Will the Government Inherit my Assets?

Without a Will in place, everything that you have worked hard for is left beyond your control. Having a Will in place (that is up to date!) is the only way to ensure that the people you want to benefit from everything that you have worked hard for, actually do!

In the absence of a Will, the Rules of Intestacy decode where your hard earned assets end up and this may not be where you would have chosen…

There are more than 30 million people in the UK without a Will, so if you haven’t got your in place yet, you are not alone! BUT, that is no excuse to sit back and relax!

Many of us put off the talks around later life planning for fear of tempting fate or upsetting someone but this has led to an eye-watering £48million of deceased property being unclaimed and so passing to the Crown!

Something else you may want to consider is, whether Care Home fees will be eating into everything you have worked for…

These talks do not have to be all doom and gloom!

That is where we come in!

We are more than happy to discuss what you want, put plans in place and give advice. Whilst none of us want to expect the worst, we should always plan for it…having peace of mind that we are covered no matter what happens is a great feeling!

So, instead of avoiding those all important conversations like the plague, open up the conversation, discuss it with your family and if you need advice, have any questions or want to get something in place…set up a FREE CONSULTATION with us.

If you have any questions or would like to arrange a free consultation, call us on 01727 865 121 or email us at info@TotalLegacyCare.co.uk

Leah Waller

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30th October 201923rd April 2020

What is Inheritance Tax and how can I reduce it?

What is Inheritance Tax and how can I reduce it?

Most of us will pay taxes for a large proportion of our lives and then still leave our loved ones with a tax bill to pay upon our death for Inheritance Tax…it doesn’t seem fair does it?

So what exactly is Inheritance Tax? When is it payable and is there anything that you can do to reduce your Inheritance Tax bill?

Let’s take a look…

Inheritance Tax only becomes payable on death and is calculated taking into consideration the value of everything that you own at the date of your death and including any gifts that you made within the seven years prior to your death. Any debts or liabilities that you have at the date of your death will be deducted from the value of your assets and this final balance is what is used to calculate whether any Inheritance Tax is payable.

If you are leaving your assets (property, money, personal possessions etc.) to your spouse or civil partner then this will be exempt from Inheritance Tax, as are any gifts made to Charities.

However, anything left to children or anyone else will be subject to Inheritance Tax where the value exceed the Inheritance Tax Threshold.

The Inheritance Tax Threshold is currently set at £325,000 per person and an additional £150,000 can be claimed if you are passing your residential property to a direct descendent (children / grandchildren), this is termed the Residential Nil Rate Band. The figure of £150,000 is set to rise to £175,000 in April of 2020 meaning that each person will have £500,000 before having to pay Inheritance Tax. This is also transferable between spouses and civil partners, meaning that if you pass everything to your spouse or civil partner upon your death then no Inheritance Tax will be payable and from 2020 (if both your death and your spouse/civil partner passes after April 2020) then your Estate can total £1million before any Inheritance Tax is payable.

If your estate is worth more than £2million then you lose the right to claim all of the Residential Nil Rate Band, thus for every £2 over the £2million valuation, you will lose £1 of the Residential Nil Rate Band.

Inheritance Tax is payable at 40% of anything above the Inheritance Tax Threshold (or Nil Rate Band).

If you are leaving 10% or more of your Estate to Charity (whether one or multiple Charities) then your rate of Inheritance Tax will be reduced to 36%.

Now, we mentioned above that any gifts made in the seven years prior to your death will be taken into account when calculating the value of your Estate. HOWEVER, if these gifts were made from surplus income then they do not need to be taken into account when calculating your Inheritance Tax liability. We all benefit from a £3,000 allowance each year which we are able to gift before Inheritance Tax become payable and so it may well be important to consider this when assessing the value of a deceased loved one’s Estate.

There may be other exemptions on gifts that you can benefit from such as gifts on marriage, you can find out more about this in our article – Inheritance Tax: What can be done to reduce your exposure?

