Wills Archives - MLP Law

Why should I use mlplaw instead of making a DIY Will?

Why should I use mlplaw instead of making a DIY Will?

Legal Expertise

Our team of solicitors have a wealth of knowledge in Wills, Trusts and Probate law to ensure your Will is legally binding and suits your requirements and circumstances. We can provide valuable advice on estate planning strategies to minimise taxes, protect your assets for your loved ones, and if you have complex personal circumstances, ensure your wishes are met.

Avoiding Risks

If your will is not drafted by a solicitor, there are risks involved. Wills that are not drafted properly can lead to confusion, disputes, and even legal challenges after your passing. By working with a solicitor, you can minimise the risk of errors or ambiguities that could invalidate your will or lead to unintended consequences.

Accounting for Changes in Circumstances

Personal and financial circumstances can change over time, such as marriage, divorce, birth of children, or acquisition of new assets. A professionally drafted Will can prepare for these future changes in circumstances to avoid the cost of having to regularly prepare new Wills.

Peace of Mind

Knowing that your will has been professionally drafted and legally sound can provide peace of mind for you and your loved ones. It can also help alleviate potential stress and conflict among beneficiaries in the future.

Why a £59 Facebook Will Isn’t the Answer

“You are too expensive – I can get a Will for £59 on Facebook.”

Perceptions needs to change. A will should not be cheap – you do not want it to be cheap. 

This is a document that dictates who the guardians of your children are and who cares for them if you are not here.  Think about that.  This is a document that deals with every single item that you own. Think about that.   

Your house, your car, your jewellery, your investments, your money in the bank, your shares in the business… EVERYTHING. Think about what they mean to you and how hard you have worked to achieve them.  Do you still want your Will to be cheap?

Every family is different, every situation is different and what each person needs in their will is different – it is bespoke to you, your family and your personal situation. 

Your Will is an investment. The upfront expense saves cost and heartache later.  

Inheritance tax efficient save hundreds of thousands of pounds, care home fee efficient will save hundreds of thousands of pounds, trust wills protect your entire wealth.  

Cheap usually means it’s prepared by someone who isn’t legally qualified, is not regulated, cannot advise on tax, sells you things you do not need or that do not work and is not insured.  

So what are you paying for? 

Bespoke advice tailored to you which includes inheritance tax advice and advice on mitigating this.  Business property and agricultural property advice and advice on mitigating exposure.  Advice and assistance on income tax, capital gains tax, ensuring property is owned in the correct way so it goes exactly where you want when you are not here.  Making sure your business goes exactly where you want when you are not here.  Protecting you estate from attack from third parties.  You are dealing with experienced qualified insured lawyers who understand you and your family inside out.  

To book an appointment, contact the team via wtp@mlplaw.co.uk or for further information visit https://www.mlplaw.co.uk/wills/

 

Challenges in Probate: Defending a contested Will

The legal process of administering an estate after someone passes away, can often become a complex and emotionally charged undertaking, particularly when faced with contested wills. The challenges that arise during these disputes can test the boundaries of family relationships and legal frameworks. In this article, we explore some of the common challenges encountered in probate and offer insights into effectively defending contested wills.

  1. Undue Influence and lack of capacity: A frequent challenge in defending contested wills is the allegation of undue influence or the claim that the deceased lacked the mental capacity to make rational decisions. Family members or interested parties may argue that the deceased was coerced into altering their will, or that they were not of sound mind when the will was created. Establishing the mental capacity of the testator at the time of drafting the will becomes crucial in such cases.
  2. Ambiguous wording and interpretation: Ambiguities in the language of a will can lead to disputes among beneficiaries. Vague or unclear terms may give rise to differing interpretations, causing family members to contest the distribution of assets. Resolving these issues often requires a careful examination of the testator’s intentions, considering the context and potential external influences.
  3. Family dynamics and disputes: Inheritance disputes often expose underlying family tensions and rivalries. Sibling rivalries, blended family dynamics, or disputes arising from unequal distribution of assets can complicate the probate process. Mediation or legal intervention may be necessary to guide through these familial challenges and find equitable resolutions.
  4. Forgery and fraud claims: Individuals may allege that the will is fraudulent or that signatures were forged. Proving or disproving such claims involves forensic analysis and careful examination of the authenticity of documents. Adequate documentation and witnesses become pivotal in defending against accusations of forgery or fraud.
  5. Executor’s role and conduct: The actions of the executor play a crucial role in the probate process. Challenges may arise if beneficiaries perceive the executor as acting against the testator’s wishes or in a manner that lacks transparency. Clear communication, adherence to legal obligations, and ethical conduct are essential for executors to successfully defend the probate process.

