Hospital patient life support

The importance of a Lasting Power of Attorney ~ Health & Welfare

The importance and peace of mind a Power of Attorney (LPA) can bring to a person and their loved ones has been recently showcased in the national spotlight. 

Annie Visser, has spoken publicly about the legal document which enabled her husband to “die with dignity”.

Bradley Visser, 38, suffered a severe traumatic brain injury when he crashed his electric skateboard at their Oxfordshire home in July 2019.

He had appointed his wife, his Power of Attorney ~ Health & Welfare (LPAH&W), and in the legal document recorded that if such an event happened, he didn’t want to live with brain damage.

He also set out in the document that Mrs Visser shouldn’t keep him alive if certain “life perimeters” were not met.

Annie Visser said:

“If he couldn’t be a daddy, if he couldn’t go to a rugby match, if he couldn’t provide for his family by working, and if he couldn’t be physically active, he didn’t want to be here.”

The LPAH&W meant Mrs Visser could present the hospital with a legal document stipulating Mr Visser’s wishes, and she, not the hospital, had the power to make life decisions for her husband.

This resulted in Mr Visser’s wishes being carried out, and his life support machine being switched off. He passed away two days later.

Following on from her experience, Mrs Visser is spreading the word of the importance of LPAs. She said: 

“It is a document with far more importance than a Will, yet no-one knows of it. That is what I am trying to change. I genuinely think if I didn’t have this piece of paper, I wouldn’t be able to get out of bed in the morning. The guilt of having to make a decision with no background knowledge on what that person genuinely wants is actually worse than the end result. I have been able to be as strong as I have been for myself and for the children purely because every step of the way I feel like I have Brad stood next to me.”

You can create your own LPAs (just like you can create your own Wills) but please consider using the services of a professional for these important documents. One of our consultants met a family this week where the wife had created her own LPAs. She has two children and two stepchildren. She wanted her children to act and her stepchildren to only act if her two children could not act. Unwittingly, she has created the document so that her two stepchildren will act with her children if her husband dies before her and she definitely does not want this. Furthermore, we include extra phrases in our LPAs such as authority regarding financial advisors and providing copies of the Will if needed.

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

Gift

Will gift allowance system replace inheritance tax?

MPs have proposed that the UK abolishes inheritance tax and replaces it with a gift allowance system.

On Thursday, 30th January 2020, the All-Party Parliamentary Group for Inheritance & Intergenerational Fairness (APPG IIF) published a report recommending the abolition of inheritance tax (IHT) and the way it works now and replace it with an entirely different gifting regime.

During the consultation process, various leading policy research organisation and expert tax bodies gave evidence to the APPG IIF which helped during the deliberations.

The current IHT offerings can cause frustration to families and has the overall perception that the process is unfair and complicated.

The proposal from the group would tax lifetime and death transfers of wealth at 10% instead of the 40% under current legislation on estates valued over the nil-rate band.

These new proposals also see the agricultural and business property relief, the capital gains uplift on death and the seven-year rule for potentially exempt transfers being abolished.

Gift allowances would also be replaced with one annual tax-free personal gift allowance of £30,000. If the limit is exceeded the excess would be taxed at 10%.

Estates that are valued over £2million would receive a 20% IHT rise. The group hope this would lead to less inheritance tax avoidance and would present the UK as an attractive domicile offering for wealthier individuals.

The nil-rate band would also be changed and ultimately replaced by a ‘death allowance’.

The APPG report also proposes to abolish potentially exempt transfers (PETs). Instead, gifts under £30,000 each year would be tax-free, and gifts above that threshold would be taxed at 10% immediately. No further tax would be payable at death on those gifts, giving families incentive to gift and certainty in planning.

All of these changes would hope to achieve the aim that the process is simplified.

Executor responsibilities

I have been appointed as an Executor ~ what are my responsibilities?

One of the most important aspects of making a Will is deciding who will be entrusted to carry into effect its provisions. An executor is a person appointed by the testator, the person making the Will, to deal with their property and carry out their instructions set out in the Will.