Another consideration that we would always advise looking at is putting your property into a Trust, meaning that upon their death the property passes to whoever they want it to (perhaps their children, grandchildren, nieces or nephews) but their spouse is entitled to benefit from the property and live there until their death or until they remarry (if this happens). This not only has the benefit of protecting the property for your intended beneficiary but also protects you and your spouse if the property is valued in relation to Care Fees as the share in Trust will not be taken into consideration.

As always, we would always recommend reviewing your Will regularly to ensure that it still does exactly what you want it to and that you have considered possible benefits and exemptions that you could benefit from.

Check out our article – Inheritance Tax: What can be done to reduce your exposure? For more information on reducing your Inheritance Tax liability.

If you would like to discuss your Inheritance Tax liability, or putting a Will in place, call us on 01727 865 121 or email us at info@TotalLegacyCare.co.uk for a free consultation

Leah Waller

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2nd October 201923rd April 2020

Wouldn’t it be great if we could predict the future?

Wouldn't it be great if we could predict the future?

We all have busy lives and so sometimes just predicting what today is going to ring is an achievement, let alone way into the future! It would be great though, wouldn’t it 😉

Unfortunately, none of us know what is just around the corner and so planning for it is key. That is where Lasting Powers of Attorney (LPAs) come in! LPAs are relevant during your lifetime and ensure that someone that you trust and have appointed as your Attorney can act on your behalf when you are unable to. Check out our article, Why Do YOU need an LPA? 5 reasons YOU should put your LPA in place for more information on LPAs.

We all know that age is going to hit us hard at some point but that ‘point’ is way off in the future, right? Unfortunately, this may not be the case…

Just looking at a few celebrities, we can see that an LPA may be needed a lot sooner than we would have hoped!

Chris Tarrant was just 67 years of age when he suffered a stroke that led to an emergency operation and ongoing rehabilitation to help him to regain his speech and physical movement.

Michael Schumacher was only 44 years old when a skiing accident resulted in him being placed into a medically induced coma (for six months!) and suffering life-threatening head injuries.

Micahel Schmacher is a father of two children, who were aged just 14 and 16 at the time of the accident.

Richard Hammond was involved in an awful car accident whilst filming for Top Gear at the age of just 37 causing major brain damage after being in a coma for two-weeks, this also led to significant memory loss and depression.

However, it is not just celebrities that this happens to and when we take a look at the facts, they are hard-hitting! Just a couple of statistics for you:

Every 90-SECONDS, someone in the UK is admitted to hospital with a brain injury;
Every THREE-MINUTES, someone in the UK is diagnosed with Dementia (and this is not just a condition that affects those over 65!);
Every FIVE-MINUTES, someone in the UK suffers from a stroke;
One in Six people within the UK will have a stroke during their lifetime;

So, enough of the doom and gloom….

What can we do to ensure we are protected, plan for our future and our family’s future and give us some much needed peace of mind?

The answer is a simple one…. Get your Lasting Powers of Attorney in place whilst you still have capacity to do so!

There are two types of Lasting Power of Attorney:

Health & Welfare Lasting Power of Attorney; and
Property & Financial Affairs Lasting Power of Attorney.

(to find out more about these check out our article Why do I need an LPA?)

An LPA allows you to appoint an Attorney, or Attorneys, to make decisions for you, and on your behalf when you are unable to. This could just be a temporary measure due to a temporary loss of capacity either physically or mentally or a more permanent arrangement.

You can give your Attorneys guidance and state your preferences, should you choose to do so, within your LPAs and set out the extent of the power that you want your Attorneys to have.

So, what if you don’t get around to getting these all important LPAs in place?

If you do not register LPAs whilst you have the capacity to do so then you lose control to a certain extent as it is then for your loved ones, or a professional, to apply to the Court of Protection for a Deputyship Order in order to manage your financial affairs on your behalf.

This process is costly – a court fee of £385, not to mention legal fees if you seek legal advice and potentially a fee for a professional to verify your lack of capacity to support the application being made, and timely – the application can take around 4 months to be granted from the date of submission however, if there are objections made to the application then this process can take 9-12 months!

