We are proud to offer estate administration (professional executor) services for no more than 1.5% of the estate’s value – that’s the very lowest end of the scale flagged up in the OFT’s consumer guidelines. We don’t believe that families and friends should lose out on the value of their loved-one’s estate at what is already a difficult time.

Chris Dingley is Co-Director of Collective Legal Solutions, our trusted partners for estate administration. He explains that we charge a maximum of 1.5% of the estate’s value when acting as probate – the lowest end of the OFT’s scale.. “When we act as the professional executor administering an estate, we typically charge 1% or less depending on the value of the estate,” he says, “but we never charge more than 1.5 per cent of the estate’s worth. This is the lowest end of the price scale according to the OFT. Not surprisingly, our average charge for probate services is less than £2,100, compared to the minimum price of £3,400 quoted by the OFT.”

We work with Collective Legal Solutions, who are experts in the field of inheritance planning and wealth protection.  They provide a depth of specialist expertise ranging from will-writing, powers of attorney and probate, to trust funds, estate planning and chartered tax advice.

Want to see the OFT’s consumer guidelines for yourself? Take a look at  http://www.consumerdirect.gov.uk/before_you_buy/thinking_about/Will_writing/

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Just like with any other purchase, shopping around for will-writing and probate services can save you money, and new guidelines from the Office of Fair Trading (OFT) demonstrate how. The guidelines help protect consumers as they seek will-writing and probate services. Estate Legacy Services and our partners Collective Legal Solutions welcome the OFT’s advice.

The guidance has been introduced to prevent consumers from losing money during what could be one of the most important (and potentially confusing) legal purchases of their life. The OFT estimates that failure to shop around when choosing will-writing and probate services is costing consumers around £40 million a year.

£40m a year lost by not choosing estate services wisely 

As the OFT guidelines point out, the costs for a professional executor to administer an estate (probate) vary considerably, from £3,400 at the lower end of the scale up to £9,000 for an average estate. The cost of probate is usually between 1.5%- 4% of the estate’s total value. The difference between 1.5% and 4% doesn’t sound much but if the estate is sizeable, this could mean hundreds of thousands of pounds.  

Chris Dingley is Co-Director of Collective Legal Solutions, our trusted partners who are experts in the field of inheritance planning and wealth protection. Like us, he welcomes the OFT’s consumer guidelines. “The new guidelines reflect the values, ethos and working practices that we have always adhered to,” he says. “We whole-heartedly support the OFT’s efforts to make charges for probate services both completely transparent and fair, and we urge consumers to act on the OFT’s good advice by shopping around.”

The advice from the OFT (and from us) is clear: do shop around when looking for will-writing, powers of attorney, probate, trust funds, estate planning or chartered tax advice services. You could be one of the millions of Britons saving money by choosing wisely.

Take a look at the OFT guidelines at http://www.consumerdirect.gov.uk/before_you_buy/thinking_about/Will_writing/

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Do you have a Lasting Power of Attorney? Do your parents? It really is an important legal document to have, as this story (originally in the Daily Mail) http://www.dailymail.co.uk/money/article-1269290/Lawyers-charged-frail-Alzheimers-couple-pound-44-400.html?printingPage=true) shows.

After Feliks and Rosemary Zakrzewski developed Alzheimer’s disease in 2005, they went to live with their daughter. But that didn’t matter to the Court of Protection. Because they had no Power of Attorney, lawyers were instructed (by the Court of Protection) to look after their finances. The “deputy”, as lawyers are referred to in these instances, charged an incredible £44,400 in fees.

The Zakrewskis’ family could do nothing as the case unfolded, because deputies are only answerable to the client and, in this case, the client was the couple themselves, both of whom had Alzheimer’s and didn’t understand. The solicitor in this case, the Daily Mail reports, ran up charges of just under £19,000 in ten months (charging £200 an hour) and gave the couple’s daughter £70 a week to pay for living costs. After ten months, the couple’s daughter asked the Office of the Public Guardian (which oversees deputies), to look into the case. Deputies’ fees are assessed by the Supreme Court Costs Office.  Guidance on Court of Protection costs states that general management costs are ‘unlikely to exceed’ £3,000 a year but it costs more than £1,000 just to have a deputy appointed, and then there will be annual charges.

