Why your children may not inherit what it says in your Will!

What goes hand in hand with your financial advice that your client will be indebted to you for arranging for them?

Estate Planning! – Your clients will forever be grateful that not only have you sorted out their long term financial plan but you also helped them ensure that their assets are protected when the they pass from this world.

There are so many different facets to Estate Planning that clients just have not thought about.

Why would your clients want to invest and save all their lives (with your help) and then have 40% of it to go into inheritance tax and the rest of it divided amongst people they didn’t intend to.

Let me tell you of a horror story. Mr. Thrifty married to Mrs. Thrifty hopes that one day his only child, Lucy will inherit his £1m home. You have advised them to get a mirror Will that they obtained from the Internet.

However, Mr. Thrifty dies a year later in an accident. The home transfers to Mrs. Thrifty who marries her tennis coach, Mr. Opportunity a year later. They have two children. She makes a new will, leaving everything to her children.

Unfortunately they divorce ten years later, and Mr. Opportunity receives half the value of the house (£500,000) in the divorce settlement. Mrs. Thrifty dies in shock and the rest of the estate is divided amongst the three children. Lucy receives £166,000.

This is not what Mr. Thrifty had intended when he was setting out his long-term financial plan with you.

And the moral of this story is…

If there is a lesson to be learned from the above tale, it is this:

It is a good investment to obtain sound Estate Planning advice.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

8 reasons why a DIY Will is the cheapest option!

Wills / By Nadeem Afzal

A quick Google search will provide you with many options for this and a ‘DIY’ or “home-made or Online Wills” Will can seem like a simple and inexpensive solution. After all, you can purchase a DIY Will kit for as little as a £20 from WHSmith!

The pitfalls for a DIY Will are:-

1. Wills not witnessed correctly – this renders a Will completely invalid and your wishes won’t be carried out. You will be deemed to have died without a Will. I have seen, where the ‘wrong’ people witness a Will, making the intentions of the Will void.

2. The Will not actually covering all the assets in the estate – this creates a problem because the parts of the estate not covered pass as though you didn’t have a Will and could pass to someone you didn’t intend it to.

3. Assets being incorrectly described, such as “my Prudential Insurance Policy”, when in fact the policy was an “assurance” policy or “my Midland bank account” when The Midland Bank had long since become part of HSBC. Such gifts could fail and your intended beneficiary may not receive them. What if the bank you have your money in now, changes it’s name in twenty years time.

4. No consideration of what happens if a beneficiary dies before you – Wording used such as “I give £2,000 to Jane William” could leave confusion. Was the intention Jane should receive £2,000 if she was alive at your death only or did you want the gift to pass to her family if she died before you?

5. Later amendments written on top of the original Will – such amendments may not be valid.

6. The consequences of nursing home care fees or inheritance tax not being considered – meaning your estate could be eroded to pay for care or a larger inheritance tax bill might be payable by your family.

7. Considering who is to look after your young children if you were to die – this is a complicated area, who are you going to appoint as a guardian, what will there legal duties or what consideration will you give if they can no longer care for your children. What are the legal consequences for when your children can inherit your estate.

8. Ring fencing your estate so your children are guaranteed to inherit instead of it being diluted by your spouse’s new partner or your spouse’s future children – did you know most people leave their estate to their spouse with the intention of it being inherited by their children. What if your spouse was to get married again and leaves everything to his/her new spouse. What if your spouse has more children? Your estate will be diluted and your children receive a fraction of what your estate.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

Why tax and social services are among the 7 reasons you should make a will today!

Taxes, Wills / By Nadeem Afzal

It is relatively easy to make a Will – and it will ensure your family is saved from unnecessary anxiety at an already distressful time.

Below are 7 reasons why your family will thank you for making a Will.

1. How Much Inheritance Tax Can You Save?

You can easily ensure that no IHT is paid on your death and that it is deferred to the death of your spouse, allowing your family to plan their wealth planning with this in mind.

2. Do You Have Young Children?

If you have young children and both you and your partner were to pass away, you can not determine who will look after your children and how they will be brought up and at what age they inherit your estate. The Social Services will get involved and this will inevitably cause unnecessary trauma to your children.