Defending contested wills in probate requires a delicate balance of legal expertise, empathy, and understanding of complex family dynamics. As these challenges can lead to emotional strain and protracted legal battles, seeking professional advice early in the process is often key. By addressing the issues of undue influence, ambiguous wording, family disputes, potential fraud, and executor conduct, individuals involved in probate can work towards a fair and just resolution, preserving the intent of the deceased and minimizing conflict.

Seeking Legal Advice

Our team understands the sensitive nature of probate and emotional challenges that can arise during such times. We are committed to guiding you through each step of the process, providing clarity. Whether you are an executor trying to fulfil your responsibilities or a beneficiary seeking to defend your rights, out team can provide comprehensive support and guide you through the process, working towards a resolution.

Avoiding Common Pitfalls in Estate Planning

In order to avoid common pitfalls in estate planning, it is essential to take expert advice and our team at mlplaw are ideally placed to offer you tailored advice to ensure your estate planning is undertaken effectively and efficiently. Here, we detail the most common pitfalls made in estate planning.

 

  1. Pitfall One – Not Making a Will

A Will is the most important estate planning document that you should have in place, whether you are married, single, have children or not. A Will is the only document which deals with the whole of your estate (barring some assets such as pensions or life policies) and how it will be transferred following your death. The value of a Will should not be underestimated and the time and cost devoted to its preparation should reflect its importance and value. Ensure you review your Will regularly.

 

  1. Not Taking Proper Advice as to Inheritance Tax

When seeking advice regarding your Will, it is also important to consider the tax implications to give effect to your wishes in the best interests of your intended beneficiaries. Do not undervalue this exercise or cut corners. A well drafted will ensures your estate can take advantage of all available tax reliefs.

 

  1. Make Proper Provision for Blended Families

Second and third marriages are no longer uncommon, creating difficulties where there are children from the previous relationships which each party to the marriage wishes to ensure benefit from their share of the estate whilst also ensuring that the surviving spouse can continue to occupy the family home and receive the income they need. Where Wills do not fully appreciate and understand the complexity of these arrangements, the result can be that the children of one party to the marriage miss out on what would otherwise be their share of the estate, and this can lead to expensive claims and litigation over the administration and distribution of the estate later. Once again, careful estate planning and a well-prepared Will should help to avoid those consequences.

 

  1. Asset Protection

The desire to keep things simple must be weighed against the need to provide the protection that beneficiaries require. Where a potential beneficiary of your estate is young or disabled or not able to manage their money, there are ways in which the estate can be protected for their use and benefit by using the appropriate forms of trust. Trusts can also offer protection in the longer term against the possibility of a beneficiary divorcing at some point in the future and also lead to longer term IHT savings for the family.

 

  1. Family Disputes

If you are intending to exclude a close family member from a Will, or to leave your estate in unequal shares between your children, then it is essential to take professional legal advice as to the possibility of post-death claims and how to take steps to try prepare for such claims by  the careful drafting of your Will and any ancillary statement of reasons.

To ensure you avoid the above pitfalls and that your estate is planned to provide for your chosen beneficiaries please contact wtp@mlplaw.co.uk or call on 0161 926 1538 to speak with one of our experienced and friendly lawyers.

Estate Planning Essentials: Protecting your assets for future generations

Estate planning is a vital component of financial management, often overlooked until it becomes a necessity. It is the process of organising and managing your assets, investments, and financial affairs to ensure that your wealth is protected and passed on to your loved ones, according to your wishes, in a way which maximises tax liabilities. Spending some money now on professional fees may save you hundreds of thousands of pounds in the long term.

Make a Will

We cannot stress enough how important it is to obtain legal advice and put a professionally drafted Will in place. A Will ensures your estate is distributed as per your wishes and can include Inheritance Tax planning.

Create Lasting Powers of Attorney

Who can access your bank accounts if you loose capacity? Who will decide where you live if you are unable to make that decision yourself?

These issues can easily be dealt with by creating Lasting Powers of Attorney (LPA), a document in which you appoint people you trust to act in your capacity to make important decisions on your behalf should you loose capacity.

