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Funeral Costs Rise

BY: Paul / 0 COMMENTS / CATEGORIES: News

Funeral Costs Increased By 3.4% Last Year

The average cost of a funeral has increased by 3.4% to £4,417 since last year. 

The increase is forcing a lot more grieving families into financial difficulties according to the latest Cost of Dying Report by SunLife. 

12.5% of all families faced the unenviable prospect of finding the money to pay for the funeral costs of their loved ones. 

The report claims that the final celebrations of a loved ones life is contributing to debt with over a fifth of families borrowing money from friends and family members to cover funeral costs. 

Additionally, a quarter of respondents admitted to paying for the funeral on their credit cards or through loans. 

It seems as though regions vary greatly with Londoners facing an average funeral bill of £5,963, a staggering 35% more than the national average. 

Whilst the average funeral increased by 3.4% in the last year, residents of the Midlands and Wales faced the largest annual funeral cost rises of 9.6% and 9.4% respectively. 

Last year, Royal London published a National Funeral Cost Index. It found that the total amount of funeral debt in the UK has risen to £147m, up 12% from last year. 

It estimated around 74,000 bereaved families who have struggled to cover the cost of a funeral in the past year. 27% of those who struggled said they went into debt from credit cards, loans or overdrafts. 

20% said they borrowed money from family and friends, with 12% saying they chose a cheaper funeral. The index also found that people on lower incomes are spending much more of their income on a funeral, meaning they’re left worse off than those on higher incomes. 

What are the alternatives? 

It is only natural to want to give your loved one the ultimate send off. For many, the consensus has been a service, usually in a crematorium followed by burial or cremation. 

Overall, 23% of all funerals involved a burial service with 77% ending in cremation. 

However, with costs rising and more families spiralling into debt, should we start to stray from the traditional and often expensive funeral pathways? 

The report found that the average cost of a basic cremation, including a service was £3,858 once a coffin, service space and funeral car are factored in. 

However, direct cremations, whereby the deceased is cremated without a service, fell in price by 5% to £1,626. Loved ones would then have the option to hold a memorial service once the ashes are returned. 

Almost half (44%) of all respondents were unaware of this option with 42% happy for this option to be embraced for their own funeral if it meant their loved ones were able to avoid financial stress.  

A fifth would also consider this option for their loved ones as it meant they were able to organise original and bespoke memorial services.   

Ian Atkinson, Marketing Director at SunLife, commented:  

“Some people do not like the thought of not having a service in a crematorium, thinking perhaps it is not a ‘proper’ send-off, but this view is changing more and more. We may well start to see more and more people having direct cremations in the future as people realise how much cheaper they are and how they’re able to have the complete flexibility to have a personal service of their own wherever they wish.  

“The cost of direct cremations is also falling, and the main reasons could be the rise in competition and families looking for a good low-cost funeral option. Funeral directors are responding to changes in consumer demand, with more customers shopping around and looking for a good lower-cost option.” 

How damaging is the cost of a traditional funeral to already grieving families?

  • by Martin Parrin
  • Jan 10, 2020

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Its never to early to Plan

BY: Paul / 0 COMMENTS / CATEGORIES: Funeral Plans

It’s never too soon to start saving for your retirement, they say. But is it ever too soon to start planning your funeral? If it is, the journalist Lauren Windle from the Sun newspaper hasn’t been put off. She only twenty-eight now, but she’s been planning her funeral since she was twelve.

Why did she start so young? She says it was her father. Whenever she had a minor complaint in childhood – like being stopped from eating sweets before a meal – her father would remind her of what lay ahead. There were two things she would be unable to avoid as a grown-up. First she would have to pay taxes; and then, sooner or later, she would die. I’m glad my father didn’t tell me the same. Those are serious thoughts for a child, but maybe they’re useful ones too.

Life can’t be fun for ever. And life can’t last for ever. That was a lesson that Laura absorbed early and that’s why she began thinking about what she wanted her funeral to be like. In short, she began a funeral plan. The first thing on her mind was the music. What song should be played to sum up her life and bring a tear or a smile to the mourners? At the age of twelve, she liked a ballad called “There You’ll Be” from the movie Pearl Harbor. It was full of emotion and power – a perfect way to say goodbye.

Or so she thought at the age of twelve. But our tastes change as we get older. Later she thought she might like Frank Sinatra’s “I Did It My Way” instead. It’s a very popular choice as a funeral song – many thousands of people have sent that defiant message to the world as they left it. But what about something quirky? Laura later decided on the Bee Gees’ “Stayin’ Alive” as a her funeral song. That would raise a smile, wouldn’t it?

Or maybe not. Her choice of song kept changing. At the moment it’s “See You Again” by Wiz Khlaifa, another emotion-filled song from a movie. It was played in Fast & Furious 7 to honour Paul Walker, the star of the franchise who had died in a car-crash in Los Angeles. But it’s more than likely than her choice of funeral song will change again. After all, she’s still only twenty-eight and she might live to be a hundred or more.

Or she might have an accident and pass away much sooner. Like most people, she has no idea when she’ll go and she wants to be prepared. Beside music, she’s also planning the food for her funeral. If her funeral plan as a whole was inspired by her father, her choice of food is influenced by her mother, who has an interesting story about her university days. She studied science and one day, working in the laboratory, she accidentally breathed in what she thought was a deadly gas.

