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.

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.


Choose your executor/executors with care

If an executor of a Will loses mental capacity, this can cause problems and delay in administering the estate.

It is advisable when making a Will to appoint more than one executor, and for at least one of the executors to be younger than you. This minimises the chances of the executors pre-deceasing or losing capacity before or around the time of your death. Of course, if one of your executors loses capacity during your lifetime, you can change your Will and appoint someone in their place (providing you have the capacity to do so). However, many people do not review their Wills regularly enough and die without realising that the executor they appointed many years ago has since lost capacity.

In such circumstances, and if a Lasting Power of Attorney was not drawn up by the executor, an application should be made to the Court of Protection for a Deputy of Property of Affairs to be appointed for the executor. The application should ask for specific authority to deal with the deceased’s estate. A Court appointed Deputy will satisfy the probate registrar, who can then issue the grant to the Deputy.

The Deputy will of course also be in charge of managing the finances of the executor who lacks capacity, as well as dealing with the deceased’s estate, which will be beneficial if not essential to the one who lacks capacity.

We recommend that you choose more than one executor and that at least one of your executors is younger than you.

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 increasing need for end of life care

Recently published official statistics from Public Health England revealed that in 2018, there were 10.1 English care home beds for every 100 people aged 75 years and older and 4.9 nursing home beds for every 100 people aged 75+. Both figures show that the trend over the last 5 years is gradually decreasing, resulting in less care and nursing home beds for the older generation.

Public Health England published the care home and nursing bed rates in their February 2019 end of life care profiles update. In their methodology, Public Health England state that “The rates describe the availability of residential and nursing home beds in comparison with the size of the population aged 75 years and older (as published by the Office for National Statistics). The ratio of beds to older population is a crude measure of care home bed availability.

With an increasing population of older people, the demand for residential care and nursing home beds is predicted to rise. According to the Care Quality Commission, this could be by as much as 71,000 by 2025. The NHS Long Term Plan recognises the need to upgrade the support currently provided to care home residents.

The February 2018 end of life care profiles update provides even more insight into this area. The update explores 2016 mortality data, specifically looking at the percentage of deaths in hospitals, care homes, at home and in hospices. The data reveals that in 2016:

  • 9% of people died in hospital
  • 8% of people died in care homes
  • 5% of people died at home
  • 7% of people died in hospices

Between 2004 and 2016, there has been a decreasing proportion of deaths occurring in hospital and a rising proportion of deaths in care homes, at home and in hospices. In 2004, 57.9% of deaths occurred in hospitals, highlighting an 11% decrease between 2004 and 2016. On the other hand, the percentage of people who died in a care home rose by 5.3% for the same time period. This trend further highlights the importance of ensuring care homes are suitably supported with enough beds to support the increasing need for end of life care.

As Estate Planning specialists, Casey & Associates is all too aware of the importance of end of life planning. Planning ahead with your family will almost certainly reduce the likelihood of any misunderstandings about how you want things to be handled when the time comes. It’s important to talk about your preferences for end of life care, including appointing a Lasting Power of Attorney who can make decisions on your behalf if you are no longer able to in the future. The importance of planning for your death cannot be underestimated. Having a plan in place ensures that your loved ones are not subjected to additional stress and upset at an already challenging 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.


Being named as an Executor

Around six million people have experience of acting as the Executor of a Will but just 4% realise that they are legally responsible for the accurate distribution of the estate that is entrusted to them. Past research has shown that 96% of Executors did not realise that they were legally and financially responsible for the accurate administration of a deceased person’s estate.

An Executor is responsible for administering the estate and is accountable to Her Majesty Revenue and Customs (HMRC) and the beneficiaries. The process of administrating the estate can be daunting given the legal paperwork, tax calculations and various administrative tasks that need to be accurately completed.

The main duty of an Executor is to ensure that the assets and liabilities associated with an estate are managed and dealt with efficiently. This involves valuing the assets, settling all liabilities, such as outstanding debts or mortgages. The Executor is also responsible for distributing what is left to the nominated beneficiaries in line with the instructions left in the deceased’s Will. If an Executor breaches their duty they can be held financially and legally liable for the consequences, even if they were unaware of their wrongdoing.

The time that it takes to administer an estate varies according to its size and complexity, as every estate is different. Administering an estate can be overwhelming, particularly as you will also be dealing with the loss of a loved one. However, Executors have the option to choose to appoint a specialist firm to do the work on their behalf, taking away the added stress at an already difficult time.

There is a clear lack of understanding amongst the public about what to do when someone dies. More specifically, the absent understanding of the liability that is associated with administering an estate. If the assets are distributed incorrectly, or mistakes are made during the estate administration process, it can be of great consequence.

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. Don’t delay ~ Act today!