3. Do You Want To Avoid A Dispute?

A Will makes it much easier for your family or friends to sort everything out when you die – without a Will the process can be more time consuming and stressful. This will also mean that solicitors and the courts will have to get involved.

4. What Happens If You Don’t Write a Will?

If you don’t write a Will, everything you own will be shared out in a standard way defined by the law – which most likely isn’t the way you might wish. You may not have thought of this, but your siblings could end up with part of your Estate.

5. Is Your Family Financially Secure?

A Will is especially important if you have children or other family who depend on you financially, or if you want to leave something to people outside your immediate family.

6. Are You Married or Single?

If you are unmarried, your partner will receive none of your estate, this could mean them becoming homeless and without any financial support.

7. Ways To Eliminate The Tax!

There are many ways in which you can eliminate IHT tax, which you can do in your lifetime and still maintain control of your assets.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

Five reasons why you must write your Will

Wills / By Nadeem Afzal

It is relatively easy to make a Will – and it will ensure your family is saved from unnecessary anxiety at an already distressful time.

Here are the 5 reasons to Write your Will

A Will makes it much easier for your family or friends to sort everything out when you die – without a Will the process can be more time consuming and stressful.

If you don’t write a Will, everything you own will be shared out in a standard way defined by the law – which most likely isn’t the way you might wish.

A Will can help reduce the amount of Inheritance Tax that may be payable on the value of the property and money you leave behind.

A Will is especially important if you have children or other family who depend on you financially, or if you want to leave something to people outside your immediate family.

If you have young children, and a large estate, then your children will end up potentially paying Inheritance Tax or your spouse will have to pay legal fees to make an application to the courts to have this sorted out.

It is a good investment to obtain sound Estate Planning advice.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

How you can increase your ISA allowance

financial security, Wills / By Nadeem Afzal

Did you know that you can inherit your partner’s ISA tax free allowance savings?

The new rules mean ISA assets can now be passed on to spouses or civil partners and retain their tax-friendly status.

THE REASON FOR THE CHANGE?

Under the previous system, when someone died, any savings held in an ISA automatically lost their tax-free status. This meant that the surviving partner would have to start paying tax on any returns or income earned from it, which could add up to a significant sum if the ISA holder had been saving for many years.

The tax system was inherently unfair, particularly given the fact that couples tend to save from joint incomes – they’d have to pay tax on money they thought was protected, and thousands of people were caught by these unexpected tax charges every year.

PASS ON THE BENEFITS

The rules mean that if an ISA holder dies, the surviving spouse or civil partner will be able to inherit the ISA and retain its tax benefits. This is in the form of an additional allowance – the surviving partner is given an ‘additional permitted subscription’ (APS), a one-off ISA allowance that’s equal to the value of the ISA at the date of the holder’s death, which won’t be counted against the normal ISA subscription limit but will instead be added on to the survivor’s own ISA limit.

In other words, you’ll be entitled to an additional allowance that would cover the value of your partner’s savings as well as your own. For example, if your partner had £50,000 in ISA savings, your ISA allowance for the year would be £65,240 (the value of your partner’s savings and your own ISA allowance for the 2016/17 tax year, which stands at £15,240).

Essentially, the rules mean that the tax-efficiency of the ISA won’t be lost, and that you’ll be able to benefit from the money that could well have been saved together. The changes have been specifically designed to ensure that bereaved individuals will be able to enjoy the tax advantages they had previously shared with their partner, offering more flexibility and a much fairer outcome.

There are approximately 150,000 married ISA holders die each year, so these changes will benefit spouses or civil partners by increasing the amount that they can save by offering the tax advantages in an ISA wrapper. Surviving partners could have lost out significantly under the previous rules whereby investments held by deceased ISA savers lost their tax-free status. Allowing ISA savings to be transferable will enhance flexibility and will act as a further incentive to save within these vehicles.

BRIEF LOOK AT THE RULES

• Eligibility: Anyone whose spouse/civil partner died on or after 3 December 2014 is eligible, and the APS could have been claimed since the start of the 2015/16 tax year.