“In an hour or two I’ll be dead!” she thought. But she wanted to have lunch first. With no future ahead of her, or so she thought, she chose an expensive prawn sandwich rather than the cheaper egg mayo she usually had. She didn’t die, of course: she married and had a daughter called Laura. And Laura, having heard her story about the poisonous gas and the prawn sandwich, decided that prawn sandwiches would be the perfect accompaniment to a real funeral.

For one thing, it’s a good family joke. And there’s nothing wrong with that. A funeral plan can have humour in it, if that’s what you want. The choices are yours, because it’s your funeral. But it’s a good idea to discuss your ideas with your nearest and dearest, even if you want to keep a few surprises up your sleeve. Laura Windle may be doing that in another part of her funeral plan: the message she’s recorded to be played when the mourners are gathered in church.

She wants to tell them that she loves them and that they meant the world to her. But her funeral message, like her choice of song, may be updated again and again as she gets older. Life brings us new experiences and we change our minds. A funeral plan doesn’t have to be set in stone. It’s likely, though, that we will be more and more satisfied with it as we get pass our middle years and into old age. At the age of twenty-eight, Laura Windle is having fun her funeral plan. As she gets older, she will begin to gain comfort from it. The funeral plan will allow her to have some control over something that none of us can control: the fact of our mortality.

We can’t choose to live for ever and when we have a funeral plan we have faced the end of life and decided how we want to be remembered. With a funeral plan, we can save money, enjoy peace of mind, and lift an enormous burden from our loved ones. They won’t have to make decisions about our funeral because the decisions will already have been made.

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A Lasting Power of Attorney – Commonly Asked Questions

BY: Paul / 0 COMMENTS / CATEGORIES: News

With 12.5 million people in the UK over the age of 65 and just under 1 million Lasting Powers of Attorney registered with the Court of Protection, it’s hard to believe that despite the number of people being affected by dementia or some other illness which affects their capacity, measures aren’t being put in place to protect loved ones.

A Lasting Power of Attorney is a legal document which allows a person (called the donor) to appoint someone they know and trust to make decisions on their behalf should they become unable to do so in the future. This person is called an attorney. Attorneys must always act in the best interest of the donor.

There are 2 types of LPA: –

  • Health and Welfare
  • Property and Financial Affairs

Let’s look at what each LPA can do and what decisions it covers:

Health and Welfare

  • Day to day decisions such as exercise, dietary requirements
  • Medical care
  • Life sustaining treatment
  • Relocation into a care home or sheltered accommodation

A Health and Welfare LPA can only be used once it has been registered with the Office of Public Guardian (OPG) and when the donor loses mental capacity.

Property and Financial Affairs

  • Managing bank accounts
  • Paying bills
  • Collecting income and benefits
  • Making decisions with regards to the home
  • Selling the home
  • Managing investments

A Property and Financial Affairs LPA can be used as soon as it is registered with the OPG. The donor can restrict the rights the attorneys have under the “instructions” section of the LPA form.

Appointing Attorneys

Normally 1-4 attorneys can be appointed but it is important for the donor to ensure the attorneys are someone they know and trust to act in their best interests. Attorneys can act either: –

  • Jointly (attorneys must agree unanimously on every decision);
  • Jointly and severally (attorneys can make decisions on their own or together); or
  • Jointly for some and jointly and severally for other decisions (attorneys must agree unanimously on some decisions but can make others on their own).

Capacity

Before an LPA is made, it is imperative that the donor is over 18 and has mental capacity. This means they must understand:

  • What an LPA is
  • Who they want to make it?
  • Who they are appointing as attorney?
  • How they have decided the attorneys; and
  • That they understand what powers the attorney will have.

If the donor cannot decide for himself in relation to the matter due to an impairment of or disturbance in the functioning of his mind or brain, such as late set dementia, it is likely they will not have the required capacity.

Essentially, the donor should be assessed on whether they have the ability to make a particular decision at a particular time. If unsure, a GP or independent mental capacity advocate can assess the donor’s capacity.

Registration

Once the forms have been submitted to the OPG, they can take up to 16 weeks to be registered.

FAQ

Can I do an LPA if my father has lost capacity?

No. An LPA can only be made by someone who has mental capacity. If a person loses mental capacity and has no LPA in place, an application would need to be made to the Court of Protection who will appoint a deputy to act in the donor’s best interests (this is known as Deputyship Order). Anyone over the age of 18 can apply to the Court of Protection to be your Deputy to make financial decisions on the donor’s behalf. This can be a lengthy (normally 6-month timeframe) and very expensive process with the added risk that the application may be refused by the OPG or that no provision will be made for Health and Welfare.

Do I have to register my LPA straight away?

To be effective, an LPA must be registered with the Office of the Public Guardian. There is a registration fee of £82 per document and is means tested so if the donor is on a low income or benefits, they may be eligible for remission of those fees.

It is better to have the LPA registered as soon as possible. The principle reason for this is that if the LPA is registered later on or where the donor starts to lose capacity, if the form is returned by the OPG for any reason (given the long turnaround time), the donor may no longer have capacity and therefore cannot sign the form. This will mean the LPA cannot be put in place for the donor anymore and an application for deputyship will need to be made. On top of that, imagine a loved one needs to go into a care home as their health has deteriorated but you are unable to access their funds to pay for care home fees until the OPG approve. Is the added stress worth it?