Once you have lost capacity you lose the ability to choose who you want to appoint to manage your affairs for you and ultimately the choice is left to the Court of Protection – this may not be who you would have chosen had you been able to make the choice yourself.

You also lose the opportunity to give guidance to your appointed Attorneys and advise of your preferences.

In relation to your health and welfare, if you do not make an LPA to cover this whilst you have the capacity to the Court of Protection will be reluctant to appoint a Deputy in relation to your healthcare decisions unless the circumstances are extremely complex. Again, meaning you lose the control to appoint who you trust to make decisions on your behalf.

Getting an LPA in place doesn’t have to be complicated, time consuming or expensive and can ensure that you have peace of mind and take the burden away from those closest to you.

If you would like a free chat to see how we can help or if you have any questions please do not hesitate to get in touch for a FREE consultation on info@TotalLegacyCare.co.uk or 01727 865 121

Leah Waller

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14th August 201922nd April 2020

Polygamous Marriages

What is the effect of a Polygamous Marriage on Inheritance?

We know that matters are more complicated when you die without leaving a Will, and everything that you have worked hard for may not end up with those that you want it to BUT what happens where a person dies leaving more than one spouse?

One question that often comes up is:

When someone dies without a Will their Estate (all of their assets, property and possessions) are distributed in accordance with the Rules of Intestacy (you can check out our simple flowchart here).

In simple terms, where you die without a Will but leaving a spouse and no children, your surviving spouse will receive everything. Where you leave a spouse and children, your surviving spouse will receive the first £250,000 of your Estate and all of your personal possession, plus half of everything above the first £250,000 with the other half being split between any children.

Although you may be happy with your Estate to pass in this way, a lengthy and costly process may follow through the courts for your money to go to your loved ones and this could be avoided by having a Will in place.

So what happens where there is more than one spouse?

This may occur where the deceased is domiciled in a country where polygamous marriages are recognised and legal but owns property in England & Wales leaving it to be determined by the laws of England & Wales to determine what happens to such inheritance.

Current case law, in England & Wales, recognises ALL spouses within a valid polygamous marriage as a ‘surviving spouse’ for the purpose of the Rules of Intestacy. This means that where the deceased leaves more than one spouse but no children, all surviving spouses would each receive an equal share of the deceased Estate. Where deceased leaves more than one spouse and children, the surviving spouses will each receive an equal share the first £250,000 of the Estate, plus an equal share each in half of everything above the first £250,000 with the other half being split equally between any children.

Anything that passes to a spouse upon death, passes free from Inheritance Tax and so where there is a polygamous marriage this is also the case and so all gifts made to a spouse in a valid polygamous marriage will be exempt from Inheritance Tax.

However, where the deceased is domiciled outside of England & Wales then the amount passed to a spouse will only be free from Inheritance Tax until the Nil Rate Band threshold is reached (currently £325,000) regardless of whether it is passing to a spouse or not.

In order for a polygamous marriage to be recognised and valid in England & Wales it must have taken place outside of England & Wales and adhere to that country’s legal requirements in relation to marriage.

If you have any questions please do not hesitate to get in touch for a FREE consultation on info@TotalLegacyCare.co.uk or 01727 865 121

Leah Waller

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want to book a
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5th June 201923rd April 2020

Probate & Estate Administration: What does it mean?

Probate & Estate Administration:
What does it mean?

At one point or another we will all have come across the term PROBATE or ESTATE ADMINISTRATION but what does it actually mean?

It is one of those questions that we have all had but may seem silly to ask…it isn’t!

PROBATE is the legal term for ‘proving the Will’ and this is done by applying to the Probate Registry for a Grant of Representation (also known as a Grant of Probate) to administer the Estate of the deceased.

