Angela Jane News from 2015
MP's Are Saying New IHT Rules Are too Complicated!.
8th December 2015.
The new changes to IHT and property are deemed as too complex . The changes to Inheritance tax and properties that have supposedly been designed to help families keep hold of their main residence, that are due to come into pay in 2017, are according to MP Andrew Tyrie, are unreasonably complicated leaving families confused and uncertain about their future IHT bills.
MP's have written to Chancellor George Osbourne, demanding that he looks at simplifying the changes that are due to come in.
One of the main areas where there is confusion, is the clause that will allow a homeowner to downsize their property, so that elderly people are not rattling around in homes that are too big for them, but also allowing their children to benefit from the proceeds.
DIY - How Many Of Us Get It Wrong?
15th November 2015.
So you decide to purchase a £20 DIY Will from a well known chain of store, £20 you say, absolute bargain, I can do this myself no problem at all.
You may think that this is saving you money, but what if you get it wrong, and your Will is then invalid? The cost could run into thousands of pounds let alone the stress to your beneficiaries and family that you leave behind, at an already emotional and stressful time.
If the Will is found to be invalid, the Estate would be distributed as if there is no Will, and is therefore distributed according to intestacy law.
A DIY Will, cannot take into account all circumstances for all types of people, our lives are far more complex than they were 20 or 30 years ago.
People nowadays can be on second or third time relationships, with children from previous relationships, often DIY Will do not take anything like that into account.
You may not be married, living with a partner.
Do you know the difference between owning your property as Joint Tenants or as Tenants in common, and what that means to your Estate or what would happen upon your death?
Do you own a Business?
What about inheritance tax?
What happens if you have failed to sign your Will? (yes it does happen, I have seen it happen several times, or if you get the wrong person to sign your Will.
Did you know that if you get married, any Will that you had in place before hand is likely to be revoked?
It really is not worth the risk of having a DIY Will.
Living Longer What That Means For Our Will.
18th October 2015
Since the nineteenth century, statistics show that life expectancy has doubled, where as back then the average age for a male to reach was around 40 years, and the average for a woman was 42 years. Since the statistics of 2011, the figures show males on average are living to age 79, and women to age 82.
So what does this mean in relation to Legal Documents such as a Will or Lasting Power of Attorney (LPA's).
First of all because we are living a lot longer, this may have a detrimental impact on the elderly populations financial situation, people are living longer, so their savings have to last longer, thus they have less of an Estate that is going to be left to their children as this potential inheritance is going to be used due to an increased need for finances during a person’s lifetime.
Figures, also show, that over one third of people over the age of 55 years, have not written a Will.
Withe people now living a lot longer, it is really important for people to ensure that they do get a Will in place, and also just as important is having Lasting Powers of Attorney in place.
As People are now spending a longer time in retirement, getting things sorted financially is ever more important.
Online Accounts and Digital Media Protecting Your Accounts After Your Death.
20th September 2015
So what happens to all our online accounts after our death. Do we really know? Do we really care?
How many times do you hear people say, 'my whole life is on my phone'?
I hadn't really though about it until now, I guess I am of the in between age, and although I have caught on to some of the online stuff, such as Facebook, which I hardly use, or LinkedIn which is not up to date, there are so may different online applications and accounts now, that may people especially those who are, I am guessing in their 20's 30's and 40's that have their whole life online.
So what do we need to have in place to protect our accounts and identities once we are gone?
Ideally we need to have something in place, that gives guidance in our Wills to our Executors, with a detailed list with our wishes for each type of account and details where logins and passwords can be located.
Asset Protection Trusts And The Dangers
21st August 2015
I cringe with horror every time I hear someone say they have been advised to look at protecting their home with an Asset Protection Trust.
Transferring your home to someone else, usually your children. We work hard all our lives, our biggest asset is usually our family home and the last thing that we would want is for our children to loose out on their potential inheritance.
The problem is that we are living longer, and the consequences of that, is that we are more likely to suffer from illnesses that need long term care, and especially if our partner passes away before us, then there is a greater possibility that we may need to go into long term residential care.