What’s the best way to avoid such a nightmare happening within your family?

Get a Lasting Power of Attorney drawn up. We can do it for you, guiding you through the process and explaining it all in plain English. Lasting Power of Attorney can refer to your finances or to your welfare, and either type will give you peace of mind for the future. You’ll know that control of your assets and affairs will remain within a group of people of your choosing.

Find read more about the Court of Protection, go to www.thisismoney.co.uk/court

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We thought it might be useful to post some of the more common questions we’re asked. Sometimes our answers aren’t what the client expected! If you have any questions or queries about will-writing, lasting power of attorney or other legal matters, get in touch. There’s no such thing as a silly question, we promise!

Q I’ve already got a Will but I’m getting married next Summer. Should I get the Will rewritten?

A Yes, definitely. Getting married will revoke your existing Will (unless the Will was made in contemplation of the marriage – but this is unusual). 

Q I am in a Civil Partnership but I’m not sure how the law applies to me? Is it the same as for married couples?

A Absolutely. Civil Partners and Civil Partnerships are treated in exactly the same way as married couples. It’s still important to make a Will!

Q I don’t see why I need to make a Will at all. I’m married, so surely everything would go straight to my husband (and he’d take care of our small children)?

A It’s not that simple. If you die without having made a Will, you die “intestate” and Intestacy Rules will govern who gets what (and in what proportion). Your husband would be entitled to your personal effects and the first £250,000 of your estate. The remainder of your estate would be split into two funds. Your husband would receive the interest on one of the funds (this fund will pass to your children upon his death) and your children will receive the remaining fund on turning 18.

Q I’m sorry to say I’m getting divorced. I guess I need to change my Will?

A Yes, you do. Once your divorce comes through, any gift to a spouse will be automatically revoked. This is the same for civil partnerships.  

Q I’m worried about what would happen if both my wife and I died. Can I say in my Will who should look after my children if this happened?

A Yes, you use your Will to name Guardians to look after your children should both your spouse and yourself die. It should be noted that these appointments would only come into effect on the death of both you and your spouse or civil partner.

Q Can a beneficiary of my Will also be an Executor?

A There’s no reason why not, but people often find it better to use a professional Executor. A professional Executor has the legal expertise that a beneficiary may be lacking, and your family may find it reassuring to know that your wishes are going to be carried out properly, promptly and tax efficiently. It’s not a legal requirement to use a professional Executor, though.

Q I’m not sure I understand inheritance tax. Can you explain?

A Inheritance Tax is only payable on estates which exceed the individual Inheritance Tax allowance (currently £325,000). If the allowance is not used in full on your death, the unused proportion can be carried forward to use on the death of your spouse or civil partner. The allowance carried forward is applied at the increased rate applicable at the time of their death.

Be aware that all gifts (money, property, land, investments etc) between spouses or civil partners are exempt from inheritance tax, as are charitable and other types of gift. We can advise you on exactly how this applies to your circumstances.

Q I have a child with special needs and I’m worried they might lose their entitlement to means tested benefits. How can I make sure they don’t?

A Estate Legacy Services will be able to give full advice on how to protect any child’s inheritance, including telling you best type of trust for you and your child. We will also ensure that your child’s entitlement to means tested benefits is not affected.

Remember, a Will is a precise legal document which can protect your loved ones after your death. A valid Will is the only way to ensure that your wishes are carried out. Give us a call if you have any questions about the circumstances relating to your Will. We’ll be very happy to help.

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We regularly advise couples on tax and protection issues. Quite often, during a routine consultation, we inform them that their joint accounts will be frozen should one of them lose their mental capacity in the future. More often than not, the couple simply can’t believe that this is true. Unfortunately, it is! That’s why we strongly advise couples to pay close attention to their financial arrangements, particularly if they give up their individual bank accounts and rely on one joint account. 