Once my LPA has been registered, I can’t change it.

Wrong. An LPA that has been registered can be revoked at any time, providing the donor still has mental capacity. This does mean a new LPA will need to be made and a further £82 registration fee paid.

Can I get an LPA for my business?

Yes. you can use the Property and Financial LPA to ensure attorneys can continue to make decisions about the continuity of your business, paying staff, entering into contracts etc. This means if you are a business owner you could have two Property & Financial Affairs LPAs, one dealing with your personal finances and the other appointing attorneys to deal with your business interests.

Capacity can be lost at any time and could be due to either an accident, a stroke or a deteriorating condition so please don’t wait until it’s too late.

You have read the above on why an LPA may not be necessary which this article explores further.

“I don’t need an LPA because my next of kin can make important decisions on my behalf”

Not true. No-one can act on your behalf or make decisions on your behalf if they have not been legally authorised to do so.

“My Will has appointed executors, so they’ll be able to make decisions on my behalf.”

Not true. A Will is entirely separate to an LPA. Executors appointed in a Will only have the power or authority to distribute your estate as requested and in line with your Will, on death. They have no authority to make decisions on your behalf during your lifetime.

“I don’t need an LPA until I become elderly and of ill health”

Not true. An LPA can be made by anyone over the age or 18 who has full mental capacity. Someone may lose capacity or no longer be able to make decisions due to an accident, being in a coma or other mental illness.

The sooner you put an LPA in place the better, as you know provisions will have been put in place in the event the unthinkable happens. If you wait and, in that time, lose capacity, it will be too late to get an LPA and your loved ones will need to apply for a Deputyship Order from the Court of Protection. This will not only take a long time but also a costly process.

“Once my health and welfare LPA is registered, it means someone else can make decisions for me and I don’t want that while I have capacity”

Not true. A health and welfare LPA only comes into effect when the donor loses capacity even if the LPA has been registered.

“Getting an LPA is expensive”

The cost of registering an LPA is £82 per document. In comparison, if you fail to make an LPA and lose capacity, your family will be left with no other option but to apply for a Deputyship Order, this will cost significantly more.

“Me and my partner have joint bank accounts, so we don’t need LPA’s”

Not true. This is always the most alarming to couples when they are told that even if they have a joint bank account, this does not mean the partner will be able to automatically access funds to pay for bills, mortgage or general expenses. If the spouse was to lose capacity, the bank have the ability to remove access and freeze the account until they receive a copy of the registered LPA which is extremely stressful for the spouse.

From THE BRITISH BANKING ASSOCIATION

What happens if the other joint account holder becomes mentally incapable? In England and Wales, if one party to the joint account loses capacity to operate their account, banks and building societies will use their discretion to determine whether or not to temporarily restrict the operation of the account to essential transactions only (for example, living expenses and medical/ residential care bills for both parties) until a deputy has been appointed or a power of attorney registered. In Scotland, you can continue to run the account as long as the original account mandate was either-to-sign and there is not a court order preventing the account from being used.

If the other joint account holder appointed you as attorney, under a ‘lasting power of attorney’ (in England and Wales) or a ‘continuing power of attorney’ (in Scotland), you can register the power of attorney and run the joint account.

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Dementia And The Benefits Of A Lasting Power of Attorney

BY: Paul / 0 COMMENTS / CATEGORIES: News


What is an Lasting Power of Attorney (LPA)?
An LPA covers decisions about your financial affairs, or your health and care. It comes in effect if you lose mental capacity, or if you no longer want to make decisions for yourself.
You would set up an LPA if you want to make sure you’re covered in the future.
There are two types of LPA:
LPA for financial decisions
LPA for health and care decisions.
An LPA for financial decisions can be used while you still have mental capacity or you can state that you only want it to come into force if you lose capacity.
An LPA for financial decisions can cover things such as:
Buying and selling property
Paying the mortgage
Investing money
Paying bills
Arranging repairs to a property
An LPA for health and care decisions and can only be used once you have lost mental capacity. An attorney can generally make decisions about things such as:
Where you should live
Your medical care
What you should eat
Who you should have contact with
What kind of social activities you should take part in
Unfortunately, many people diagnosed with dementia will eventually reach a point when they can no longer make decisions for themselves. When a person lacks ‘mental capacity’, it’s common for someone else, for instance a family member, to make decisions on their behalf.
Who can make an LPA?
Anyone who is over the age of 18 and has the mental capacity to do so can make an LPA. Once a person has lost mental capacity, they will not be able to appoint an LPA.
Why would someone need an LPA?
For a person with a diagnosis of dementia, there may come a time when they are unable to make decisions about their care and their finances. A lasting power of attorney is a legal document appointing one, or more, trusted people to be their attorney(s). An attorney is a person responsible for making decisions on the person’s behalf.