ESTATE ADMINISTRATION is the term used to describe the sorting out of the deceased’s Estate following their death. Their Estate includes all of their possessions, property, money, savings, investments and anything else that they own or have an interest in. Their Estate may also have liabilities, such as debts (credit cards, utilities a mortgage), that require attention to. The Estate may also have tax liabilities (Inheritance Tax, Income Tax, Capital Gains Tax etc.) and this will also be dealt with as part of the Estate Administration.

Probate is often used as an overall term to describe the entire process, from obtaining the Grant of Probate through to administering the Estate, by collecting in all the assets, paying off the liabilities and tax, and distributing the Estate in accordance with the Will or the Rules of Intestacy (where there was no valid Will).

Estate Administration can be carried out by the Executor (as appointed under the Will) or a Representative of the deceased (where there is no Will and that Representative has applied for Letters of Administration), or can be carried out by professionals. In some circumstances the Executors or Representatives may require assistance of a specialist, especially where the Estate is complex or they have not had any dealings with such a situation.

It is worth remembering that Estate Administration takes a significant amount of time, with it being estimated that loved ones spend in excess of 50 hours dealing with Estate Administration where a specialist is not instructed.

In addition to this, those that carry out the Estate Administration themselves are personally liable for any mistakes that they make during the Estate Administration process.

If you are considering carrying out the Estate Administration yourself, you may find our Checklist for Executors helpful.

REMEMBER…You don’t have to do everything alone, ask for help as and when you need it!

If you would like to have a free chat, please contact us on info@TotalLegacyCare.co.uk or 01727 865 121

Leah Waller

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15th May 201923rd April 2020

What happens if I die without a Will?

What happens if I die without a Will?

We are always saying how important it is to have a Will in place – well, we would, wouldn’t we?

But, what happens if you don’t?

What happens to all of your hard-earned cash, property and possessions?

We have created a simple flowchart for you to have a look at to see exactly what would happen to all your worldly goods should anything happen to you and you have not got a Will in place…you may well be surprised who could get your hands on it!

And…even if this is where you would want it to go, without a Will in place, it could be a costly process for your loved ones to go through in order to access their Inheritance.

So, what does this all mean?

Let me set out for you the above…

The first consideration is whether you are married, if you are married and your spouse or civil partner survives you:

If the whole Estate is worth £250,000 or less
- your surviving spouse or civil partner will inherit your entire Estate
If your Estate is worth more than £250,000
- your surviving spouse or civil partner will inherit the first £250,000

- The remainder will be split as follows:
  - your surviving spouse or civil partner will receive a life interest in HALF the remainder (above £250,000)

- - The other half to be split between any surviving children (if your children predecease you, leaving children of their own, your grandchildren will inherit their parents’ share.

If you are NOT married then the order of inheritance is as follows (in equal shares):

Living Children / Grandchildren / Great Grandchildren*
Living Parents
Siblings*
Half-Siblings*
Grandparents
Uncles and Aunts*
Half-Uncles or Half-Aunts*
THE CROWN

*If the person listed prior to the * has predeceased you but has surviving children

then their children will inherit in their place.

In the list above, no-one further down the list can inherit if the group above can inherit, therefore, if there are no living children, grandchildren, great-grandchildren or parents then your siblings would inherit (or their children should your siblings have predeceased you). Your grandparents would NOT inherit however, as the group above them have.

You will see ‘THE CROWN’ at the bottom of the list. Yes, that’s right…if you leave no family (set out in the groups listed) then your whole Estate will pass to the crown – is that what you want?

The best and only way to ensure that your money goes exactly where you want it to and to who you want it to, is to get a Will in place.

If you would like to have a FREE chat about getting your Will in place, please contact us on info@TotalLegacyCare.co.uk or 01727 865 121

Neil Barras-Smith
& Leah Waller

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want to book a
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24th April 201923rd April 2020

Inheriting Loyalty Points

Inheriting
Loyalty Points

Recent reports suggest that we (in the UK) accumulate £5.7billion in loyalty points EACH YEAR!

On average, most of us are members of five different loyalty schemes, each collecting points but a massive 93% of us are unaware that these can pass be passed on to a loved one when we die.

