true story

A true story

One of our Consultants has asked us to share this true story. The names of those involved have been changed to protect identities.

“I am an estate planning practitioner. It is my job to assess an individual’s personal circumstances and advise them on how best to go about putting their affairs in order so that things go as smoothly as possible after they die.

From time to time I am asked for advice by friends and family. On one such occasion I was asked by my mother-in-law to give some advice to Mandy, the daughter of my mother-in-law’s neighbour.

Mandy was 20 at the time and she lived with her 18 year-old brother, Scott, in the family home, along with their mother, who had recently been diagnosed with terminal cancer. Mandy and Scott had an older sister, Lorraine, who lived in a council flat with her partner.

Mandy’s mother had no Will and she (Mandy) was becoming increasingly concerned that this would cause problems if her mother died before making one. I advised her that she should encourage her mother to write a Will while she was still well enough to do so. I also advised that it was imperative that any such Will granted Mandy and Scott a right to live in the family home, after their mother’s death, for such a period of time as to allow them to make plans for the future before having to sell the property and split the proceeds of sale between them and Lorraine.

Try as she might, Mandy could not persuade her mother to address the fact that she had no Will. It appeared that she was in denial over her condition and repeatedly told Mandy and Scott that she would get round to writing a Will when it became necessary to do so. Unfortunately her condition deteriorated rapidly and she died intestate.

Less than a fortnight after their mother’s death, Mandy and Scott received a letter from a firm of solicitors advising them that their sister Lorraine had appointed them to administer the estate of their late mother and that the property would have to be sold. Their mother’s funeral hadn’t even taken place yet Mandy and Scott were already facing up to the prospect of being turfed out of their home before they had even had an opportunity to grieve. Lorraine wanted her share of her late mother’s estate and had no desire to wait for it any longer than she felt she needed to.

It has been several months since I last heard from Mandy. When we last spoke she advised me that the relationship between her and Scott and their sister was at an all-time low and legal action was still ongoing to force Mandy and Scott to leave their home so that it could be sold. Mandy was receiving counselling and was signed off from work indefinitely with stress. Scott’s studies were affected badly and he had all but dropped out of 6th form college.

For the cost of a professionally created and suitably worded Will, this family could have been spared all of the upset, stress and worry that an intestacy caused. Regrettably it is a situation we see regularly. Don’t leave a mess like this behind. Act now, while you are still able.”

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

The importance of face to face meetings

At Casey & Associates we strive to maintain excellent levels of customer satisfaction. The starting point for this is a friendly face to face meeting in the comfort of your own home. Whilst there are a number of reasons why we prefer to meet in person, one of the more significant reasons is that we want to ensure that no one is influencing you, our client. Sometimes influence or coercion can be very subtle. It is essential that your Will truly reflects your wishes and at Casey & Associates we like to be sure that this is the case.

A recent article in the national press regarding a carer potentially coercing a wealthy pensioner shows how important this is. It is believed that the carer, a distant relative by marriage, not only coerced the gentleman at a time he was believed to lack mental capacity, but also assisted him with the signing of his Will. The now deceased pensioner, a retired banker, had previously made a Will in 2008 in which he appointed his three siblings as executors. He is thought to have had a close relationship with his siblings, who were each due to received 26% of his estate. His niece, nephew and a close friend were also due to benefit from his 2008 Will.

It is alleged that his carer took control of his life and excluded his siblings from further involvement with him. Two days before he died in 2014, a new Will was created. Under this Will, 40% of the estate was to go to the carer and her children.

The 2014 Will has since been challenged. The judge ruled in favour of the 2008 Will.

As professionals, regulated by the Society of Will Writers, we ensure that each person we meet has the testamentary capacity to create a Will and we carry out rigorous checks to make sure our client is not being influenced or coerced. The best way to do this is during a face to face meeting.

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

filing will

If your Will cannot be found when you pass away you do not have a Will

It is only three weeks since we posted an article about the importance of storing your Will securely. An incident occurred this week which highlights the need for professional storage.