People in a civil partnership or marriage might assume their partner can deal with their finances and make decisions about their healthcare should they lose the ability to do so, but this is not necessarily the case. If someone has not drawn up an LPA when they are assessed to have lost capacity, and their partner or friend wants to make decisions on their behalf, they may have to apply to the Court of Protection to be appointed as the person’s Deputy. This can be a long, complex and expensive process.
Making the right choice
If you’re considering making a LPA, here are five reasons why it might be a good move for you and your family and friends.
Choice
You can choose people you trust to manage your affairs and to make decisions on your behalf, should you become unable to do so. You can choose who acts for you and how they make decisions.
Legality
A Lasting Power of Attorney is a legal document which authorises your specified people to make decisions on your behalf. If you provide your bank cards to trusted friends or relatives, any permission you have given to them will be automatically revoked if you lose capacity in which case, they are technically committing fraud.
Control
It is important to note that you do not lose any control by making an LPA. Indeed, a properly drafted LPA can contain details of your wishes and instructions for your Attorneys to follow, allowing you to retain control even after incapacity.
Reassurance
If you’re unable to make a decision for yourself in the future, the person you choose will be able to make decisions for you, rather than a stranger or someone you do not trust.
Plan Ahead
Making an LPA helps start conversations with your family about what you want to happen in the future.
Other ways an LPA is beneficial
An LPA isn’t just put in place due to mental illnesses, it’s also very important to have as a security for anything sudden that can happen. “It will never happen to me”, is what a lot of us think. But sadly, accidents do happen all of a sudden and out of the blue. And in a heartbeat, lives can be turned upside down.
In the UK, every 90 seconds someone is admitted into hospital with a brain injury, whether it be from an accident or contact sport being examples of what can go wrong.
If such a life situation was to happen and an LPA wasn’t a document you have, then family or friends wouldn’t be able to assist or take control of finances or welfare decisions. You would have to apply to the Court of Protection to grant you permission which is a costly and lengthy process.
To apply to become a deputy there’s a fee of £365 that you are required to send with your application. If the court decides that your case needs a hearing then there’s an additional charge of £485. These payments are only the start of charges that will be occurred should you need to apply to the Court of Protection.
Having an LPA not only eliminates occurring the charges and the stress, it also comes into place instantly. Once the LPA is submitted, it takes up to ten weeks to register. The power will be effective as soon as the LPA is registered, so the attorney will be able to start making decisions straight away, unless they specify otherwise on the application. When applying to the Court of Protection, the court aim to issue an order within 21 weeks of the application being stamped. It can take 5-6 weeks to get to this point, depending upon how long the initial steps take. Please note, an LPA must be put in place BEFORE the person loses their mental capacity.
Summary
You probably wouldn’t want to die without a will in place, especially if you own property, have substantial cash savings, or have a partner or dependants. But what if something happens to you that does not kill you, but leaves you incapable of communicating your wishes to those closest to you.
It’s an uncomfortable thought but it’s crucial to consider it in good health and make the sensible decision. An LPA is probably the single best way to make sure that your interests are protected from the moment you are incapacitated until your death, after which your will can distribute your estate in the usual way.

by Bhupinder Mann, Associate at Balfort LegalSep 23, 2019

 

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Why Establishing Testamentry Capacity is not a Tick Box Exercise