If you have been appointed as an executor, there are several considerations to bear in mind. First of all, because you will be taking on personal liability, make sure you know what you are doing if you proceed alone without the protection of legal assistance. Next, you should consider whether this is actually a role you are willing or able to take on. Acting as an executor can be complex and time-consuming as well as entailing significant responsibility.

Some of the key responsibilities of an executor include dealing with:

TAX

An executor will be responsible for dealing with HM Revenue & Customs and ensuring that any tax on the estate due is paid on time. This will include calculating the amount of tax (assessing for inheritance tax as a minimum but also closing off lifetime income tax and capital gains tax (CGT) and dealing with the same in the estate period). We generally recommend accountants handle the income tax and CGT reporting, but they will still need you as executor to collate all the information and sign off their paperwork.

ASSETS AND DEBTS

All of the estate’s assets will need to be located and collected in. An executor will also need to identify any outstanding debts to be paid out of the estate and deal with the payment of these efficiently and effectively.

The executor will then pay the legacies in the Will from the net estate. Where the estate is comprised of more than just cash, decisions about how to satisfy the Will legacies will be needed, whether this be selling or transferring the net assets or dealing with them in some other way. Different tax consequences follow depending on which choices are made. Where the transfer of the family home is concerned, the services of a conveyancer as well as a private client specialist may be required.

CLAIMS

The responsibility of dealing with any claims made against the estate will also fall to the executor to handle. We would typically class these as an open-ended post-death estate liability, so the sooner these can be settled, the sooner a net estate figure can be reached and the estate can move on to paying the legacies under the Will.

BENEFICIARIES

All of the beneficiaries of a Will need to be located and contacted regarding what has been left to them and this is another responsibility that the executor must deal with.

Remember that if you make any mistakes as an executor under a Will, you can be held personally liable for those mistakes.

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

Civil partners

Opposite sex couples can now become Civil Partners

It’s now official – opposite sex couples in England and Wales can formalise their relationship with a civil partnership rather than marriage. Civil partnerships were first introduced through the Civil Partnerships Act 2004 and were only available to same-sex couples. As of the 31st of December 2019, opposite sex couples have been able to form this union. The […]

Inheritance tax

Change to inheritance allowance in certain cases of intestacy

Where there is no Will the Government has increased the allowance that a spouse (or civil partner) receives from their deceased partner, if there are children of the deceased, from £250,000 to £270,000. Most people think that if a couple are married then everything always goes to the surviving spouse when the first dies. This […]

Social care

Almost 2,000 homes per month sold to fund social care

On average, 1760 homeowners per month are being forced to sell their homes to fund their social care costs.

According to research, 21,120 homes were known to be sold in 2018 with the funds being used to pay for vital care. The actual figure of homes sold to fund social care is generally acknowledged to be between 40,000 and 70,000 per year.

In comparison, only 11,800 homes were sold to fund similar care in 2000. This represents a 77% increase in family homes being sold to fund the social care crisis in the past 19 years.

In 1999, the Royal Commission made recommendations and suggestions to make care-free at the point of use. However, subsequent Governments have failed to solve the problem with recent issues widening as the number of elderly people in need of social care increased whilst services and funding was cut in real terms.

There are question marks over the success of the Government’s Deferred Payment Agreements (DPA) which enabled social care users to defer payments until after they died. Whilst DPAs were designed to enable more social care users to remain in their homes, the roll out of this scheme has been sporadic and inconsistent. According to a freedom of information request, of the 93 local authorities who responded, less than a third (29) had accepted all DPA applications. Worryingly, 7 local authorities had failed to set up a DPA process for the elderly constituents to use whilst 3 local authorities had rejected all DPA applications it had received.

As the social care sector awaits a definitive solution to help alleviate a crisis on the verge of imploding, it is imperative that all social care users are offered the same treatment and the same opportunity to remain in their homes for as long as possible.

If you are a homeowning couple then, in most cases, we can protect 50% of the family home from Care Fees Assessment between the death of the first homeowner and the death of the second homeowner.