The names of our clients have been changed to protect their identity. Mr & Mrs Smith became clients a number of years ago. It was the second marriage for each of them. Mr Smith had three children from his first marriage. Mrs Smith had two children from her first marriage. When our consultant visited Mr & Mrs Smith they gave us instructions that “everything was to go to the other when the first died and then when the second died everything was to be split equally between the five children”. Mrs Smith had brought more funds to the second marriage than Mr Smith and our Consultant made a file note that Mr & Mrs Smith advised him that the children of Mrs Smith might not be totally happy with the instructions that everything should be split equally between the five children. Our Consultant recommended that Mr & Mrs Smith take up our storage service so that nothing could happen to the Wills. However, our clients decided to store the Wills themselves.

Mr Smith died in 2016 and all assets went to Mrs Smith according to the Will of Mr Smith.

We received a telephone call from one of Mr Smith’s children last week. Mrs Smith had just died and the children of Mrs Smith had advised the children of Mr Smith that no Will for Mrs Smith could be found. Because no Will for Mrs Smith can be found she is deemed to have died “interstate”. Under the laws of intestacy all the assets of Mrs Smith will go to her children. The children of Mr Smith will receive nothing. If the Will of Mrs Smith had been safely stored with us the estate would have been distributed in the way that Mr & Mrs Smith had wanted.

The children of Mr Smith have lost out by some £300,000. This would not have happened if Mr & Mrs Smith had decided to store their Wills with us.

PLEASE consider storing your Wills safely and securely with Casey & Associates.

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

Did Ken Dodd have the last laugh?

Comedy legend Sir Ken Dodd recently passed away, aged 90. After previously being accused of tax fraud in 1989, from which he was acquitted, it seems Sir Ken may have had the last laugh.

Two days before passing away, Sir Ken Dodd married his partner of 40 years, Anne Jones. By doing so, he may have saved his estate a potentially costly Inheritance Tax bill.

Currently, an individual has a £325,000 nil rate band. This is the amount that an individual can pass free of inheritance tax. Home owners also have a residence nil rate band, allowing them an additional £100,000. Anything over this amount creates a liability for Inheritance Tax which is currently at 40%.

However, spouses can pass their assets to one another, free of inheritance tax. This means that for married couples who leave everything to each other, there is no inheritance tax to pay on first death regardless of the value of the estate.

Furthermore, for married couples who leave their estate to each other, their nil rate band allowance of £325,000 also passes to the surviving spouse. This means that when the surviving spouse passes away, they are able to combine the nil rate bands to leave £650,000 worth of assets, free of inheritance tax. Assuming they are property owners, they can also combine their additional residence nil rate band allowances enabling them to pass on a further £200,000 worth of property, tax free, subject to the surviving spouse leaving the family home to a direct descendant such as a child or grandchild.

These transferable advantages apply only to married couples. This means that regardless of how long partners have been together, and any children they may have together, they do not qualify for transferable inheritance tax relief.

By marrying his partner just before he passed away Sir Ken ensured that all his allowances were preserved and no tax was paid on his death.

If you would like to meet with one of our Consultants to discuss Inheritance Tax or any other Estate Planning topic please telephone 01732 868190 or click here.

(Please note that in this article spouse / married also applies to civil partner / civil partnership)

An LPA for any occasion

Lasting Powers of Attorney ~ Case Study 1

Existing client Wendy telephoned us in the middle of last year. Wendy advised us that her husband, Harry, had been diagnosed with early onset dementia and ask for a consultant to visit. Our consultant met Wendy and Harry a few days later at their home. We advised the couple to create Lasting Powers of Attorney (LPA) for Property and Financial affairs as well as for Health and Welfare whilst Harry had the mental capacity to do so. Our advice was accepted and Casey & Associates facilitated the creation of full LPAs for both Clients; with Wendy and both of the Client’s children appointed as attorneys for Harry and the children only as attorneys for Wendy.

