Author Archives: Helen Eynon

Homemade Wills: The Pitfalls!

Everyone knows that most people who died in the UK last year did not have a Will in place. Many people think it’s a good idea to get a pack from a stationery shop, and do it themselves.

Whilst I agree something is better than nothing. Below are some examples I have come across of when DIY WILLS HAVE NOT WORKED!

• Not correctly signed by the Testator/Testatrix.
• Only one witness has signed.
• Will is not witnessed at all.
• Will is not dated.
• Executors have not been appointed.
• The one Executor appointed has died.
• The Estate goes to a person, who has already died.
• The Will is not clear as to what is being given.
• It is unclear who is to benefit.
• A specific property or item gifted no longer exists.

These are just some of the situations I have come across in my years of experience. Many of the above examples mean that the Will is INVALID.

If a Will is INVALID the Estate has to be administered in accordance with the Intestacy Rules.

In some of the above examples the Will may not be completely invalid. However, a Court Order will need to be obtained to sort many of these problems out! This of course results in extra costs and distress for your family.

So evidently a DIY Will is not all it’s cracked up to be! If you want to avoid the problems that a homemade Will can cause, give me a call.

What’s the best time to make a Will?

There is no specific time when you should make a Will, the problem is most put it off until it’s too late!! So many think, oh I will get to it!!

Recently one of the contestants in 70 Degrees North on ITV1 (an extreme competition for celebrities in the Arctic), said on going over a precipice. “Maybe I should have made a Will!” Whilst this is an extreme example, I meet people everyday who say, they want to make a Will but don’t do it!!

The problem is most people are utterly convinced that they will get around to making a Will: when they have time, after they get married, after the divorce comes through, when they have children, when they have more assets.

The statistics however show that 60% die without having a valid Will in place.

Without a Will in place no one is appointed to deal with your assets, and your Estate will have to be administered in accordance with the Intestacy Rules.

The result of you NOT having a Will could mean: that the people you want to get your Estate don’t get it! The people who do get it may not have seen you for years. If you are married it is also likely that part of your Estate will be held on Trust for your children, in other words your assets will not go to your spouse (as most would want)!

So the best time to make a Will is now! Don’t put it off!

Declarations of Trust: Protecting Property Owners

As many people will see from reading my website, Declarations of Trust are used to protect people who buy property. But many people don’t really know much more than that. I have listed out some of the things that can or should be included within a Declaration of Trust:

• If owners of property have put in different amounts when the property is purchased, these sums must always be stated in a Declaration.

• Declarations can confirm that any increase in value of different amounts of investment, will be reflected in the division of “profit” upon sale.

• In some cases not all the owners are listed on the Title Deeds. In such a case a Declaration can state who all the owners of the property are.

• Where there are more than 4 owners, a Declaration will confirm all the owners of the property. This is essential for the protection of any “additional” owners (as only 4 names can be on the Title Deeds).

• Where one owner pays the mortgage this should always be explained, and should be reflected in the final distribution of the net proceeds of sale.

• If there is an agreement that the owners will hold the property in differing proportions, this will be stated.

• As to what will happen to an owner’s share/interest in the property on death, should always be covered in the Declaration.

• Where one buyer wants to sell his/her share/interest in the property an option to purchase for the other owners can be included. I cannot recommend how essential it is to put this framework in place, as it allows for the situation when owners fall out.

• Declarations can detail the procedure should further loans be taken out on the property. If this is desirable all the owners must be notified in writing, and any loan must have the consent of all the owners.

• In cases where additional loans against the equity of the property are to be prohibited. This must be expressed in the Declaration.

• Where a parent is assisting with the property purchase, a separate Loan Agreement should be put in place in relation to the loan.

• Where there is any bank borrowing to fund the purchase. The amount loaned and the banks’ details must always be expressed.

In short a Declaration of Trust is tailored to your own special set of circumstances. This means that no one Declaration is the same as another. Think of it as the ultimate “pre-nuptual”! But rather than organising your assets before marriage. You are ensuring everything is in order before you buy the most substantial asset you will ever own!

The Dilnot Report & Care Funding

The new Dilnot report is a step forward in dealing with the issue of care funding for our ageing population. As it acknowledges having to sell your house to fund your own care is unacceptable to many of us. A cap on funding of £35,000 sounds fair to many.

But and there is a big but, will the government take the report seriously? Or kick the report off into the long green grass? No doubt everyone can remember Cameron saying that the Inheritance Tax Threshold should be £1 million!

The figures within the report indicate that a person needing care (if the report’s findings are implemented) should only have to use 30% of their assets for their care. This would mean that they will be in a position to pass some of their assets onto their families.

The report does not I think take into account that there have always been people who never paid for their care, and never will. Currently the government is trying to get the “workshy” off benefits and into work. If these people do not become part of the workforce, the bill for their care will fall on the rest of us.

I am of the view that if report had come out during the “boom times” it may have received a more positive response. Whilst many organisations who work with the older population thought of the sea-change it represented. Many who deal with funding issues are wondering, was the core proposal affordable?