There are two types of LPAs, a Property & Financial Affairs LPA and a Health & Welfare LPA. An LPA allows you to make provisions, in advance of deterioration of health, to ensure that your affairs are properly dealt with by someone you trust.

Inheritance Tax Planning

Inheritance Tax is the highest rate of tax in the UK, charged at 40%.

Every individual is entitled to a Nil Rate Band of £325,000.00 upon their death, meaning Inheritance Tax is only payable on assets over this amount.

But please don’t panic, there are ways to reduce the amount of tax payable:

  • Own your own home! If you own your own home, you can make use of the Residence Nil Rate Band which provides an additional allowance of up to £175,000.00 on top of the £325,000.00.
    *There are some additional requirements to obtain the Residence Nil Rate Band.
  • Get married! If you are married there is no Inheritance Tax payable on first death, and on second death you are able to transfer the unused Nil Rate Band from the first death, which is an additional £325,000.00. You can also transfer an unused Residence Nil Rate Band from first death too, which is a further £175,000.00.
  • Give away your cash! Take advantage of the annual gift exemption, which allows you to gift up to £3,000.00 to your loved ones each year.
  • Invest and trust wisely! Tax efficient investments, pensions, trusts and lifetime settlements can also help protect your wealth.

Care Planning

It’s crucial to think about the cost of care when dealing with your estate planning, which can be significant in some instances. Various options, such as Will Trusts, can be explored to address this issue.

Regular Reviews

We recommend you review your estate planning every 3 to 5 years, or when there is a change in your financial or personal circumstances or those of your loved ones. The law also may change and impact your estate planning, and you may need a professional to advise you on these changes.

The Power of Planning: Understanding Trusts in Wills and Lifetime Trusts

Trusts can seem a daunting prospect to clients when considering estate planning, however, our expert team at MLP Law can help to clarify and explain in straightforward terms the pros and cons of entering into a trust arrangement, whether that be in your will or a lifetime trust.

Certainly, the taxation landscape around trusts can be a minefield so it is crucial to seek expert legal and taxation advice when considering trusts and how they can help you to plan your estate. If used correctly and at the right time, a trust can save you considerable sums in tax and also offer protection and support for your chosen beneficiaries in the long term.

A trust is a legal arrangement that can give you control over what happens to your financial assets both during your lifetime and when you die.

Trusts can protect your assets from inheritance tax and care home fees. However, different kinds of trusts have varying financial and practical implications, so the first step in setting up a trust is to seek tailored legal advice.

There are two main types of trusts you might consider: a Lifetime Trust, which you set up during your lifetime; and a Will Trust, which is created upon your death. Here we talk about the advantages and disadvantages of both.

Who are the parties in a trust?

When you set up a trust, you are known as the ‘settlor’. You will choose a third party (‘trustee’) to manage your assets for the person you wish to benefit from the trust (‘beneficiary’). You can choose more than one trustee and more than one beneficiary. Here we discuss the legal terms used to define the parties involved.

Settlor

This is the person or the company who sets up the trust. They can also be called the donor, grantor, trustor or trust-maker. The settlor makes the decision about how the assets in the trust should be used and this is set out in a legal document called a ‘trust deed’. Once the assets are in trust, the trustee—not the settlor—legally owns them (although the trustee is bound by law to make sure the beneficiaries receive the benefit of the trust). It’s important to know the trustee well before appointing them. In some kinds of trust, the settlor is also the trustee and/or the beneficiary.

Trustee

A trustee is a person or company who manages the trust’s assets for the benefit of the beneficiaries. Their duties are set out in the trust deed. Trustees must not benefit personally from their role unless they hold the trust in a professional capacity and receive a fee for their service.

It’s the trustee’s role to manage the trust prudently according to the settlor’s wishes by investing assets wisely (if applicable) and paying any taxes due. They must also keep accurate accounts and records, which are completely separate to their personal finances. Trustees can be held personally responsible for any breaches, so it’s important that they follow the advice of an experienced private client lawyer and fully understand their responsibilities.

Trustees can be removed or replaced by settlors or beneficiaries in certain circumstances, but this depends upon the type of trust and the terms of the trust itself.

Beneficiary

A beneficiary is a person who will benefit from the assets in the trust.

If the trust set up is a ‘revocable’ trust, which means the settlor can change it or revoke it at any time, the beneficiary (unless they are also the settlor) has no rights until they receive the assets from the trust. ‘Revocable’ trusts, by their very nature, must be Lifetime Trusts (see below).