As Harry’s mental condition declines the LPAs are becoming more and more useful; Wendy has benefitted from unrestricted access to bank accounts jointly held with her husband as well as the solely held account that his pension is paid in to. Furthermore, as a family, Wendy and her children have been able to make decisions about Harry’s increasing care needs. Without having the LPAs in place the situation would have been very different; Wendy may not have been able to continue to access even jointly held back accounts and certainly would not have been able to access Harry’s sole account. Furthermore, decisions about Harry’s care would not have been so easy had it not been for the Health & Welfare LPA we had helped to put in place.

Lasting Powers of Attorney ~ Case Study 2

We carried out a client review appointment with Dorothy early last year. Dorothy has been a school teacher for her lifetime. She never married and never had children. After retiring she became very active in the local community. Dorothy has a bungalow and quite substantial savings. Having previously been very sprightly, she was becoming increasingly unable to get out and about as easily as she had been and, as a result, was becoming increasingly reliant on a good friend who lived locally. Our consultant advised Dorothy that now was the time to put LPAs in place before her health declined any further. Our advice was accepted and Casey & Associates did the rest. Dorothy appointed her friend, Margaret, as her attorney and, on our advice, Dorothy appointed her niece as well. Although Dorothy’s niece lived quite a distance away, Margaret was not much younger than Dorothy and we felt a “backup” was needed should anything happen to Margaret.

Just before Christmas Margaret unfortunately had a fall and broke her leg. Although she is now discharged from hospital she will be housebound for quite some time. Dorothy has not suffered as a result of Margaret’s accident, however, as her niece has been able to continue to look after her aunt’s affairs.

Last week Margaret gave us instructions as she recognised that her change in circumstances would be best addressed by having LPAs herself. Margaret’s three children were all appointed as attorneys. Once the LPAs are registered Margaret’s children will be able to look after all aspects of their mother’s affairs while she continues to convalesce.

If you would like one of our Consultants to visit you to discuss LPAs please telephone 01732 868190 or click here to arrange an appointment.

funeral plan

The True Value of a Funeral Plan

Vivian (54) had her life turned upside down when her father, Joseph (84), passed away suddenly in November last year. Vivian’s mother, Juliet (82), had been housebound for some years due to dementia and Joseph was her carer. Joseph was very fit and well for a man of his age and his death was totally unexpected, leaving everyone in the family somewhat shell-shocked.

Due to her mother’s ill health Vivian was faced with the prospect of having to administer her late father’s estate on her own. Whilst her brother, Neil (58), was also an executor of Joseph’s estate he lived at the other end of the country to his sister and would not be able to readily assist her. Joseph left a valid Will but the Will did not contain any funeral wishes. Vivian was unable to get any guidance from her mother in this regard and so had to make all of the pertinent decisions herself.

When I discussed the administration of her late father’s estate with her, Vivian advised that the most difficult aspects of the role were all funeral related. She confessed to being in a “daze” most of the time and being upset about the sudden loss of her father and having to deal with such things straightaway was very difficult for her. Firstly, she had the task of deciding what type of funeral her late father wanted. Perhaps understandably, it had never come up in conversation during his lifetime and Vivian had no idea what her late father’s preference was between burial and cremation. Having decided upon a cremation for her late father, Vivian then had to visit an undertaker to choose a coffin and the type of service required. Vivian found this particularly upsetting as it was a constant reminder to her of the loss of her father, coupled with the uncertainty that she was perhaps choosing something that he would not have wanted.

The cost of the funeral was close to £6000. This was money that Vivian simply did not have. On top of everything else she had to contend with, she was now under added pressure to somehow come up with the money to pay for her late father’s funeral. Thanks to a benevolent neighbour who lent Vivian the money, the funeral was eventually paid for but she is now paying the neighbour back in instalments which is not ideal. “In hindsight I wish my father had put a pre-paid funeral plan in place. If he had done so, it would not only have saved me the upset of having to arrange everything at a time when I was very upset indeed, but I would also not have had to get in to debt in order to cover the cost. Above all else, I would have had the peace of mind to know my father was getting exactly the funeral he wanted. As soon as I am able, I will definitely be purchasing a funeral plan for my mother. I can’t go through all of that again.”