BY: Paul / 0 COMMENTS / CATEGORIES: Power of Attorney

Why Establishing Testamentary Capacity Is Not a Tick-Box Exercise

One of the many challenges for legal practitioners specialising in Will drafting is establishing the testamentary capacity of the Testator. While in some cases, the presence or absence of sufficient mental capacity may be clear, in others, there may be some uncertainty, necessitating a more comprehensive process to reach a consensus. In the case of James v James [2018] EWHC 43 (Ch); [2018] C.O.P.L.R. 147; [2018] 1 WLUK 252 (Ch D (Bristol)) the High Court was asked to make a ruling on a challenge to a Will based on lack of testamentary capacity, and also outline the factors law practitioners should consider when making a capacity assessment at the time of Will drafting.
James v James (2018)
James v James involved the Will of a man who died in August 2012 at the age of 81. The Testator had been a successful businessman with a farming and haulage operation in Dorset. He had been reluctant to make commitments to his family regarding his inheritance until later in his life after his cognitive wellbeing had been in decline for some time.
The Claimant, S, was one of the Testators three children. In 2007, some of the plots of land owned by the Testator were transferred to one of his daughters, and after the family farming partnership was dissolved, the claimant received a farm, £200,000, the haulage business, vehicles, and a license to use one of the plots, ‘Pennymore’ from which to operate the haulage business. S, however, had been led to believe he would inherit ‘Pennymore’, leading him to challenge the Will on the grounds of his father’s lack of testamentary capacity.
It was stated that the Testator had not been “as formidable as he had once been” from approximately 2004 and had been diagnosed with “moderate dementia with frontal lobe impairment” in 2011. The Will had been signed in September 2010, hence close to the time at which the Claimant had been assessed as unable to make decisions “about his health care, where he lives or his finances”. The High Court held that the common law test for assessing retrospective capacity should be the one set out in Banks v Goodfellow (1870) (Banks), rather than the statutory test set out in the Mental Capacity Act 2005. Applying Banks, the Testator, should have understood:
the nature of entering into the will and its effect;
the extent of the property of which he was disposing; and
claims to which he ought to give effect
In addition, Banks requires the Testator have “no disorder of the mind that perverts his sense of right or prevents the exercise of his natural faculties in disposing of his property by Will”.
The Court held the Testator did have the capacity to enter into the Will.
This case is significant as it underpins the continued importance of Banks as the sole test for judging Will-making capacity in retrospect, and despite being a case from 1870, has not been superseded by the more recent Mental Capacity Act 2005, which contains a new legal provision for the assessment of mental capacity.
Assessing testamentary capacity at the time of Will writing
The importance of verifying the mental capacity of a Testator should never be underestimated. Ultimately, by undertaking this process in a clear and concise manner, contentious probate can be avoided, saving cost, time, and familial discord on behalf of clients and their beneficiaries in the future.
As we established above, the Banks test requires the Testator to understand the Will itself, the extent of their assets and the claims upon them. In addition, a law practitioner can further assess testamentary capacity in several ways:
If the Testator is elderly or infirm at the time of Will writing, the following steps should be considered:
Obtain contemporaneous medical opinion confirming testamentary capacity
Asking a medical practitioner to witness the Will
In the absence of medical opinion, explain to the Testator that this may heighten the possibility of their Will being challenged successfully on the grounds of lack of testamentary capacity. Ensure they confirm they wish to proceed and make clear notes of the guidance provided and the decisions made by the Testator and attach these records to the file.
If a medical opinion is needed, it is important to request the assistance of a health practitioner with the skills to assess capacity, to avoid the risk of their competence to make this assessment being questioned in a later claim. The client’s GP may therefore not be the best person to make the assessment. It is also essential that the time between the medical opinion being received and the Will being signed be minimised, to avoid any suggestion that mental capacity declined in the intervening period. When instructing the medical expert, subject to your client’s consent, it is also recommended to provide a summary of their proposed testamentary wishes.
If there is uncertainty regarding the mental capacity of your client (i.e. you have doubts but cannot be sure), it may not be in the best interests of the client to draft the Will. Should your client still wish to proceed in light of the risks that the Will may be later deemed invalid, you should record all of the grounds for doubting capacity, that this has been explained to your client, and the reasons they still wish to proceed.
In summary
Given the rise in Will disputes, it is even more essential that law practitioners specialising in Will drafting make no assumptions regarding the cognitive capacity of clients. Proving testamentary capacity is more than a tick-box exercise; rather it is one that requires that Solicitors and Will writers take the time to get to know their clients and to notice the subtle signs that their capacity may be diminished. By being open and transparent about the importance of this aspect of ensuring Will validity, you can ask questions and seek further information to help you make a determination. And don’t assume only those in their later years may lack testamentary capacity. A client who has suffered a head injury, perhaps as a result of a road traffic accident, or fall, may appear young, physically well, and alert, but maybe suffering impaired cognition (e.g. memory or logical reasoning). By broadening our view of what impaired mental capacity looks like, we can ensure the validity of the Wills we draft is not questioned at a later date.

by TWP Main AdminSep 12, 2019

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Influence

BY: Paul / 0 COMMENTS / CATEGORIES: Will Writing

 

A recent ruling by the High Court determined that a claim brought by 3 sons for a share of their mother’s £1 million family home was unsuccessful.

Mrs Rea died in July 2016 at the age of 86 and in her final Will which she made in 2015, she left her South London home, which was her main asset and worth roughly £1 million, to her daughter Rita. It was found she had left a note with her Will which stated

‘My sons do not help with my care and there have been numerous calls for help from me but they are not engaging with any help or assistance. ‘My sons have not taken care of me and my daughter Rita has been my sole carer for many years. ‘Hence should any of my sons challenge my estate I wish my executors to defend any such claim, as they are not dependent on me and I do not wish for them to share in my estate save what I have stated in this will.’

It was found that her 2015 Will replaced an earlier Will in 1986 which had left her entire estate to be shared equally between her 4 children.

The sons who were written out of the mother’s Will, brought a claim on the basis that their sister had “poisoned” their mums mind by claiming the sons had abandoned their mother so that she would solely inherit the family home.

It was relevant that the 3 sons had only been left a very small legacy, which, after funeral expenses would leave them with nothing. On that basis, they had made an application to strike out the 2015 Will and reinstate the earlier Will made by their mother in 1986.

The Court held that there needed to be evidence to show that Rita had “poisoned her mother’s mind by casting a dishonest aspersion on their characters.” On hearing and considering the evidence before them, the Court found there was no evidence to show that Rita had “poisoned her mother’s mind,” rather the sons relied on inference and therefore their claim was unsuccessful. It was noted that Rita had provided extensive daily care to her mother whilst the contribution from her sons was very little. In September 2015 Nino and David (Mrs Rea’s sons) had set up a rota to help with their mother’s care but within a few weeks, it had collapsed.

It was found that Mrs Rea had always had a close relationship with her daughter and a “soft spot” for her. It was her daughter who had moved into the family home to solely care for her during the final years of her life after Mrs Rea had suffered a heart attack in 2009.

On hearing the evidence from Rita, it was found the brothers each had a key to the family home and were welcome to visit as and when they wished to. It was only until late 2015 or 2016 when her relationship with her brothers became strained that the locks were changed.

With regards to the brothers contesting the Will on the grounds of undue influences, it was held Mrs Rea was very strong minded and at the time she made her revised Will, it was clear she knew what she was doing. Whilst English was not her first language, she understood enough to know the implications the change in her Will would have. Therefore, her mind had not been influenced and she made the decision to write her sons out of her Will on her own accord.

This case highlights just how important it is as professional will writers to exercise caution where cases are likely to be contentious and ensuring that detailed attendance notes are kept with your file.

