Living Wills

A Living Will (sometimes known as an Advance Decision or Advance Directive) ensures that others, including doctors, know your wishes about your health and care. A Living Will would only become relevant at a time when you could not make, or communicate, decisions for yourself. It allows you to document all your wishes regarding your health and welfare and it
gives you the right to refuse treatment – even if this could lead to your death.

A Living Will is a legally binding document, meaning that those caring for you MUST follow your instructions. The document can be as detailed as you wish, and as well as covering life sustaining treatment, it can also include information regarding any medical treatment that you DO NOT want, where you would prefer to live, and any relevant information on diet and
lifestyle.

A Living Will does not allow you to nominate someone else to make decisions on your behalf. At A R K we recommend that you make a Health & Welfare Lasting Power of Attorney (LPA) at the same time as you make your Living Will.

A Living Will, in conjunction with a Health & Welfare LPA and possibly also a ‘Do not resuscitate’ order which you make via your GP, will give you complete peace of mind that your wishes would be adhered to, should you become incapacitated.

At A R K we are happy to take your instructions and prepare your Living Will for you.
Currently due to the Covid-19 restrictions in place, this will be by telephone or video call only. We will then prepare and send you a draft copy to approve, before preparing the final document which we will post out to you. You will then need to sign it and get it witnessed by two people in accordance with the usual Will signing guidelines.

We advise you to discuss your wishes with your family where possible, and if you are making a Health & Welfare LPA or already have one in place, you should also advise your attorneys that you have made a Living Will.

Health & Welfare Lasting Powers of Attorney (LPA)

A Health & Welfare LPA allows the person or persons appointed (called the attorneys) to make decisions on your behalf about your health and welfare, if there comes a time when you are unable to make those decisions for yourself. Health and welfare decisions could include decisions regarding appropriate medical treatment, about where you live, your day to day care plan – including your diet, and any other care needs you might have. It can also give your attorneys the right to have a say about life sustaining treatment should that become necessary.

A Health & Welfare LPA can work in conjunction with a Living Will if you have already made one. If you do not have a Living Will, it is a good idea after you make your Health & Welfare LPA to discuss it with your attorneys to make sure they are familiar with your wishes, or you may wish to include a letter of wishes with your LPA to guide them if it becomes necessary.

To make a Health & Welfare LPA contact A R K and we will guide you through the simple process. We will take your instructions (currently due to Covid-19 restrictions, this would be by telephone or video call) and then we will prepare the documents for you and send them out to you and your attorneys for signature. Before an LPA can be used, it must be
registered by The Office of the Public Guardian. We can submit LPAs for registration on your behalf (and we do not charge extra for completing the application paperwork). There is an additional fee charged by The Office of the Public Guardian which is currently £82 per LPA (this can be less if you are on certain means tested benefits or if your annual gross income is
less than £12,000). Once an LPA has been formally registered it is ready to be used whenever you may need it.

A Health & Welfare LPA gives you and your family peace of mind that you would have someone acting in your best interests if you became very unwell; someone who knows and cares about you, and who would be able to advise medical professionals to ensure you would be looked after the way you would want to be.

A R K Covid-19 Update

An update from A R K team from home during Covid-19.

All appointments are taking place remotely via phone, WhasApp, Zoom & Skype. After the appointment the process is the same: draft Wills are sent via email, and once they are approved we prepare the final version to be send via post. This is the same with Lasting Powers of Attorney. All pages that need to be signed can be posted.

The main challenges we are seeing are with documents that need to be witnessed – Wills have to be witnessed by two independent people, making it difficult during lockdown as you cannot use members of your household.

This is possible for most people with neighbours standing at a distance or watching through windows, and where it hasn’t we have been able to go out to people and deliver documents (combining this with our daily exercise!)

We’re also still networking weekly with BNI and Women in Business via Zoom, and are continuing to support our 4 charities with small cash donations. Additionally, we’re now able to offer discounted Wills to NHS staff at Lister Hospital, The QE2 and Hertford Hospital, as well as for Garden House Hospice, with £20 per document donated to their associated charities.

Based in Stevenage, we’re here to help those locally – and now further afield. We hope you are keeping safe.

Business LPA

Do you know everything you need to do to protect yourself if you are a business owner?