As this advice from the British Bankers’ Association states http://www.bba.org.uk/content/1/c6/01/45/51/jointacc.pdf, things can get tricky if one joint-account holder becomes mentally incapacitated. For those of you in England, your bank or building society would have to obtain an order from the Court of Protection (which protects the rights of mentally incapacitated people) before they can let you use the account. This can take time and cause extra heartache at a difficult time for the family.

We’ve blogged in the past about the importance of setting up a Lasting Power of Attorney. We’ll mention it again here, because it could have a real impact on access to your joint funds should one of you lose mental capacity. If the other joint-account holder had appointed you as attorney you will be able to register the power of attorney and run the joint account. However, if they appointed someone else, that person would have to agree with you (and the bank or building society) on the matter of how to run the joint account. In addition to this, the bank or building society may need a new mandate from you both.

Unfortunately for all those couples who think we’re joking when we say that joint accounts will be frozen if they lose their mental capacity – we’re not. Please take steps to protect yourself, and your hard-earned savings, against this outcome. We can advise you on how to set up protection quickly and easily.

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Do you ever think about what will happen to your home when you die? If you’re married, chances are you assume the property will pass in whole to your spouse. Unfortunately, that’s not always the case, and it’s a legal issue which causes hundreds of people heartache every year.

Failure to make a Will can result in intestacy laws coming into effect. These laws – used when no Will is left behind – were responsible for more than 1,200 widows and widowers being forced to leave their marital home last year. Under intestacy laws, assets are distributed to the surviving family, meaning children and other relatives can lay claim to their inheritance, forcing the spouse of the deceased from their home.

The best way to avoid this happening after you are gone is to put together a clear and legally-binding Will stating your exact wishes.

Under intestacy laws, surviving spouses with children will automatically receive their partner’s personal possessions and the first £250,000 of the estate, and an additional lifetime interest in half of the remaining estate. The remainder of the assets go to the children.

But what if you have no children? If the deceased person was childless but has a surviving parent, sibling, nephew or niece, their partner will receive the first £450,000 plus an interest in half of the remaining estate, with the rest going to the relatives.

Matters get even more complicated in the case of second marriages. Second wives and husbands are often challenged by the children of their spouse’s first marriage over the family home. 

Surviving spouses who want to stay in their home will have to challenge intestacy laws by going to court and claiming against the interests of their own relatives. This is probably the last thing anyone wants to do when they have recently been bereaved. The answer is to protect your spouse and family by drawing up a Will, now! Figures show that only about 50% of people in the UK have a Will. Which half are you in?

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You probably already know that setting up a trust protects your wealth from inheritance tax. However there are many other benefits to using trusts to pass on wealth. Here are some of them:

- retaining control of assets when passing them to adult children

- protecting assets, typically family wealth, for future generations

- protecting wealth: from the taxman, from legal challenges, from marriage breakdowns or children who may spend it too quickly!

- trusts can be used for tax-planning and can carry significant tax advantages

Did you know that trusts can be set up at various points during your lifetime? As well as making provision for someone, a trust can be set up to mark the marriage of a child or birth of a grandchild. You can also set up a trust as part of your Will.

One major benefit of a family trust is that the nominated trustee – the person who has control of the trust and its assets – can be placed under strict instructions through a legal document called the trust deed. This controls how, when and to whom the trust’s income is released. Trustees can be close friends, family or professionals.

Trusts for more than one child

Families don’t always set up individual trusts for separate children, but it can be done. Typically, a trust is created with a range of individuals, meaning that one child’s share can be held for others if circumstances change.

If a child loses their parents before they turn 18, a trust is created statutorily and they can access the money when they reach the age of 18. For this reason, having a trust as part of a Will created during an individual’s lifetime is a great idea as it means a degree of control will be retained even if parents’ wealth passes to young children or teenagers.

You’ve worked hard to earn your wealth and we think you should protect it.Talk to us about the best way to set up a family trust if you think it would be beneficial to you and your family.

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Family trusts are a great – and tax efficient – way for parents to retain control as they pass assets to grown-up children. Have you considered that a family trust might benefit you?