So, should we be including loyalty points and those details in our Wills? In short, YES!

Below, we take a brief look at three of the most popular loyalty schemes and how the accumulated points can be passed on following a death:

Nectar Card

Those of us with Nectar Cards are able to collect points with a number of different retailers (including Sainsbury’s) and to redeem those points against different brands.

Although Sainsburys policy states that the points are “personal to the Nectar account and cannot normally be transferred”, they can be transferred following death. In such circumstances the beneficiary must contact Nectar directly and request a transfer of the points.

Tesco Clubcard

The Tesco Clubcard allows members to collect a point for every £1 that is spent with Tesco (online and in store) and a point for every £2 that is spent on fuel, with the points then being transferred into vouchers for use in Tesco, for days out, eating out, travelling and other benefits.

In order to transfer the points accumulated by a deceased loved one, the beneficiary will need to contact Tesco Customer Service Centre to request closure of the deceased’s account and a transfer of the points to their existing Clubcard account or to a new Clubcard account.

Boots Advantage Card

With the Boots Advantage Card, you can collect four points for every £1 that is spent with Boots and those points can then be used as payment (one pence per point) in store or online.

Members can nominate a beneficiary to inherit their Boots Advantage Card points and members should get in touch with Boots Customer Care to arrange this.

So, leaving information as to the loyalty schemes you are part of, membership information (membership number, account numbers, passwords etc.) is important to allow your loved one’s to benefit from the loyalty points that you have collected.

If you would like a free consultation to discuss your Will in place, or putting a Will in place call us on 01727 865 121 or email us at info@TotalLegacyCare.co.uk

Leah Waller

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Got a Question or want to book a FREE Consultation?

17th April 201923rd April 2020

What happens to your social media accounts when you die?

What happens to your
social media accounts
when you die?

With so much of our lives now online, whether by choice or through companies operating primarily online, this means our digital presence is ever growing, but what happens to that when we die?

More importantly, what happens to our social media accounts, profiles and all of that information and photographs after our death? What would you want to happen?

A recent YouGov survey has revealed that:

67% of people wanted their social media accounts removed after their death
26% of people wanted the content of their social media accounts to pass to their loved ones once they have died; and
7% wanted their social media accounts to remain online.

Social media networks each have their own policies in relation to what happens to an account when a person dies…

FACEBOOK

Once the death is reported to Facebook, the individual’s page will be memorialised. However, an immediate family member can request that the page is removed completely.

Facebook also allows you to manage your page (whilst living) to plan for what you want to happen following your death, this includes setting a ‘legacy contact’ to manage parts of your page once it has been memorialised.

INSTAGRAM

As with Facebook, once the death is reported to Instagram, the individual’s page will be memorialised. However, an immediate family member can request that the page is removed completely.

TWITTER

If there is no activity on a Twitter account for a period of six months then Twitter will automatically delete the account.

GOOGLE

Google, similar to Facebook, provides an ‘Inactive Account Manager’ function that allows you to plan for what you want to happen following your death, including giving a loved one access to your information or requesting that your account is automatically deleted.

With so much now being conducted and stored online, this is an area that is certain to develop and progress. The amount (and importance) of the information, including irreplaceable photographs, that is stored online and on social media accounts means that their value is ever increasing and so it is not uncommon for individuals to include provisions for their social media accounts in their Wills and Letters of Wishes.

If you would like to discuss your digital legacy, or putting a Will in place, call us on 01727 865 121 or email us at info@TotalLegacyCare.co.uk for a free consultation

Leah Waller

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Got a Question or want to book a FREE Consultation?

20th March 201923rd April 2020

Cryptoassets: Should I include them in my Will and is Inheritance Tax payable?

Cryptoassets: Should I include them in my Will and is Inheritance Tax payable?

With a rise in cryptoassets and their prevalence in modern day society it is important to consider whether these should be included within a Will and perhaps more importantly how they will be valued for tax purposes upon death…

So perhaps a good place to start is actually defining what a cryptoasset is…

Many of us have heard of ‘Bitcoin’ after it becoming popular in the News headlines of late and ‘Bitcoin’ is a type of cryptocurrency, or cryptoasset and represent digital assets that an individual has legal rights over (meaning that they can transfer ownership, store it or trade it).