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2000 Homes Per Month Sold To Fund Social Care

BY: Paul / 0 COMMENTS / CATEGORIES: News, Trusts

Almost 2,000 Homes Per Month Sold To Fund Social Care

On average, 1,760 older homeowners per month or 406 older homeowners every week are being forced to sell their homes to fund their social care costs.

According to new research by Independent Age, 21,120 homes were sold in 2018 with the funds being used to pay for the vital care all people should be entitled to as we age.

In comparison, only 11,800 homes were sold to fund similar care in 2000. This represents a 77% increase in family homes being sold to fund the social care crisis in the past 19 years.

In 1999, the Royal Commission made recommendations and suggestions to make care free at the point of use. However, subsequent Labour and Conservative Government’s have failed to solve the problem with recent issues widening as the number of elderly, in need of social care, increased whilst services and funding was cut in real terms.

Since 1999, Independent Age estimated that over 330,000 elderly people have sold their homes, forcing them to move into unfamiliar surroundings before they die, to help fund their care.

Independent Age has also questioned the success of the Government’s Deferred Payment Agreements (DPA) which enabled social care users to defer payments until after they died.

Whilst DPAs were designed to enable more social care users to remain in their homes, the roll out of this scheme has been sporadic and inconsistent.

According to a freedom of information request made by the organisation in July, of the 93 local authorities who responded, less than a third (29)  had accepted all DPA applications.

Worryingly, 7 local authorities had failed to set up a DPA process for the elderly constituents to use whilst 3 local authorities had rejected all DPA applications it had received.

As the social care sector awaits a definitive solution to help alleviate a crisis on the verge of imploding, it is imperative that all social care users are offered the same treatment and the same opportunity to remain in their homes for as long as possible.

Morgan Vine, Campaigns Manager at Independent Age, said: “Our findings show exactly why free personal care is so badly needed.

“Even arranging DPAs – a safety net to prevent people having to sell their homes within their lifetime – is proving to be a postcode lottery and doesn’t address the unacceptable situation where people are still required to spend a catastrophic amount on their care.

“Our Prime Minister has announced his intention to fix the social care system, and it’s crucial that free personal care is part of that solution. Free personal care is an affordable option for the country and is popular with people of all generations.”

  • by Martin Parrin
  • Sep 25, 2019

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The Practicalities of Paying Inheritance Tax

BY: Paul / 0 COMMENTS / CATEGORIES: Inheritance Tax

The Practicalities of Paying Inheritance Tax

The payment of Inheritance Tax on estates would appear to be a growing problem for Personal Representatives. In 2009/10, just 2.7% of estates were subject to Inheritance Tax, whereas in 2015/16, this had risen to 4.2% of estates.

(Source: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/730125/Table_12_3.pdf)

Any impact that the introduction of the Residence Nil Rate Band has had on the percentage of estates subject to Inheritance Tax remains to be seen. I look forward to seeing updated statistics from HMRC to assess the same.

With the above in mind, now is a good opportunity to offer a refresher on the practicalities of payment of Inheritance Tax and to explore the options available in different circumstances.

For some Personal Representatives, the payment of Inheritance Tax can be relatively straightforward. If the estate has sufficient cash in it, the Executors can generally arrange payment through the Direct Payment Scheme and by completing form IHT423. There are some financial institutions that do not participate in the Direct Payment Scheme, though most will offer an alternative way of arranging payment out of the accounts held with them in order to facilitate the payment of the tax due. If the estate does not have sufficient cash but the Personal Representatives do, they can also personally arrange payment of the tax due and later seek to recover this from the estate. This is not a luxury afforded to many Personal Representatives however and there is often no guarantee of when they may expect to recover their personal monies. This can be due either to the current Probate Registry delays, or the nature of the estate assets may mean that it takes some time for the assets to be sold.

I find that for the majority of Personal Representatives, the above is not an option and they find themselves in a situation whereby the estate assets require a Grant of Representation in order to sell the same, but the Personal Representatives are required to first pay the Inheritance Tax due in order to obtain the Grant of Representation. They are therefore left with a number of options and I intend to explore the more common options below.

The first point of consideration is whether the estate can pay the Inheritance Tax due in instalments. The tax payable on the value of land, businesses, shares/securities which gave the Deceased control of a company and on certain unquoted shareholdings can be paid in ten annual instalments. This can mean that only a portion of the total tax due is payable prior to obtaining a Grant of Representation. The instalment option ends upon the sale of the asset(s) for which it was utilised, but of course the sale of the asset ought to give the Personal Representatives sufficient funds to pay the remaining tax due in any event. One often overlooked point with regard to the instalment option is that if the Inheritance Tax Account and supporting calculation is submitted more than one month prior to the due date for payment of Inheritance Tax (being the end of the sixth month following the death), then no instalments technically fall due and a Grant of Representation can be obtained simply by paying the tax due on the assets that do not qualify for the instalment option.

In my experience, most of the value in a typical estate is in assets that qualify for the instalment option and the tax payable on the assets that do not qualify forms only a small portion of the total tax bill. With that said, it is not uncommon for Personal Representatives to require a significant amount of time to collate the necessary information required in order to prepare the Inheritance Tax Account. It is therefore not always possible to get an account submitted more than a month prior to the due date.

It should be noted that outstanding tax payable after the due date accrues interest at a rate of 2.5% above the Bank of England Base Rate. It is therefore not a perfect solution, but one that is often unavoidable.