We find that many of our clients with small businesses do not realise they may need a Lasting Power of Attorney (LPA) specifically for their business. The person who they would want to run their business if anything happened to them and they became mentally incapacitated, is not necessarily the same person who would look after their personal affairs. Contact us for more advice regarding protecting your business. Do you realise, for example, that even jointly held business bank accounts would all be frozen if you became incapacitated?…

We find at A R K that a lot of our clients who make personal Finance & Property Lasting Powers of Attorney (LPAs), really should consider having a Business LPA as well. For example you might have a spouse or children who you would want to act on your behalf for personal finance issues, so you appoint them as attorneys on your Finance & Property LPA; but if you have a business, would they be the best placed to carry on your business on your behalf if you became incapacitated? They may be, but if you have a partner in your business or work very closely with someone, then it may be that it would be more logical to appoint them as your business attorney. This would put less stress on your personal attorneys and would ensure that your business could continue to run smoothly.

The huge benefit of a LPA for business is peace of mind. For you, your family and your business colleagues. If you lose mental capacity, without having made an LPA, nobody could access your bank accounts (business or private) even if they are joint accounts. They would be frozen and can only be unfrozen once a Deputyship Order is made. This is obtained from the Court of Protection – it can take many months, even for simple cases, and it’s a costly process as well. For more advice please see our Business LPA fact sheet.

It’s also very important to include your business in your Will. You need to make it clear in your Will what you would like to happen to your business after your death. For example; would you want it to be sold? or carried on according to instructions within your Will? You might need to appoint a separate business executor as well. We are happy to advise regarding all these issues. Contact us if you would like any advice regarding Business LPAs.

Inheritance Tax

Inheritance tax (IHT) – Are you aware of the new IHT thresholds from the 6th April 2020?

Are you aware of the new IHT thresholds from the 6th April 2020? and are you making the most of the gifts you can make to family and friends to reduce your IHT liability? Would you like to know more about the new rates and what gifts you can make to family and friends to reduce the potential IHT liability on your estate?…

The IHT thresholds/Residence Nil Rate Band (RNRB) are changing from 6th April 2020. From that date the basic threshold remains at £325,000 per person, but the RNRB increases to £175,000 (It is currently £150,000). The RNRB only applies if you have property and are leaving it to direct descendants ie. your children (this includes adopted, foster or stepchildren) and grand-children or great grand-children. This brings the total exemption per person, if you qualify for RNRB, to £500,000.

If you are leaving everything to your partner and you are either married or in a civil partnership, then in most cases there will be no IHT to pay on first death. The surviving partner is then allowed to use both tax-free allowances, providing the first spouse to die did not use up their IHT allowance by giving away a large amount of money in their Will to other family and friends. This means that a couple can usually leave a total of £1million without any IHT needing to be paid.

To summarise: Here are some of the key points regarding Inheritance Tax –

  • The basic threshold is £325,000 per person. If the total value of your estate, including property, is below that limit, IHT will not be due. Anything over the threshold is taxed at 40% in most cases.
  • If you are leaving property to your direct descendants then, as explained above, there is an additional RNRB of £175,000 available.
  • You can gift up to a total of £3,000 per annum in total without any implications for IHT. This can be to one person or a number of different people.
  • You can gift larger amounts but would need to live for 7 years after making the gift for it to be entirely IHT free (it is treated as your asset in decreasing percentages as the years go on).
  • You can give as many gifts of up to £250 each per year to your family and friends as you like. Although not to anyone who has already received a gift of your whole £3,000 exemption.
  • Each tax year you can also give wedding or civil ceremony gifts of up to £1,000 per person. This increases to £2,500 for a grandchild or great-grandchild and £5,000 for a child.

You can also make gifts to charities and political parties and these are IHT exempt. For more information on IHT see our dedicated page here or contact us at A R K.

Will storage

Will Storage – Do your family know where your Will is stored?

Last year 9000 Wills were found by Lloyds Bank in a storage unit that they did not know about! This means that many estates may have been distributed incorrectly. To ensure this does not happen to you, consideration should be given to how you store your Will. Please contact us at A R K for advice. We can ensure safe storage of your Will or if you wish to store at home, we can advise you how best to do this….

Being able to safely store and easily locate your Will could mean the difference between having a legally valid Will that can be accessed and used right away, or officially dying “Intestate” – meaning that there was no Will, or that no Will could be found. The issue of a missing Will can create a lot of problems for families, and the situation often causes unpleasant disputes between family members which can last for many years.

So, what are your options when thinking about storing your Will, and what are the benefits and drawbacks of each option?