• Pot size: The rules apply irrespective of the size of the deceased’s ISA pots. No matter how much they had saved in an ISA, you’ll have that amount as an additional allowance. In the event that more than one ISA was held by your partner, the pots will be combined to give an overall additional subscription amount that you can claim.

• Subscriptions: APS allowance subscriptions (referred to as payments) can be made to a cash ISA and/or a stocks & shares ISA, either with the deceased’s ISA provider or with an alternative that will accept APS subscriptions (not all will). Some ISA providers will allow payments to be made in instalments whereas others only allow a lump sum, so make sure to check.

• Time limit: Chances are, arranging your new allowance won’t be at the forefront of your mind on the death of your partner. In most cases, at least for subscriptions made in cash, the allowance is available for three years after the date of death.

• Process: ISA providers will require key information and personal details from the spouse/civil partner to open a qualifying ISA, and they’ll also require an application form to use the APS allowance.

• Transfers: The APS allowance can be transferred to another ISA provider, subject to the new provider’s acceptance. It can only be transferred once and only where no subscriptions have been made under the allowance. But, after an APS allowance payment has been made, the cash and/or investments related to that subscription can be transferred to another ISA.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

Why choosing your executors is so important

Wills / By Nadeem Afzal

What does an executor do?

Your executor takes on the job of carrying out the instructions you leave in your Will when you die. It can be a difficult job even if your instructions and your property are quite simple – it’s not unusual for the process to take several months.

The job of an executor is sometimes complicated. For example they might have to decide when to sell your property so that the people who inherit the proceeds get the most money and make sure the right amount of Inheritance Tax, Capital Gains Tax or Income Tax gets paid.

Who can be an executor of a Will?

Anyone aged 18 or above can be an executor of your will. There’s no rule against people named in your Will as beneficiaries being your executors. In fact this is very common.

Many people choose their spouse or civil partner or their children to be an executor. But that doesn’t mean they have to write them out of the Will.

Up to four executors can act at a time, but they all have to act jointly so it might not be practical to appoint that many people.

It’s a good idea, though, to choose two executors in case one of them dies before you do. For example, you might choose one family member and one professional, like a solicitor or accountant.

Professional executors tend to charge, but it can be helpful to have someone involved with specialist knowledge. You can appoint substitute executors to cover the situation if your first choice dies before you.

What makes a good executor?

If you leave something to a person in your Will, they can still be your executor – but they can’t be one of your Will’s official witnesses.

Above all you must choose somebody you trust. It’s going to be up to them to follow the instructions in your Will and to find fair solutions to any disagreements.

If your executor is good at paperwork and managing legal issues it will be helpful. And if you choose more than one executor, they may decide to divide up the work.

For example, if you appoint one of your children and a solicitor as your executors, they may decide that your child might be the best person to deal sensitively with other family members, while the solicitor handles the tax and legal work.

Family members as executors

If there’s someone in your family who you think will handle the job well, it can be a good idea to have them as an executor. For example, it’s very common to name one of your children, a niece or nephew or an adult grandchild.

Make sure you ask if they’re happy to do the job before you write your Will, though – if they say no, you’ll have to get your Will changed.

Think carefully before choosing your husband, wife or partner as your only executor. They’ll be dealing with your death, and by naming somebody else to be an executor with your husband, wife or partner, you can at least take the burden of the paperwork off their shoulders.

Solicitors, banks and accountants as executors

Choosing a solicitor as one of your executors makes a lot of sense, especially if sorting out your things is likely to be complicated – they’re experienced at the job and know their way around legal, tax and property issues.

If the financial side of your Will is especially complicated, it could be a good idea to choose a bank or accountant as one of your executors.

Of course, these professional specialists will charge you for their work.

This happens in one of two ways:

by sending a bill for their time when your things have all been sorted out
by taking a share of the total value of your estate – this will be written into your will.