If you would like further information on funeral plans please do not hesitate to click here or telephone us on 01732 868190 requesting details of the options available.

consultant

A day in the life of a Casey & Associates consultant

Every client we meet has a different set of circumstances, needs and requirements. That is one of the reasons why being a Casey & Associates consultant is so interesting. Here is a snapshot of the clients one of our Consultants met last week. Client names are changed to protect privacy and identity.

Client 1

Jim (79) & Mary (76) – married couple and existing Casey & Associates Clients who recently underwent a three-yearly review of their circumstances. Previously supplied with Life Interest in Property Trust Wills and Property & Financial Affairs Lasting Powers of Attorney by Casey & Associates. Mary had asked me to visit because Jim had very quickly developed advanced dementia since the review. My advice focussed on Mary, who was keen to take care of whatever she needed to on her side of things. Her son and daughter were also present and I recommended some Will amendments to remove reference to her husband to avoid the potential for assets to unnecessarily be assessed for care fees and a Health & Welfare Lasting Power of Attorney to compliment the financial version she already has. My advice has been accepted and instructions have been duly taken. Mary was so pleased Jim had previously signed a Lasting Power of Attorney Property and Financial affairs. Without it the family would have found the current situation even more stressful. Mary and her children are happy everything is now in order.

Client 2

Martin (47) & Janet (45) – unmarried couple. No existing estate planning provision. Janet has two adult children from a previous relationship and solely owns the property the couple live in. I advised the couple to have Wills, with Janet’s Will providing Martin with a life interest in the principal private residence with her children as its ultimate beneficiaries, and full Lasting Powers of Attorney. We also discussed Inheritance Tax which can be more harsh for unmarried couples than married couples. For the moment their assets keep them below the Inheritance Tax band. However, Martin and Janet are now aware of their position and know to contact me if their situation changes. They requested some time to consider their options and have subsequently contacted me to advise that they would like to proceed with my advice and a follow-up meeting has been arranged. They advised that they feel my advice covers everything they thought they needed and was explained in a way that made sense.

Client 3

Barbara (70) – divorced. Has an old Will and an Enduring Power of Attorney. Barbara’s daughter is an existing Casey & Associates Client and wanted me to meet her mother to discuss protecting her home against long-term care fees. I explained how putting her home in to a protective trust could safeguard against this and she decided to proceed. Furthermore, the trust will help Barbara’s family when Barbara passes away because the family home can be sold before Inheritance Tax needs to be paid which means the family will have funds to pay the tax without having to obtain a loan. Barbara also gave me instructions for a pre-paid funeral plan which would take away the financial burden on her family when she passed away. We discussed Lasting Powers of Attorney. Barbara felt she would like more time to consider the benefits of Lasting Powers of Attorney compared to her Enduring Power of Attorney. I handed her a “factsheet” and will contact Barbara in due course regarding this. As a goodwill gesture I included a “refreshed” Will as part of the service and Barbara was very happy with the outcome of our meeting, as was her daughter.

Client 4

Clive (75) & Violet (73) – married couple and existing Casey & Associates Clients, recently underwent a six-yearly review of their circumstances. Previously supplied with Life Interest in Property Trust Wills by Casey & Associates. I recommended full Lasting Powers of Attorney to compliment the Wills they already have. They had already heard that Lasting Powers of Attorney would be a good idea and were therefore pleased to have this view endorsed by me. Clive and Violet liked the fact that I would personally be taking them through the entire process of creating their LPAs from start to finish and this was a big determining factor in them deciding to proceed with issuing me with their instructions. Sadly their only child had recently died and so we talked about how assets could be distributed to their grandchildren. I was able to give Clive and Violet some special technical advice which will ensure that their grandchildren can inherit whilst still making use of the maximum Inheritance Tax allowances. Although Clive and Violet were desperately sad at having lost their only child they were comforted to know that their Estate Plan had been brought “up to date”.

bruce forsyth

Nice to reduce Inheritance Tax, to reduce Inheritance Tax nice!