If the trust is ‘irrevocable’, meaning it cannot be changed by the settlor without a court order, then the beneficiaries have certain rights before the trust is redeemed. They can make sure the trustee is acting in their interests by asking to see records and accounts. The full scope of their rights depends upon the terms of the trust.

What is a Will Trust?

A will trust or ‘testamentary trust’ is only created upon death. You set up the trust as part of your Will in order to pass assets on to your family or loved ones.

There are different types of Will Trusts.

Discretionary Trust

This trust gives the trustees the discretion to decide which of the Will’s beneficiaries to pass trust assets on to, how much they will receive, and when they will receive it. This protects a beneficiary’s money if they are financially unstable for any reason and it means money does not have to pass to a beneficiary who has become wealthy.

Property Protection Trust

A property trust helps to protect property from being used to pay for long-term care fees. For this kind of trust to work, you and your partner or spouse must own the family home in joint names as tenants in common.

Each partner sets up a Will with each of you leaving your share of the property in the property trust. When one of you passes away, that share of the property passes into trust. Then if the survivor needs long-term care in the future, only their share is used by the local authority for a means-test when calculating contributory fees, because the other share is protected in the property trust. The protected share will eventually pass to the Will beneficiaries.

Flexible Life Interest Trust

A life interest trust allows you to specify who will have the rights to your property after you die. It’s very similar to a property trust in that it offers protection from home care fees. The main difference is that a life interest trust protects all your assets and not just your property. It also enables you to choose somebody to benefit from the trust whilst they are alive and at the same time to protect the underlying capital for other beneficiaries after their death.

Your chosen beneficiaries can have access to capital sums as agreed by the trustees

What is a Lifetime Trust?

Lifetime trusts are different from Will trusts because they are established straightaway and not upon death. You may however have to pay an immediate inheritance tax charge of 20% on the value of trust assets transferred into trust and in excess of the nil rate band (currently £325,000).

Bare Trust (or Simple Trust)

Assets in a bare trust are held by a trustee until the beneficiary is 18 years old (it’s also possible to state that the beneficiary will receive these at a different age, such as 21 years). Once the beneficiary turns 18 they have the right to all the income and capital of the trust immediately. Beneficiaries are liable for Income Tax and may be liable for Capital Gains Tax. However, they are likely to be exempt from inheritance tax as a bare trust is treated as a ‘potentially exempt transfer’. This means that inheritance tax will only be payable if the settlor dies within seven years of setting up the trust.

Interest in Possession Trust

This type of trust is similar to a life interest trust (see above) except that the beneficiary can receive income from the trust as soon as the trust is set up.

Discretionary Trust

These can be established in the lifetime as well as by Will.

Settlor-Interested Trust

Settlor-interested trusts are not trusts in themselves. They are any type of trust in which the settlor, their spouse or civil partner benefits from the trust’s assets in any way.

For example, if Fred has an illness and can no longer work then he might decide to set up a trust. Fred is the settlor of the trust and the trustees make payments to him. Since he receives benefits from the trust he ‘retains an interest’.

The settlor is liable for income tax on all payments made by the trustees and may also be liable for Capital Gains Tax. When the settlor dies, inheritance tax will be payable above the £325,000 tax-free threshold.

Vulnerable Beneficiary Trust (or Disabled Trust)

These trusts are set up for beneficiaries who have a mental or physical disability or who are under 18 years of age and have lost a parent. Vulnerable beneficiary trusts can claim ‘special tax treatment’ as long as the beneficiary qualifies under HMRC rules and the circumstances of the trust allow. Broadly speaking, ‘special tax treatment’ aims to tax the beneficiary’s proportion of the trust as if their usual rates, reliefs, and allowances are applied so that they gain maximum financial benefit.

Assets of other beneficiaries of the trust who are not classed as vulnerable must be kept separate for tax purposes.

When planning your estate, you want to make sure the people you choose will inherit your assets according to your wishes, that you minimise inheritance tax losses, and that your entire property isn’t lost to home care costs. Trusts can achieve your aims, but it’s important to select the right one for your particular needs and circumstances.

A trust can be set up at any time or written into your Will. At MLP Law Ltd our specialist trust and Will, solicitors are here to help you protect your assets both now and in the future. Call us on 0161 926 1538 to discuss your options and how we can help.