Make sure you understand how your solicitor, bank or accountant will charge for being an executor and how much each option will cost before you commit yourself.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

Wife begs a judge to turn off ex-soldier’s life support machine

Wills / By Nadeem Afzal

‘Please let my husband die’: Wife begs a judge to turn off ex-soldier’s life support machine a year after he suffered severe brain injury in motorbike

A judge has been asked to decide whether doctors should stop providing life-support treatment to a soldier-turned-policeman who was left in a coma after a motorcycle accident.

Gulf War veteran Paul Briggs, 43, suffered a severe brain injury in a crash while serving with Merseyside Police in July 2015.

His wife Lindsey wants his life-sustaining treatment to stop but doctors disagree.

Mr Justice Charles is expected to make a ruling after a hearing in the Court of Protection – where judges consider issues relating to people who lack the mental capacity to take decisions – in the near future.

Many people genuinely believe that a Lasting Power of Attorney (LPA) is something that can be left until we get older or when the circumstances arise.

Unfortunately life can be unkind, and should an accident happen or illness takes place, an LPA could make life much easier at a difficult time.

So, what happens if you do not have an LPA in place and the worst should happen? As in the case of Paul Briggs, his wife now has to apply to court to be granted permission to make such decisions. This will not only take months to be resolved but will also cost in excess of £5000.

There are two types of LPA.

Lasting Power of Attorney for financial decisions can be used when someone still has mental capacity. The attorney can make decisions on matters such as:

• Buying, selling and making repairs to property

• Paying the mortgage and bills

• Investing money

Lasting Power of Attorney for health and care decisions can be used when someone loses capacity. In this instance the attorney can make decisions on:

• Where you should live

• Your medical care and what you should eat

• What activities you should take part in

Ensuring the right person is in place when the need arises is vital for your peace of mind. More importantly, it is a peace of mind for your family who will have to go through the turmoil of getting help at a time when life should be made easier for them.

It is a harrowing experience for the family when a person who has become unexpectedly incapacitated, and they are left helpless. The family wont be able to disagree with medical decisions taken by doctors. Further, the family maybe left in financial difficulties as bank accounts are frozen.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

Why buying through a Trust could save you £260,000 and leave you in control

Wills / By Nadeem Afzal

Wealthy families will be able to buy properties for their offspring and avoid the higher rates of stamp duty thanks to a loophole involving the use of trusts.

It is being reported that there is a surge of interest from people seeking advice on how to use the strategy.

The tactic will suit those who previously would have bought a buy-to-let in their own name but earmarked it to give to their child in future.

By buying property through a trust, the taxman will treat the trust’s beneficiary as the property buyer. Provided they don’t own another property, the lower rates would apply.

Tax increase like this invariably lead to behavioural changes among taxpayers.

There are very good reasons to use trusts when buying property for children. The stamp duty changes mean trusts could make more sense.

The Government has made it clear that it doesn’t want people doing buy-to-let. Since buy-to-let was a major way in which families bought homes for their children, they need to find other routes.

There could be pitfalls however, in the form of inheritance tax charges or other knock-on taxes.

You need to be clear that any stamp duty saving isn’t outweighed by other tax consequences.

The following explains how the trust concept would work.

Buying property for adult children

Where children are over 18 the simplest option is to give the child the money with which to buy the property.

That way, provided this is their only property, they will payer the lower stamp duty rates.

But not all families are keen to entrust young adults with full responsibility for valuable property.

Where the parent wants to keep control a form of trust would need to be used where typically the child gets to keep the income, but has no power over the property itself. That remains with the trustees.

I would advise parents to use trusts if they want to keep control of assets in any case.

In the common scenario where parents have adult children at university, and where there is a wish to buy-to-let they could use a bare trust or set up a formal trust with the adult child as a “life tenant”.

By that means the parents can keep control of the property.

But it is tax-efficient from a capital gains perspective, because if it is the main home of the child it will qualify for their capital gains tax relief.

But it won’t work where your children are under 18

In the original notes no reference was made to the age of the trust beneficiaries.

But when the detail was published it appears HMRC saw the possible use of this and sought to close the loophole where younger children are concerned.

The legislation makes a special case for trust beneficiaries who are minors – it confirmed that where the parents are trustees and own other property, the higher rates would apply.

Minors cannot own property directly, so some form of trust is a necessity if a child under 18 – rather than their parents – is to own it.

