civil partner would keep all of your assets (including any property) up to the value of £250,000. In addition, they would be entitled to all of your personal possessions, no matter what their value. If the estate is worth more than £250,000, anything above this amount would be divided in half between the spouse or civil partner and the deceased’s surviving children. If a child had predeceased, their children would inherit in their place.

If you do have a valid Will, your estate will be administered in line with the wishes you’ve left in your Will and the Executor you’ve appointed is legally and financially responsible for the correct distribution of your estate. However, if you were one half of a cohabiting couple and you were to die without a Will, your partner would not receive any of your assets. Instead, your estate would be distributed as per the rules of intestacy. Where the deceased has no surviving relatives, the whole estate goes to the Crown. These intestacy rules apply to England and Wales and differ from those in Scotland and Northern Ireland.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

grant of probate

Fees to obtain a Grant of Probate are expected to increase

In November 2018, the Ministry of Justice announced that legislation to introduce tiered probate fees had been presented before Parliament. We expect to see these changes to probate fees coming into effect sometime during 2019. These increases in probate fees have been in the news since February 2017, when the plan to introduce a banded structure of fees based on the estate value was originally revealed. After a delay, it now appears that the government will finally move forward with the changes this year.

The current fee for obtaining a Grant of Probate is £215 for individuals and £155 for professional bodies. The new fees will instead be based on the value of the estate as follows:

Estates worth less than £50,000 will typically not require a Grant of Probate. The estate threshold will rise from £5,000 to £50,000 when the legislation is introduced.

  • from £50,000 up to £300,000 = £250 fee;
  • from £300,000 up to £500,000 = £750 fee;
  • from £500,000 up to £1 million = £2,500 fee;
  • from £1 million up to £1.6 million = £4,000 fee;
  • from £1.6 million up to £2 million = £5,000 fee;
  • and over £2 million = £6,000 fee.

The planned fees have been largely criticised by the House of Lords.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.


Inheritance Tax could be simplified

It is expected that there could be some changes to simplify Inheritance Tax this year or next year. In November 2018, the Office of Tax Simplification (OTS) released their first report following a review of the current Inheritance Tax system. The Chancellor requested the review and the OTS provided recommendations to simplify Inheritance Tax from an administrative and technical standpoint.

The OTS recommended that “The government should implement a fully integrated digital system for Inheritance Tax.” We predict that the government will start to create a digital system this year but this will be a time-consuming task. It is probable that the government may first proceed with some of the other recommendations made by the OTS that will be quicker to implement.

These include simplifying the current Inheritance Tax forms, establishing a short form for the simplest estates, introducing an automated payment receipts system, and streamlining the probate and payment process with HM Courts and Tribunals Service. The current guide to completing an Inheritance Tax account runs to 92 pages.

It is also expected that the OTS is to release a second report covering wider areas of concern during 2019.

One little known fact is that you must pay any Inheritance Tax and interest that is due before you can get a grant of probate. However, you need the grant of probate to be able to gather in assets to the estate. So an executor may have to raise funds to pay the Inheritance Tax due on the deceased’s estate.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.


What happens to property when someone dies?

“What happens to a property when someone dies?” is a very popular question and it’s important that we all understand the answer when it comes to estate administration. When someone passes away, the responsibility of the property automatically falls to the Executor (when there’s a Will) or the Administrator (when there’s no Will). This means they are accountable for the entire estate administration period. If there is a Will they must follow the instructions in the Will or, if there is no Will, they must distribute the estate according to the rules of intestacy.

If anything was to happen to the property after the owner had died, they would be responsible for dealing with any issues. Most household insurance policies do not cover unoccupied properties upon the policyholder’s death, or they have very strict conditions where the Executor or Administrator will not be covered if they breach any of the terms. The Executor or Administrator also needs to take care of the contents and belongings in the deceased’s property and deal with any utilities such as water, electric and gas. They must also arrange a valuation and, once a Grant of Probate has been obtained, transfer the property to the beneficiary/beneficiaries or sell it if it forms part of the residue of the estate.

It is important to ascertain how the property was owned. It could be that the property was owned solely by the deceased or they co-owned it with someone else, so the deceased only had a share in the property. Procedures are different depending on who owned the property and how they owned it. If the deceased was the sole owner, the Executor or Administrator can, once they have received a Grant of Probate, transfer (assent) the property to the beneficiary/beneficiaries. However, the Executor or Administrator must check to see if there are any trusts involved.

There is a lot to consider when it comes to dealing with the property when someone dies. That’s why it’s important to know what to do when the time comes and to ensure you have planned ahead to make things easier for the person appointed to administer your estate, as well as reducing the stress for your loved ones at an already difficult time.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

Prince's estate

Prince’s estate: the long legal battle

The iconic musician, Prince, died at his home in April 2016 without having made a Will. The singer was twice divorced and had no children or surviving parents. It took 12 months to determine his legal heirs. These being his sister and five half-siblings, as declared by a District Judge in Minnesota.

His assets included properties and the rights to his music. Court filings estimate the estate to be worth approximately $200m (£153m), however half of that value is expected to be absorbed by taxes.

Following his death, more than 45 people filed claims to the estate. In July 2016, a judge rejected claims by 29 people who argued that they were related to the musician and ordered genetic tests to be carried out on others. Similar tests had already been carried out to rule out the claim of a man in jail in Colorado who said he was Prince’s son.

It was then ruled that Prince’s siblings would inherit his estate, however, the judge also stated that the people who were denied the status of heirs must have time to appeal against the ruling. This meant Prince’s sister and half-siblings had another year to wait in order to receive their share of the millions.