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

Bank cheque

The Bank of Mum and Dad

It seems that the “Bank of Mum and Dad” is now the eleventh largest mortgage lender in the UK with £7 billion being loaned to children each year.

Often these family loans are interest free and not documented. So, what happens when the parents pass away? Well things can get rather difficult.

Let us say that in 2012 Mum and Dad lent their son John £100,000 as a deposit on a property. Nothing was documented because it was a family arrangement. Mum and Dad had another child Mary who married a man who already owned a house, so Mary never approached Mum and Dad for a loan.

Mum and Dad died before John paid back the loan. John and Mary as executors to the estate had to decide whether the loan was really a loan or whether it was a gift. It was at this time that John and Mary found out about the “Presumption of Advancement”. The presumption is, in effect, that unless there is evidence to the contrary a transfer from father to child is a gift and not a loan.

When Mum and Dad died their total estate was £950,000 which meant there was no inheritance tax (IHT) to pay. They had told friends and family that they had managed their estate carefully so no IHT was due.

Whatever the decision regarding the £100,000 there would be a upsetting (and unwitting) consequence.

If it was decided that the £100,000 was a loan then the executors would need to call in the loan and add the value to the estate triggering an IHT liability of £40,000. If it was decided that the £100k was a gift then John would have received £100,000 more than Mary which is not what Mum and Dad intended.

Best advice is to make a decision about whether the transfer is a loan or a gift and record it in writing at the time. If it is a gift then this can be “balanced up” with a gift (in this case of £100,000 to Mary) in the Wills of Mum and Dad.

The most important thing in cases such as this is to take professional advice.

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

Inherits

The average age at which a child inherits from their parents is now 61

The “average” child may be financially secure with mortgage paid and a healthy pension. Alternatively, they may be struggling with debt and looking at working on into their seventies to supplement an inadequate pension ~ health permitting. Those in the latter category may be counting on an inheritance coming down from their parents.

With the average age of a parent now in the early thirties this means that our “average” child inheriting at 61 has children who are in their late twenties or early thirties. The average age of a first-time buyer is now 33.

So who do you leave your estate to? Children or grandchildren?

Do you know the state of your children’s finances? Do you think they are financially comfortable when in reality they might be struggling? If you leave your estate to your children are you just giving them an extra Inheritance Tax liability? If your children live in an area where house prices are high are your children “bricks and mortar rich” but “cash poor”?

If your children each have a different number of children and you wish to pass assets down to grandchildren what is fair? Do you give £n to be shared equally in each branch or do you give £nn to each grandchild? In the latter case the branch of the family where your child has the most children (your grandchildren) will benefit more than the branch with the least children.

Would your generosity to your grandchildren cause friction between your children?

What about the situation where one child is wealthy and another is not (perhaps through no fault of their own)?

Every family is different and there is no one answer to fit every circumstance. The above becomes even more complicated when stepchildren and thus step grandchildren are involved. Advice should be sought from a professional in these circumstances.

More and more families are carrying out probate and estate administration themselves without taking professional advice. However, sometimes the cost of using a professional can be more than covered by inheritance tax savings that might save the intergenerational family substantially more than the cost of the professional advice. For example, a Deed of Variation can reroute a gift to children on to their children (the deceased’s grandchildren) with no negative Inheritance Tax consequences.

Casey & Associates can assist our clients to consider the options when they are alive with careful planning using Wills and possibly trusts. Casey & Associates works closely with financial advisors to ensure a “joined up” Estate and Financial Plan for clients. And when our client sadly passes away we can offer advice regarding a Deed of Variation and formalisation of testamentary trusts. Casey & Associates offers an intergenerational planning service to our clients and their families.

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

Parents family

Average Age Of Parents Increases For Tenth Consecutive Year

The average age for both mothers and fathers has increased for the past decade, with couples choosing to delay parenthood probably whilst crafting their careers.

The average age of a UK father in England and Wales is now 33.6 years, according to recent data from the Office for National Statistics.