If the Personal Representatives do not have the means to pay the tax payable prior to the issue of a Grant of Representation even with the instalment option factored in, they are left with two main options (there are more complex payment options available in certain circumstances such as the transfer of land or chattels, but I propose only to address the most common examples).

The first option is to consider using some lending facility. Typically this is in the format of a bridging loan to cover the tax due with the estate assets used as security for the same. Once the estate assets are sold, the bridging loan can be repaid.

The second option is to consider applying to HMRC to release the IHT421 form (being the form required to obtain a Grant of Probate in cases where Inheritance Tax is payable) on a grant on credit basis, where they will generally request an undertaking from the Personal Representatives to pay the tax once they are in funds. This is considered by HMRC to be a last resort, where lending options have been exhausted. With that said, I have typically found HMRC to be fairly relaxed on this point and provided that an undertaking is provided by the Personal Representatives and they can clearly see that all cash assets have been used to make payments on account of the tax due, I have yet to see such an application be refused.

Ultimately, the Personal Representatives would have to weigh up the interest and any other monies payable on any lending arrangement against the interest and any other monies payable to HMRC for late payment of the tax due. Time will however also be a factor, in that I would typically find that most lending facilities can be arranged much quicker than it can take for HMRC to respond to a request for a grant on credit.

In summary, it is clear that payment of Inheritance Tax is a bigger headache for some Personal Representatives than it is for others. It is unfortunate that the current interest charging regime does not distinguish between cases where payment of interest is an unavoidable consequence of the nature of the estate’s assets and cases with apathetic Personal Representatives who have failed to arrange the payment of the Inheritance Tax due in a timely manner.

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Why Establishing Testamentary Capacity Is Not a Tick-Box Exercise

BY: Paul / 0 COMMENTS / CATEGORIES: News

One of the many challenges for legal practitioners specialising in Will drafting is establishing the testamentary capacity of the Testator.  While in some cases, the presence or absence of sufficient mental capacity may be clear, in others, there may be some uncertainty, necessitating a more comprehensive process to reach a consensus.  In the case of James v James [2018] EWHC 43 (Ch); [2018] C.O.P.L.R. 147; [2018] 1 WLUK 252 (Ch D (Bristol)) the High Court was asked to make a ruling on a challenge to a Will based on lack of testamentary capacity, and also outline the factors law practitioners should consider when making a capacity assessment at the time of Will drafting.

James v James (2018)

James v James involved the Will of a man who died in August 2012 at the age of 81.  The Testator had been a successful businessman with a farming and haulage operation in Dorset.  He had been reluctant to make commitments to his family regarding his inheritance until later in his life after his cognitive wellbeing had been in decline for some time.

The Claimant, S, was one of the Testators three children.  In 2007, some of the plots of land owned by the Testator were transferred to one of his daughters, and after the family farming partnership was dissolved, the claimant received a farm, £200,000, the haulage business, vehicles, and a license to use one of the plots, ‘Pennymore’ from which to operate the haulage business.  S, however, had been led to believe he would inherit ‘Pennymore’, leading him to challenge the Will on the grounds of his father’s lack of testamentary capacity.

It was stated that the Testator had not been “as formidable as he had once been” from approximately 2004 and had been diagnosed with “moderate dementia with frontal lobe impairment” in 2011.  The Will had been signed in September 2010, hence close to the time at which the Claimant had been assessed as unable to make decisions “about his health care, where he lives or his finances”.  The High Court held that the common law test for assessing retrospective capacity should be the one set out in Banks v Goodfellow (1870) (Banks), rather than the statutory test set out in the Mental Capacity Act 2005.  Applying Banks, the Testator, should have understood:

  • the nature of entering into the will and its effect;
  • the extent of the property of which he was disposing; and
  • claims to which he ought to give effect

In addition, Banks requires the Testator have “no disorder of the mind that perverts his sense of right or prevents the exercise of his natural faculties in disposing of his property by Will”.

The Court held the Testator did have the capacity to enter into the Will.

This case is significant as it underpins the continued importance of Banks as the sole test for judging Will-making capacity in retrospect, and despite being a case from 1870, has not been superseded by the more recent Mental Capacity Act 2005, which contains a new legal provision for the assessment of mental capacity.

Assessing testamentary capacity at the time of Will writing

The importance of verifying the mental capacity of a Testator should never be underestimated.  Ultimately, by undertaking this process in a clear and concise manner, contentious probate can be avoided, saving cost, time, and familial discord on behalf of clients and their beneficiaries in the future.

As we established above, the Banks test requires the Testator to understand the Will itself, the extent of their assets and the claims upon them.  In addition, a law practitioner can further assess testamentary capacity in several ways:

If the Testator is elderly or infirm at the time of Will writing, the following steps should be considered:

  • Obtain contemporaneous medical opinion confirming testamentary capacity
  • Asking a medical practitioner to witness the Will
  • In the absence of medical opinion, explain to the Testator that this may heighten the possibility of their Will being challenged successfully on the grounds of lack of testamentary capacity. Ensure they confirm they wish to proceed and make clear notes of the guidance provided and the decisions made by the Testator and attach these records to the file.