Even though not all estates will reach into the high millions as in Prince’s case, it is still hugely important that people understand the benefits of being prepared, regardless of age or welfare. It is also important to think about how you want your estate to be distributed should the worse happen as it could be the difference between it being shared amongst your loved ones in line with your wishes, or a potentially divisive and unpleasant family dispute.

It is so important to make a Will or if you already have a Will to check that it is “up to date”. Casey & Associates offers a “free” home visit Will checking service for home owning couples who live within the areas we cover.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

Estate money

Estate decimated by legal fees

Did you read the report in The Times regarding a couple who were faced with an exorbitant legal bill of £115,000 which was ‘removed’ from a modest £300,000 estate. The deceased, the father of Paul Cutler, 47, had appointed a solicitor as the executor of his estate in his Will. Mr Cutler was alarmed to discover that the costs for administering his late father’s estate were spiralling out of control. When Mr Cutler complained, he was informed that only the ‘client’ of the solicitors i.e. the executor, in this case, the solicitor themselves, could complain, despite the obvious conflict of interest.

Acting as an executor of a Will has been referred to as ‘the role you didn’t want’ and can be a huge responsibility at an especially emotional time. Naturally, we want our loved ones to have as little to do as possible and we want our affairs dealt with efficiently. Appointing a professional can help to remove this burden from those left behind. Where there are complex family dynamics or perhaps a lack of family ties altogether, it is an especially sensible decision.

Problems can arise when a) a secure fixed fee is not obtained in advance of work starting and b) when the client is unable to complain effectively at the service being provided. Many people assume that probate and Estate Administration work should be carried out by a Solicitor who will charge by the hour. There are other options. Our advice, usually, is to appoint family as executors and ask the family to contact us, Casey & Associates, at the time of need. Our Consultant (usually the same person that has been advising the deceased for many years prior to their passing) will meet with the family executors and give “free of charge” initial advice. If the estate is uncomplicated then often the family executors can carry out the Grant of Probate and Estate Administration work themselves. We work with three affiliates who are regulated to process Grant of Probate and Estate Administration work. Our Consultant can give the family executors a fixed fee quotation to carry out the necessary work and then the family executors can instruct the work to be done by a regulated professional if they wish.

The regulated professional affiliates we work with have administered tens of thousands of estates on a fixed-fee basis.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

Inheritance modern life

Inheritance disputes on the rise – modern life to blame?

A record number of inheritance disputes are reaching the High Court despite rising court costs and the risk involved with losing a case. The number of cases brought to the High Court under the Inheritance Act in 2015 was 116, compared to 15 cases in 2005. The figure is considered to be just the tip of the iceberg when cases settled out of court or in County Court are taken into account.

Disputes can arise when no Will has been left and those closest to the deceased are not necessarily those entitled under the rules of intestacy. For example, a care giver or life-long friend would lose out under intestacy and the nearest, entitled blood-relative may be a distant cousin. Another, increasingly common cause for dispute is when a Will has become invalid due to a change in circumstances i.e. a divorce. This could result in parents or siblings of the deceased inheriting instead of the deceased’s new partner.

In many cases, a Will has been left, but someone doesn’t agree with how the estate is to be distributed. We had a recent case where an estranged daughter attempted to claim against an estate that was bequeathed to three animal charities.

It is estimated that around six million people cohabit in the UK, many of whom will be in ‘blended-families’ (where partners have children from previous relationships). The rise in inheritance disputes could be attributed to this growing change in family structure. But what else could be contributing to this marked increase? One view is that increasing house prices, and therefore the inheritance at stake, makes the risk of going to court worth the gamble.

It is more important than ever to make sure that you have an up-to-date Will tailored to your personal circumstances. Married homeowners may wish to consider a Will based on the Casey & Associates homeowner’s Will.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

Second marriage

Are you in a second marriage?

All names are changed to protect client identity.

One of our consultants met Mr & Mrs Green recently. Both are in their second marriage and both first marriages ended in divorce. Mr Green has two children (Andrew and Belinda) from his first marriage. They are in their late twenties and had “left home” when Mr & Mrs Green met. Mrs Green has two children from her first marriage (Christopher and Donna). They are in their late teens. They both live at home with Mr & Mrs Green. Mr Green has been very much part of their life as they have grown up. Mr & Mrs Green have a child (Evelyn) together who is now eight years old.

Mr & Mrs Green jointly own a house worth £500,000 with a mortgage that is covered by life insurance. They have almost no savings.

Talking about the distribution of their estate has been very difficult for Mr & Mrs Green because they can never agree on how much each child should receive.

Our consultant set the scene for Mr & Mrs Green by explaining what would happen if they did not make Wills. If Mr Green died first then when Mrs Green died the entire estate would be split between Christopher, Donna and Evelyn. Andrew and Belinda would receive nothing. If Mrs Green died first then when Mr Green died the entire estate would be split between Andrew, Belinda and Evelyn. Christopher and Donna would receive nothing. Mr & Mrs Green both agreed that this was unacceptable and realised that whatever they agreed to for their Wills was better than passing away without Wills.

Quite quickly, Mr & Mrs Green agreed that Evelyn should receive 50%, Christopher and Donna should receive 30% between them and Andrew and Belinda should receive 20% between them. They both realised that this was not a perfect solution but it was much better than what would happen if they did not have Wills.

We have created a special Will for homeowners. When the first of Mr & Mrs Green passes away, “their” half of the family home goes into a trust. The trustees are the surviving spouse and Andrew and Christopher. The trust is flexible so the surviving spouse can move home if needed. However, that 50% of the house is held in trust so that when the surviving spouse passes away, that half can only go to the children as agreed when both Mr & Mrs Green were alive. In other words, it means the surviving spouse cannot change their Will, making that 50% of the family home pass to “their” children.

This solution is extremely popular with our clients who are in second marriages.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.