Mothers–to–be remain statistically younger but also continued the trend of delaying parenthood. The average age of a mother in England and Wales is now 30.6 years old.

Since the record lows of 1975, the combined average mean age of parents has increased by 4.2 years.

In total, there were 657,076 births in England and Wales last year. The statistics seem to suggest that many parents in England and Wales would benefit from making a Will to ensure their wishes are executed following their death.

The 326,836 births recorded by parents outside of marriage represented 48.6% of all births, more than 1% above the five–year average of 47.62%. Failing to make a Will, whilst unmarried, could present many issues for the family if a partner dies intestate (without a Will).

This issue could also present inheritance tax headaches for loved ones, especially a partner, if they die without leaving such a crucial document such as a Will.

Almost a third (32.5%) of men and women, who had children in 2018, made joint registrations and lived at the same address. This could indicate that they share access to a property, yet this might not be considered if the registered property owner dies intestate.

Given the fact that 3.2% of all parents, who had a child in 2018, were aged over 45, more parents need to consider the importance of a Will.

478 fathers over the age of 60 had a child in 2018. This suggests that making a Will, or at least reviewing a current Will needs to be a greater priority since the most recent child may be unwittingly disinherited.

Only 45% of adults in the UK have an up to date will, according to a 2018 survey by King’s Court Trust. Worryingly, only a quarter (26%) of parents with children under the age of four have a valid Will. It is really important to have a Will specifying a guardian.

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

Will writing

Only 10% of Brits Have Planned For Death

New research has revealed only 10% have planned for their end of life which suggests there is still a huge stigma surrounding death in the UK.

With death potentially causing financial catastrophes as well as grief, breaking the taboo around confronting death is still a big issue among Brits.

According to Sue Ryder Charity, who support people through the most difficult times of their lives, more than two-thirds of adults are not prepared for death due to not making a Will, were not aware they could choose where they wish to die and have not had conversations about their passing with family or friend.

Looking at research statistics, out of 2,002 people who were surveyed 68% of respondents do not have a Will and 70% have not even talked to their loved ones about dying.

Furthermore, it was found in the Sue Ryder Charity’s study that 67% did not realise they could document where they wish to die in a specific location.

Shockingly, only 10% of people surveyed had begun or completed planning for their death.

Heidi Travis, chief executive of Sue Ryder, said:

“We all need to start talking about the D word. Many of us plan for weddings and births, holidays and careers, yet we still shy away from planning for our death.

“Current research shows that only a quarter of deaths will be sudden. The period of time following a terminal illness diagnosis can be short as well as incredibly emotional, so don’t leave it until then to start planning.

“It may be easier to think about our ‘bucket list’ or the songs we want played at our funeral, but by taking the time to think about whether we would prefer to die in a hospice or at home, writing a will, setting up a lasting power of attorney or making an advance care plan, it is possible to plan for a better death.”

The Sue Ryder Charity, which supports people with complex needs and life-threatening illnesses across the UK and internationally, are campaigning to get people talking about death and encourage later life planning. As death is a difficult subject and painful and sad to think about, they have set up a guide to motivate Brits to discuss the ‘D’ word to help people plan a better death.

With the British people so reluctant to discuss, prepare or plan for their passing, St Mary’s University in London has set up a support site called ‘The Art of Dying Well’.

Margaret Doherty, director of The Art of Dying Well, said:

“The D word is still the elephant in the room.

“Fortunately, social media has helped to turbo charge the ‘D’ conversation and inspirational individuals have come forward to share their stories about love, loss, life, death and dying, but there’s still much to do to help each of us face our own mortality and those of the people we love.”

In 2018, a study was undertaken by Co-op into post-life matters which speculates that 18 million people find it increasingly difficult to consider and talk about their death. Of these, 13 million people understood that they needed to communicate about such matters, but the conversation would be held begrudgingly. Even though there have been many organisations in the last few years campaigning to create awareness of talking about death, most Brits still continue to find it a difficult and awkward conversation to have and shy away from it.

Creating a Will is one practical way to start planning for the inevitable.

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