As we welcome in 2018 we take a look back at the news and information Flackwoods bought you in 2017. This ranged from Wills and Power of Attorney to passing on the family business and inheritance tax.
Here at Flackwoods we advise and write Wills for many of our clients. We recommend that these are reviewed every five years or after a major life change such as marriage or divorce. We can add a Codicil to your existing Will however, if there are major changes a new Will is required. When you review your Will you need to consider if changes are required to:
- Beneficiaries including any charities
- Guardians for children or grandchildren
One of our 2017 articles highlighted what would happen if there is no Will in place when someone passes away. There are a strict set of rules in place in these circumstances, called the Rules of Intestacy. Under these rules, only married and civil partners and some other close relatives can inherit from the estate. Unmarried partners, or those not in a civil partnership, relations by marriage, friends and carers would not benefit. Many people assume that as they are living together their partner would receive the estate but with no Will in place this is not the case. If there are no surviving relatives then the estate passes to The Crown and is dealt with by the Treasury.
The Role of Executor
We also looked at the role of an executor this year as only a fifth of people are told they are an executor for someone before the person passes away. This is usually done once the Will has been drawn up and it is really too late to say no. If you are appointed as an executor then you may need to apply for probate and will need to carry out the wishes contained in the will, finalising the estate. This can be a complex process and we are here to help with this, offering 30 minutes free advice to new clients.
During the year, proposed changes to probate fees were postponed due to the General Election taking place. These changes looked to move from the current flat system of fees to a new tiered system under which many would pay substantially higher probate fees. These changes were not resurrected in the Autumn Budget but we will keep a close eye on this as they may remerge.
We did however see changes to Inheritance Tax as part of the Conservatives election manifesto, although not as sweeping as some thought they would be. A new residential nil-rate band was introduced which can be used when someone’s house (which they have lived in at some point) passes to a direct descendant. This new band helps reduce the liability for Inheritance Tax and with careful planning you can now leave more to your beneficiaries. The band is currently £100,000 for the 2017/2018 tax year and will increase for the next three years by set amounts. After this it will increase by the Consumer Price Index.
Powers of Attorney
Flackwoods have also been advising on many Powers of Attorney during 2017 as people are realising the importance of putting these in place before they are required. There are three types of Power of Attorney;
- Ordinary; you have the mental capacity to look after your financial affairs but want someone else to manage this on your behalf e.g. go the bank for you
- Lasting; you do not have the mental capacity to deal with your affairs and your nominee manages these for you. You can have a Lasting Power of Attorney for your healthcare and another for your financial affairs.
- Enduring; these were replaced by Lasting Powers of Attorney but old signed ones should still be valid.
If there is no Power of Attorney in place and you cannot look after your affairs then relatives (perhaps not those you would have chosen!) can apply for deputyship via the Court of Protection. This can take time and during this process your bank accounts may be frozen leaving you in financial difficulty.
We recommend that everyone over the age of 18 set up a Power of Attorney as you never know when this will be required. They are not just for the elderly but also for those who have been in an accident or who are suffering from an illness. We offer 30 minutes free advice to new clients if you would like to come in and discuss your requirements.
Passing on the family business
Perhaps an issue to look at in 2018 if you run your own business would be succession planning for the business. It is important to take professional advice if you are planning on passing on the family business and keeping it in the family. We would recommend you talk to those involved about your succession plans and review your business arrangements and shareholder agreements. You need to consider a Power of Attorney and perhaps a discretionary trust. When looking at who will inherit the company you may need a professional valuation of the business by an accountant. Flackwoods have extensive experience of this type of planning if you would like some advice.
2017 has been a busy year for Flackwoods and we wonder what 2018 will bring. Whatever happens in terms of legislation changes we will keep you up to date and informed. We look forward to working with many of you in 2018.
We specialise in legal work including Wills, Trusts, Bereavement, Probate, Powers of Attorney, Tax Planning and Care of the Elderly. Please call us on 01403 738777 or email firstname.lastname@example.org for help and advice with any of these matters.