With inheritance tax (IHT) never far from the headlines, it came even more to the forefront earlier this year with the news that Bruce Forsyth had left his £17m fortune to his wife “to avoid inheritance tax”. Various media outlets reported how Forsythe had exploited a legal loophole in order to avoid the taxman, but did he really?

The reality is that what amounts to lazy journalism sensationalised what was actually a very straightforward estate planning strategy. In a nutshell, an individual can leave their entire estate, regardless of value, to their spouse or civil partner and there is no IHT to pay. This is known as “spousal exemption” and there is no upper limit.

On top of the standard £325,000 nil rate band allowance available to all, an additional allowance was launched earlier this year; the residential nil rate band. This applies where a house is being left to a person’s direct descendants and equates to an additional £100,000 which can be claimed against the value of the house in order to keep it out of IHT calculations. In the same way a deceased’s spouse or civil partner’s unused nil rate band may be claimed against the estate of the second spouse or civil partner upon their death, so can the residential nil rate band also be claimed, giving an overall exemption, by tax year 2020/21 of up to £1 million; £325,000 + £325,000 + £175,000 + £175,000 = £1m

So, whilst the Forsyth family has avoided IHT for now, his wife will have to be creative during her lifetime in order to mitigate the liability her estate faces on her death if she doesn’t act. Again, lazy journalism states she is limited to giving away up to £650,000 free of IHT, but the reality is she can gift away as much of her inheritance as she wishes during the course of her lifetime. This is not thanks to any shady underhanded dealings, but rather taking advantage of the 7-year gift rule available to the common man and the rich and famous alike; give away as much as you like, survive seven years and the asset no longer forms part of your estate. Given her age, it is not unlikely that Bruce Forsyth’s widow will survive long enough for any assets she gifts away to pass to the beneficiaries free of IHT…a real Brucie bonus!

If you would like personalised advice concerning IHT please do not hesitate to contact us so that one of our consultants can visit you to discuss your circumstances. Please telephone 01732 868190 or click here to book an appointment.

Case Study: Mr & Mrs Smith

Mr & Mrs Smith (not their real names) responded to one of our contacts a few months ago and a Casey & Associates consultant visited them at their home. Mr & Mrs Smith are in their sixties and had married each other five years previously. This is the second marriage for each of them. Each first marriage ended in divorce. Mr Smith has four children from his first marriage and Mrs Smith has one child from her first marriage. Mr & Mrs Smith are living in Mrs Smith’s family home whilst Mr Smith’s family home is rented out to provide income in addition to pensions. Mr Smith’s four children get on well with Mrs Smith but, unfortunately, Mrs Smith’s daughter did not get on well with Mr Smith.

Mr & Mrs Smith had brought quite differing amounts of assets to this marriage and were worried about how to distribute everything to the children. They were also concerned that distribution of their assets could be influenced by the order in which they died. There was the added problem that Mrs Smith’s daughter did not get on well with Mr Smith and his children.

We were able to create an Estate Plan based on an in-life trust that would last through to second death together with Wills with trusts that would protect assets between first and second death. Furthermore, working with a specialist partner some funds were invested on a basis which reduced the likely Inheritance Tax liability. Lasting Powers of Attorney were set up but not on “family” lines. Mrs Smith asked for her daughter to be present during one of our planning meetings and it became clear that it had been the uncertainty of succession which had caused the rift between Mrs Smith’s daughter and Mr Smith and his family.

The Estate Plan we created gave both Mr & Mrs Smith and their respective children an agreed succession plan and thus much “Peace of Mind”, reduced their Inheritance Tax liability and helped to improve the relationship between Mrs Smith’s daughter and Mr Smith and his children. This has been a particularly pleasing result.

It is always our aim to meet all the needs of every single one of our clients. For free, no-obligation advice on Will Writing, Estate Planning and more, click here.