Having worked in the field of Private Client I have spent my time in putting in place tax efficient legal solutions. Until a decision has been made as to whether the Dilnot Report presents a feasible way forward. I am of the view that it is the responsibility of us all to try and put in place our own “safety net”.

Statutory Wills & The Court of Protection

On the loss of capacity of a person, not only can that person’s affairs be looked after by their Deputy, but if necessary a new Will can be created!

A Statutory Will can be put in place by the appointed Deputy by making an application to the Court of Protection. The reason this can be done is that this is classed by the Court of Protection as being in the persons’ “best interests” (Mental Capacity Act 2005). This means assets can go to whom the person would have wanted had he/she had the capacity to do the Will him/herself.

Either an updated Will can be put in place (where the current Will is old and outdated), or a completely new Will can be created. By making a new Will through the Court of Protection the problems associated with Intestacy (where there is no valid Will on death) are avoided.

The application submitted to the Court of Protection includes details about the person’s family (including a family tree), their assets, copies of previous documents and statements as to what would be in the best interests of the person. This is so that the Court can ascertain the following:
• The extent of the person’s Estate.
• Who would have benefitted under the Intestacy Rules.
• Who benefitted under a previous Will or Codicil.
• Which family members would expect to be included in a new Will.
• The person’s own views, wishes and beliefs.

To make the application itself the appointed Deputy must try and ascertain the person’s own wishes. It should be noted that under the Mental Capacity Act 2005, the person should be made to understand as much as possible the application being made on their behalf.

Please be aware that this area of law is complex, and professional advice should always be obtained. If you are a Deputy and feel that putting a Will in place is necessary, please contact me.

Guidance Series: Lasting Powers of Attorney

1. MONEY – DON’T MIX FUNDS!

Being an attorney can be quite onerous so I am doing a guidance series all about Lasting & Enduring Powers of Attorney. This being the first one I am covering the cardinal rule about money.

Firstly what do I mean about money?

When I talk about money or funds, I mean all types of liquid assets of the donor. This includes all money held in banks and building societies whether in current, deposit or ISA accounts. I also include all types of investments, for example bonds, National Savings, shares and portfolios.

In basic terms if the asset can be easily sold or liquidated it is counted as money/funds of the donor. When dealing with the donor’s funds, it is imperative that an attorney ensures that they are kept completely separate from his/her own.

Whilst it is OK to change investments, for example switch a bank account to another one offering better interest rates. AN ATTORNEY SHOULD NEVER EVER PUT THE DONOR’S MONEY INTO HIS/HER OWN ACCOUNT.

I also don’t think that JOINT ACCOUNTS are a good idea either. As it gets difficult to work out what percentage of the money is the donor’s and which is the attorney’s. This can also cause arguments when there is more than one attorney.

If you are an attorney and need advice on this topic, please contact me.

Wills & Letters of Wishes

Many people ask me what are Letters of Wishes? In short they are letters held with Wills which are used to explain or expand on what has been said in a Will.

Letters of Wishes can be used to give additional directions to your Executors, for example funeral wishes and details about your funeral service.

When a trust has been set up in a Will, additional instructions and guidance can be given to your Trustees. The family often find it invaluable to have a Letter of Wishes, when dealing with Property and Discretionary Trusts.

Appointing Guardians for minor children is one of the most difficult decisions. A Letter of Wishes can explain to the family the reasons behind the decision as to why the Guardians were appointed. The Letter can also give added direction to the Guardians themselves.

One of the issues that most concerns my clients is what to do with personal possessions. So as to not cause confusion by specifying the items in the Will itself, I recommend that there is reference in the Will to the Letter of Wishes. This means that the “letter” can be updated, so clients can change their mind or feel free to give away possessions during their lifetime.

Updating your Will, and putting in place a Letter of Wishes at the same time can ensure that your family know your true feelings and wishes upon your death.

Registration of Lasting Powers of Attorney!!

Why this is ESSENTIAL!!

The most important point about Lasting Powers of Attorney (LPAs) is that the documents cannot be used by the attorneys until the document/s have been registered with the Office of the Public Guardian!

I have recently spoken to a couple of people whose parents had drawn up LPAs but NOT gone ahead to register!

One person had been advised that registration was at the time “unnecessary” as the donor (the giver of the power) still had capacity. That it was fine to wait to a later date to register the document. In other words that the registration should only be done when the person was starting to lose capacity!

Whilst you are not “legally required” to register straight away, this advice is highly dangerous. The reason to register as soon as an LPA is put in place is twofold:

• Any problems with the document can be sorted out. It’s common knowledge that LPAs are frequently “rejected” by the Office of Public Guardian on the slightest of grounds. This may involve some of the documents having to be re-signed and re-submitted.

• If there are objections to the LPA from a family member, this too can be dealt with.
The essential point is that a professional cannot know until the document has been sent for registration whether or not an issue will crop up. Only by going for registration straight away (when the donor is mentally capable), can all such issues be easily sorted out.

If you wait to register at a later date, it is possible that a problem may occur which is unforeseen. I have heard of a case when an LPA was not registered straight away, and when an application to register was made the document was rejected. As the time-lag had been nearly a year, the donor of the power had lost capacity. The upshot was that the LPA could NOT be registered, and an application for a costly Deputyship had to be made.