Trusts have their history in providing family wealth with protection: securing the safety of family assets for future generations whilst keeping them safe from the taxman, from legal challenges and from divorces. But they still have their place in today’s financial culture and can be very useful if set up to perform well for you.

Like any trust, a family trust is a legal arrangement (set up with the help of a legal advisor) where the trustees are made legally responsible for the assets in question. The trustees have a legal responsibility to carry out the wishes of the settlor – the person who put the assets into the trust. Sometimes, trustees are also required to make decisions about how the trust’s assets should be used. In any case, the assets are held “in trust” for the beneficiaries, protecting them and safeguarding the wishes of the settlor.

There are several types of UK family trusts and we can advise you on which is most suitable depending on your family’s circumstances. A trust can provide peace of mind if the person the assets pass to are not yet ready (or able) to look after them, perhaps in the instance of teenage beneficiaries or those who are infirm. Another benefit of setting up a family trust is that the legal arrangements ensures your wishes are carried out when your assets are passed on. Ask our advice about how a family trust can safeguard family money, investments or property. 

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Did you know there are around 2.5 million between the ages of 70 and 74 in the UK? At a recent speech given at the British Museum, Shadow Chancellor George Osborn talked of plans to strengthen the country’s economy, bringing back Britain’s savings culture and encouraging everyone to save for retirement. How much do you save? Do you know how much you’ll receive when you’re retired? Don’t put this important issue off!

Conservative plans to scrap annuities 

Osborn’s speech outlining Conservative plans to scrap compulsory annuitisation at 75 was welcomed by pensions and savings experts. For instance, Tom McPhail at Hargreaves Lansdown was reported as saying: “There is no decent justification for forcing investors to buy an annuity. There are currently around 450,000 people aged 74 and the best part of 2.5 million between the ages of 70 and 74. A fair proportion of them will not want to buy an annuity.”

McPhail pointed out that 90% of pension funds are worth less than £50,000 at retirement, so most people will still benefit from taking an annuity. “For investors with small funds, an annuity will continue to present the most efficient way to eliminate investment and longevity risk,” he said.

A rule-change around annuities would help those of you with a more substantial fund or another secure source of income (such as a final salary scheme). It will also benefit prospective savers in the long-run. As McPhail said, it will hopefully send out an important message: “That they will be able to retain control of the money that they have saved up. This in turn will encourage more people to engage with the pension system in the first place.”

Many people are of the opinion that annuities have no place in today’s (and tomorrow’s!) retirement market. Kevin LeGrand, Head of Technical Services at Buck Consultants, said: “Compulsory annuitisation is a hangover from bygone days when people’s retirements were shorter, they had less money to play with, less flexibility and fewer financial opportunities.”

What do you think? Do you welcome the proposed changes? If you have any questions about annuities, savings, pensions and alternatives, speak to us for no-nonsense, friendly advice. It really is never too soon to start planning for your retirement.

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If you own your own business, you may have thought about protecting your business and your personal wealth, but how about combining the two? As a business-owner, protection of family wealth means paying attention to business assets.

It won’t come as a surprise to hear that we think everyone should have a Will in place. If you own your own business, however, we really think it’s crucial.

We can advise you on the intricacies of drawing up the most effective Will taking into account business assets. For example, any assets qualifying for business property relief shouldn’t be left directly to your spouse in your Will (if the business is sold after soon after your death, BPR will be lost as the business is turned into cash).

Of course, your family may not choose to sell the business, choosing instead to pass it on to further generations of the family. In this case, we might advise that a trust is set up to help with succession planning. Trusts can be particularly helpful if children are not old enough or responsible enough yet to have a controlling interest in the company.

What if your children work for you in the business? This is a common scenario, further complicated if there are other children who do not work in the family business. It is not always possible to leave the business to some of the children and leave other assets to the others, particularly if the business assets represent the bulk of the family’s wealth. Of course, you’ll want to treat your children equally. We can advise on the best solution: for example, introducing a legal mechanism to ensure that all shareholders have equal right to dividends.

If your business represents a significant part of your family’s wealth, it makes sense to take the necessary legal steps now to ensure your family is provided for. We can help.

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