If a medical opinion is needed, it is important to request the assistance of a health practitioner with the skills to assess capacity, to avoid the risk of their competence to make this assessment being questioned in a later claim.  The client’s GP may therefore not be the best person to make the assessment.  It is also essential that the time between the medical opinion being received and the Will being signed be minimised, to avoid any suggestion that mental capacity declined in the intervening period.  When instructing the medical expert, subject to your client’s consent, it is also recommended to provide a summary of their proposed testamentary wishes.

If there is uncertainty regarding the mental capacity of your client (i.e. you have doubts but cannot be sure), it may not be in the best interests of the client to draft the Will.  Should your client still wish to proceed in light of the risks that the Will may be later deemed invalid, you should record all of the grounds for doubting capacity, that this has been explained to your client, and the reasons they still wish to proceed.

In summary

Given the rise in Will disputes, it is even more essential that law practitioners specialising in Will drafting make no assumptions regarding the cognitive capacity of clients.  Proving testamentary capacity is more than a tick-box exercise; rather it is one that requires that Solicitors and Will writers take the time to get to know their clients and to notice the subtle signs that their capacity may be diminished.  By being open and transparent about the importance of this aspect of ensuring Will validity, you can ask questions and seek further information to help you make a determination.  And don’t assume only those in their later years may lack testamentary capacity.  A client who has suffered a head injury, perhaps as a result of a road traffic accident, or fall, may appear young, physically well, and alert, but maybe suffering impaired cognition (e.g. memory or logical reasoning).  By broadening our view of what impaired mental capacity looks like, we can ensure the validity of the Wills we draft is not questioned at a later date.

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Funeral Plan – Its never to soon

BY: Paul / 0 COMMENTS / CATEGORIES: Funeral Plans

 

It’s never too soon to start saving for your retirement, they say. But is it ever too soon to start planning your funeral? If it is, the journalist Lauren Windle from the Sun newspaper hasn’t been put off. She only twenty-eight now, but she’s been planning her funeral since she was twelve.

Why did she start so young? She says it was her father. Whenever she had a minor complaint in childhood – like being stopped from eating sweets before a meal – her father would remind her of what lay ahead. There were two things she would be unable to avoid as a grown-up. First she would have to pay taxes; and then, sooner or later, she would die. I’m glad my father didn’t tell me the same. Those are serious thoughts for a child, but maybe they’re useful ones too.

Life can’t be fun for ever. And life can’t last for ever. That was a lesson that Laura absorbed early and that’s why she began thinking about what she wanted her funeral to be like. In short, she began a funeral plan. The first thing on her mind was the music. What song should be played to sum up her life and bring a tear or a smile to the mourners? At the age of twelve, she liked a ballad called “There You’ll Be” from the movie Pearl Harbor. It was full of emotion and power – a perfect way to say goodbye.

Or so she thought at the age of twelve. But our tastes change as we get older. Later she thought she might like Frank Sinatra’s “I Did It My Way” instead. It’s a very popular choice as a funeral song – many thousands of people have sent that defiant message to the world as they left it. But what about something quirky? Laura later decided on the Bee Gees’ “Stayin’ Alive” as a her funeral song. That would raise a smile, wouldn’t it?

Or maybe not. Her choice of song kept changing. At the moment it’s “See You Again” by Wiz Khlaifa, another emotion-filled song from a movie. It was played in Fast & Furious 7 to honour Paul Walker, the star of the franchise who had died in a car-crash in Los Angeles. But it’s more than likely than her choice of funeral song will change again. After all, she’s still only twenty-eight and she might live to be a hundred or more.

Or she might have an accident and pass away much sooner. Like most people, she has no idea when she’ll go and she wants to be prepared. Beside music, she’s also planning the food for her funeral. If her funeral plan as a whole was inspired by her father, her choice of food is influenced by her mother, who has an interesting story about her university days. She studied science and one day, working in the laboratory, she accidentally breathed in what she thought was a deadly gas.

“In an hour or two I’ll be dead!” she thought. But she wanted to have lunch first. With no future ahead of her, or so she thought, she chose an expensive prawn sandwich rather than the cheaper egg mayo she usually had. She didn’t die, of course: she married and had a daughter called Laura. And Laura, having heard her story about the poisonous gas and the prawn sandwich, decided that prawn sandwiches would be the perfect accompaniment to a real funeral.

For one thing, it’s a good family joke. And there’s nothing wrong with that. A funeral plan can have humour in it, if that’s what you want. The choices are yours, because it’s your funeral. But it’s a good idea to discuss your ideas with your nearest and dearest, even if you want to keep a few surprises up your sleeve. Laura Windle may be doing that in another part of her funeral plan: the message she’s recorded to be played when the mourners are gathered in church.

She wants to tell them that she loves them and that they meant the world to her. But her funeral message, like her choice of song, may be updated again and again as she gets older. Life brings us new experiences and we change our minds. A funeral plan doesn’t have to be set in stone. It’s likely, though, that we will be more and more satisfied with it as we get pass our middle years and into old age. At the age of twenty-eight, Laura Windle is having fun her funeral plan. As she gets older, she will begin to gain comfort from it. The funeral plan will allow her to have some control over something that none of us can control: the fact of our mortality.

We can’t choose to live for ever and when we have a funeral plan we have faced the end of life and decided how we want to be remembered. With a funeral plan, we can save money, enjoy peace of mind, and lift an enormous burden from our loved ones. They won’t have to make decisions about our funeral because the decisions will already have been made.

PLEASE CONTACT E.M.P Solutions for information pack

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