Asset Protection Trusts, you are in effect giving away your home and depriving yourselves of assets, which the Local Authority Social Services (LASS), do not look at sympathetically if we are in a situation where we need to call upon help with our care in the future.
There are many other problems around giving your home as a gift, including things such as Capital Gains Tax. You may fall out with the person you have given the gift to, (I see rifts everyday between family members involving gifts of property to a child).
Asset Protection Trust should really be avoided completely or approached with extreme care.
The Reasons Why It Is Never Too Early To Give The People You Trust The Power To Act On Your Behalf.
19th August 2015
We don't want to think about what may happen if at some point in the future we were unable to manage our own affairs, as we had lost the mental capacity to do so. We tend to think that it will never happen to us. Unfortunately, if we don't appoint someone to have the power of attorney, if we leave it too late, it could very well mean that at some point in the future, a total stranger will be making decisions for us.
This is a depressing statistic but one worth thinking about: figures from the advice site MyAgeingParent.com show that dementia affects one in three people aged 65 and over at some point.
Your next of kin does not have the automatic right to make decisions on your behalf should you loose the capacity to make decisions yourself.
A Lasting Power of Attorney is a document that can make the difference. If you are not able to make decisions due to illness or having an accident, an LPA allows you to choose someone that you Trust to make decisions on your behalf.
Everyone should have an LPA, it is just as essential to have an LPA as it is to have a Will in place
Research by the Office of the Public Guardian found that less than 50% of people over the age of 45 knew what an LPA was.
Most people tend to think, that an LPA is only set up when it is needed, this is often too late. I have seen so many people whose families are trying to get things sorted out coming to me wanting an LPA set up for their loved one, and I cannot help as the person they are trying to help has already lost the capacity to make decisions for themselves.
It really is essential that people set up LPA's while they have the capacity to do so, well before it is actually needed,
If there is no Lasting Power of Attorney in place, the next stage is usually a relative having to apply to the Court of Protection to be come a deputy so that they can deal with your affairs on your behalf. This is a long and stressful process, not to mention very expensive. It is then the Court of Protection that take control of your affairs.
Contact me with any questions you may have or if you would like more details on how a Lasting Power of Attorney can help your loved ones to help you should you loose capacity in the future.
Depriving Yourself of Assets And The Consequences If You Need Long term Care.
15th August 2015
So What does Deprivation of Assets mean?
Under the new Care Act 2014 which came into force on the 1st April 2015 it states
"that deprivation of assets is where a person has intentionally deprived or
decreased their overall assets in order to reduce the amount they will be
charged towards their care and support".
So what does this actually mean?
That a person has deliberately reduced the value of their assets that they own, so that they can either reduce the amount that they pay towards their care or avoid having to pay any contributions for their care altogether.
If you transfer an asset out of your name the local authority and also the pension services (when you apply for such things as Pension Tax Credits), can look for evidence when assessing you for eligibility for assistance for benefits or help with care fees, of deliberate or intentional deprivation of capital and assets such as property, thus seeming to put your self in a better position when applying for means tested benefits and assistance.
Deprivation of assets covers a whole range of possible things that can be looked at:
* Giving a large lump sum as a gift;
* A sudden substantial increase in expenditure that is out of character;
* Transferring the Title Deeds of your property into someone Else's name or adding someone else onto the title deeds;
* Your Assets put into a Trust that cannot be revoked.
* Selling an asset for a lot less than it is really worth
If you have disposed of or sold an asset, it is up to you to prove that you no longer own the asset, and provide evidence to support the fact.
The local authority can make investigations if they believe that you have deliberately tried to deprive yourself of assets to avoid or reduce the amount that you contribute towards your eligibility for support or care.
The local authority when it believes that a person has transferred an asset to a third party to avoid
or make reduced payments the third party will be liable to pay the local
authority the difference between what it would have charged and did charge
the person receiving care at the time of the means test.
If a person has transferred funds or assets to more than one third party, each of those
people would be liable to pay the local authority the difference that the person disposing of the asset
would have been charged had they kept the asset.
Sad fact over 1.4 million pensioners are not claiming Pension Tax Credits that they are entitled to.