There is thus an incentive to wait until the child is over 18 and set up a trust then.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

Why your children may never inherit your wealth!

Wills / By Nadeem Afzal

Let me tell you of a horror story. Mr. Thrifty married to Mrs. Thrifty has ensured that he has paid off his mortgage on his £1m home (with your help) and hopes that one day his daughter Lucy will inherit the home. You have advised them to get a mirror Will and they decided to get a DIY Will.

This is not what Mr. Thrifty had intended when he was setting out his long-term financial plan.

And the moral of this story is…

If there is a lesson to be learned from the above tale, it is this:

It is a good investment to obtain sound Estate Planning advice.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

Your share of the house is at risk despite you writing a Will

financial security, Wills / By Nadeem Afzal

If you own a property with your partner or wife, it is important to know how it is being ‘owned’ at the Land Registry. Is it being held as Joint Tenants or Tenants In Common.

For instance, if you are owning the property as Joint Tenants and one of you dies, then the other person will become the owner of the property regardless of what it says in your Will.

When property is owned jointly by 2 or more people they are said to own the property either as “joint tenants” or as “tenants in common”.

How do I know whether I am a joint tenant or a tenant in common?

If you are unsure whether you own property as joint tenants or as tenants in common, if the property is registered with the Land Registry, as most properties are these days, confirmation can be obtained by obtaining “office copies” of the register from the Land Registry. If the property is held as tenants in common the office copies will contain what is known as a “Form A restriction” which reads as follows:

“No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court”.

The title documents relating to the property will also record whether the property was purchased or transferred to the co-owners as joint tenants or tenants in common. However, the manner in which the property is owned may have changed since the title documents were prepared.

For this reason it is usually necessary, in the case of registered property, to obtain clarification by obtaining office copies from the Land Registry.

What happens when one of the tenants in common dies?

Where property is owned by tenants in common each co-owner is free to leave his or her share of the property to who ever they wish when they die. If they do not make a will their share in the property will pass to their relatives in accordance with the rules of intestacy.

This is in contrast to the position relating to joint tenants where their share in the property passes automatically to the other joint tenant or tenants upon their death.

From an inheritance point of view is a tenancy in common better than a joint tenancy?

The question as to whether a tenancy in common is better than a joint tenancy, from an inheritance point of view, will depend upon the circumstances of each individual.

Unmarried couples may, for example, prefer to hold property as joint tenants to ensure that if one of the parties dies the surviving party will inherit the deceased’s share in the property.

Please contact me on [email protected] or 0207 041 6069 to find out how I can best help you protect your family and your assets.

Wills

Why your children may not inherit what it says in your Will!

What goes hand in hand with your financial advice that your client will be indebted to you for arranging for them?

8 reasons why a DIY Will is the cheapest option!

The pitfalls for a DIY Will are:-

Why tax and social services are among the 7 reasons you should make a will today!

1. How Much Inheritance Tax Can You Save?

2. Do You Have Young Children?

3. Do You Want To Avoid A Dispute?

4. What Happens If You Don’t Write a Will?

5. Is Your Family Financially Secure?

6. Are You Married or Single?

7. Ways To Eliminate The Tax!

Five reasons why you must write your Will

Here are the 5 reasons to Write your Will

How you can increase your ISA allowance

THE REASON FOR THE CHANGE?

PASS ON THE BENEFITS

BRIEF LOOK AT THE RULES

Why choosing your executors is so important

What does an executor do?

Who can be an executor of a Will?

What makes a good executor?

Family members as executors

Solicitors, banks and accountants as executors

Wife begs a judge to turn off ex-soldier’s life support machine

‘Please let my husband die’: Wife begs a judge to turn off ex-soldier’s life support machine a year after he suffered severe brain injury in motorbike

Why buying through a Trust could save you £260,000 and leave you in control

Buying property for adult children

But it won’t work where your children are under 18

Why your children may never inherit your wealth!

And the moral of this story is…

Get in touch

Please fill in the form below and I will get in touch with you today

Get in touch

Please fill in the form below and I will get in touch with you today