Cryptoassets are split into three categories:

Exchange Tokens (including cryptocurrency such as Bitcoin);

These can be used as a method of payment but typically there is no person, group or asset underpinning these and so their value is used for exchange or investment.

Utility Tokens;

These are provided by a particular business, or group of businesses, to provide the holder/owner with access to goods or services that they provide.

Security Tokens

These are provided by businesses as a form of share or credit due to the holder by

that business.

HMRC has specifically, and categorically, stated that cryptoassets are not viewed as currency or money, so that means there is no cash value and they are exempt from Inheritance Tax and indeed any other taxes, right? Sorry, WRONG!

The liability for tax will depend on the type of cryptoasset and the use of the asset.

Cryptoassets will attract Capital Gains Tax when they are disposed of (sold, exchanged, used to buy other goods or services or given away/transferred to someone else), much like any other asset that is disposed of by an individual. Other taxes may also apply to cryptoassets depending on how they are used, however, we will only be focussing on Inheritance Tax here.

HMRC make it clear that the onus is on the individual, and no other third party/issuer or otherwise to keep records of their cryptoasset transactions and this should include:

the category of cryptoasset;
the date of the transaction;
if the individual bought or sold the cryptoasset;
the number of cryptoassets;
the value of the transaction in GBP (£) – even where there is no pound sterling value an appropriate exchange rate must be calculated and records should be kept of the valuation method;
the cumulative total of the investment in cryptoassets that is held by the individual;
Bank statements if required for a review or enquiry.

So, what we all came here to find out…are cryptoassets included in the valuation of an Estate for Inheritance Tax purposes?

YES!

Cryptoassets have a value and so although they are not included as money or currency they are included within the valuation of an Estate under ‘PROPERTY’ for the purposes of calculating whether Inheritance Tax is payable.

If you would like to have a free chat about your Will, please contact us on info@TotalLegacyCare.co.uk or 01727 865 121

Leah Waller

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Got a Question or want to book a FREE Consultation?

14th March 201923rd April 2020

Can the Inheritance Tax process be simplified?

Can the Inheritance tax process be simplified?

The Office of Tax Simplification (YES, there is such a thing!) have published their first report on Inheritance Tax, looking at the views and experiences of over 3,500 participants.

Some key findings of the report show:

Where people were not using an Adviser to assist with the probate process, the executors were spending in excess of 50 hours on administration of the Estate.

Participants stated that ‘obtaining Probate’ and ‘completion of the relevant forms’ were the “most time-consuming” tasks in administering the Estate.

Concerns were raised over submission of Inheritance Tax forms even where no Inheritance Tax is payable.

65% of participants stated that they “still had to provide significant amounts of information” in relation to the Estate regardless of whether Inheritance Tax was payable or not.

In the tax year 2015-2016, Inheritance was payable on only 24,500 Estates, however, 275,000 Inheritance Tax forms were completed and returned to HMRC. Thus showing that even where the Estate may seem small and simple, forms may still cause complications.

The key recommendation from the Office of Tax Simplification, following this report is:

“The government should implement a fully integrated digital system for Inheritance Tax, ideally including the ability to complete and submit a probate application.”

Office of Tax Simplification

This seems an ideal solution, in principle, however this is a large, not to mention expensive and time-consuming, task to achieve. A digital system for the whole process could allow for a speedier and much more simple procedure for the whole process from obtaining probate through to reporting on the Estate and payment of correct Inheritance Tax where applicable.

However, we will wait to see for such action to be taken and for now work with the system as it is.

If you would like to have a free chat about Probate or administration of someone’s Estate, please contact us on info@TotalLegacyCare.co.uk or 01727 865 121

Leah Waller

Got a Question or want to book a FREE Consultation?

Tag: Intestacy