8th August 2015
Over 1.4 million elderly people each year are loosing out on a massive £3.2 billion of pension tax credits that they are perfectly entitled to.
This equates to nearly two out of every five people failing to claim this benefit. Pension Tax Credits tops up your weekly income to £151.20 if you are single person or to £230.85 if you are in a couple.
Some of the reasons that people don't claim, is they don't think they are entitled to anything, or they are too proud, or cannot be bothered with the form filling, but when people are living on the breadline and struggling to make ends meet on the state pension, they really should make the phone call to see if this benefit is available to them.
Being in receipt of Pension Tax Credits then also opens up the door to other things that they will be entitled to, such as, if applying for lasting powers of attorney, they will be exempt from having to pay the registration fees to the Office of the Public Guardian.
Daughter Finally Wins 10 year Battle After Being Disinherited From Mothers Will.
28th July 2015
Heather Ilott from Hertfordshire, who was disinherited from her mother's Will, has been awarded £164,000 from her late mothers Estate. Her mother, Melita Jackson, passed away in 2004, leaving her £486,000 Estate to various charities.
Heather Illot has for the last 10 years been fighting her late mothers Will, and yesterday the court decided that Heather Ilott should receive one third of her late mothers Estate.
Melita Jackson, had never forgiven her daughter now aged 54 year, Heather Ilott, for eloping with her boyfriend when she was 17 years old, Melita Jackson left her daughter out of her Will completely , making it perfectly clear that she did not want her daughter whom she had no contact with since she had eloped from benefiting in anyway from her Estate. Read the full story here.
You are of course able to leave your Estate to whom you like, however under the Inheritance (Provision for Family & Dependants) Act 1975, your children, including adult children have every right to make a claim against a deceased parents Estate.
If you are going to leave a leave a child out of your Will, you need to have a good reason for doing so, backed up with letters held with your Will stating the reasons why, and this does not in any way guarantee that your wishes will be carried through.
Claims against a deceased Estate are messy, cause heartache on all sides, and can cost a lot of money, often eating into the Estate leaving little at the end of it.
Think hard and long if you are contemplating disinheriting a child, is it really worth it?
Cap On Care Fees Shelved or Scrapped?
17th July 2015
It has been announced by the Government that the long awaited Cap to Care Fees, for long term care that was supposedly being introduced in April 2016 has now been delayed for four years as they have deemed it to be "too expensive" according to a letter sent my the MP for Community and Social Care Alistair Burt.
The delay on this cap clearly represents a break from the original Tory manifesto, which originally stated, “We will cap charges for residential social care from April 2016… so that no one has to sell their home". they also stated that this would give people the peace of mind that should long term care be required for such things as dementia, people would be protected from the unlimited costs.
The Government has estimated delaying implementing the Cap, will save them £590m in 2016 to 2017, and a further 2bn until the end of the austerity programme 2019.
People, and families, need to be aware of their choices, so they know what options are available.
A Sunlife Report has concluded that around one in ten people end up in debt and financial hardship due to having to pay for a family member or loved ones funeral.
Even the very basic funerals are costing over £3,500 nowadays.
The report shows that many people are having to pay for funerals on their credit cards, take out loans or even borrowing the money from friends or other family members.
With Funeral costs set to rise even further over the coming years, Sunlife cost of dying report conducted in 2013, estimated that by the year 2029 the average funeral will likely cost over £10,000.
Pre Paid Funeral Plans give people the peace of mind that there is one less thing for their families to have to worry about, at what is already a very stressful and emotional time.
We are sometimes asked by people "what's the difference in the quality of a will" and what they are actually asking is why is there such a variance is price for making a will. Let's face it, you can do it yourself with off the shelf will writing products.
The simple answer is, do you actually want your wishes to be taken into account when you die.
Even large companies with the best intentions can get it wrong which is why we always recommend using a specialist will writer. There was a recent case involving Barclays which has resulted in a compensation claim for hundreds of thousands of pounds, which is still being fought, because of issues with how the property was viewed within the will.
A £90 will has resulted a considerable financial issue at a time when a personal loss is bad enough.