Keep your Will yourself – the benefit to this option is that it is completely free, however there are lots of risks attached to doing this. Your Will could be damaged by flood or fire; it could be lost if for example you move home, or even get thrown away by mistake. One of the key considerations is whether your family or executors would know where to find it. If you do choose to keep your Will yourself, you should tell your executors where you are keeping it and we recommend you store it in a fire safe box.

A R K Lasting Powers & Wills can arrange storage for you – there will be a small yearly charge to facilitate this. We offer an alternative to home storage to give our clients peace of mind, knowing that their Will is safe and secure. It will only be released from storage either when the person who has made the Will requests it, or on production of a death certificate after they have passed away.

To give you further peace of mind that your Will cannot be lost, misplaced or ignored on your death, you can also have it registered with Certainty, The National Will Register. There is a small one-off fee for this service (currently £30 per Will). There are over 7 million Wills registered with this service. Certainty Will Registration is proven to protect the Testator’s beneficiaries by ensuring their Will can be found. Certainty does not disclose the existence of a Will until after death, and do not need to see a copy to register it. The register simply records the fact that you have made a Will, and where it is being stored. A R K can register the existence of your Will on your behalf.

Contact us if you need more information regarding Will storage.

Pre paid funeral

Are Pre-paid Funeral Plans a good idea?

At A R K we are increasingly finding that clients of all ages are buying our plans. Our oldest client is 103 and we have many younger clients in their 40s and 50s. Plans vary in price depending on what they include, but the average price of a plan is around £3,500. Based on the funeral costs we are seeing locally, that amount seems competitive even at today’s rates.

The plan will cover everything you’ve paid for – whether you only live a few months after you purchase the plan, or hopefully for another 50 years! It could save your family many thousands of pounds as funeral costs are rising rapidly. In previous decades costs have practically doubled every ten years. Work out what a £4,000 funeral today (that’s the average cost) might be in 30 years. A very scary sounding figure!

A Funeral Plan will give you peace of mind that your loved ones will know your wishes, and they won’t have to find monies to pay for your funeral as this will all have been taken care of. One simple phone call is all that would be needed to set the wheels in motion.

We were very pleased to see that Dignity Funeral Plans have introduced a ‘Price Promise’ recently. This amazing concept means that if you are paying for a plan by instalments (periods up to 25 years are available), and you pass away any time after paying 12 instalments, you will still receive the funeral you wanted. Your family will not be asked to pay remaining instalments.

It makes a Funeral Plan a bit of a no-brainer if you are 50+. You know at the outset the maximum amount you will pay, and even if you are unlucky enough to pass away before you make the final payment, you’ll know that everything will have been covered for a very reasonable sum.

Please contact us for more information or view our Funeral Plans information.

Probate Fee increase update

The good news is that the government’s plans to increase Probate fees drastically were dropped last year. However, there are likely to be increases in the not too distant future. Currently the cost of obtaining Grant of Probate has a flat rate fee of either £155 if a solicitor or specialist submits the application, or £215 if a non-professional submits it. The fees are the same for all estates, however much they are worth. The planned increase would have meant fees being charged on a sliding scale depending on the value of the estate – with a massive £20,000 being due on the largest estates!

The professional application fee does not cover fees a professional company will charge for their assistance. Dealing with Probate and the associated court application can be very intimidating, stressful and time consuming – couple this with coping with the grief of losing a loved one and it can all feel like too much to bear. We can assist you with Probate, by providing as little or as much help as you need. We can take over the whole process, and work with our partner solicitors, or we can help you by completing the complicated court paperwork to apply for the actual Grant of Probate. We will give you as much free advice as you need at this difficult time – even if advice is all you need, and we’ll agree a fixed fee if you do decide you want us to help further. You will have no nasty surprise bill at the end of the process. Remember simple estates do not always need Grant of Probate. If you are unsure whether Probate is necessary or if you need further advice, then please do contact us at A R K.

Opposite-sex civil partnerships – why might it be important for you as far as Inheritance Tax is concerned?

For those that do not want to get married; but would like the same protection financially and legally as a married couple, then the new Opposite-sex civil partnership laws that came into effect on 1st January 2020 could be for you. This will mean that couples registering and undertaking an opposite or same-sex civil partnership will be exempt from Inheritance tax in the same way as a married couple would be.

The basic Inheritance tax threshold is £325,000. In the case of a married couple, and from 1st January 2020 a civil partnership, Inheritance Tax isn’t usually paid when the first one dies. Often everything passes to the survivor, and Inheritance Tax will then be due on the couples’ joint wealth when the second one dies.

In April 2017 a new tax relief was introduced. It can only be claimed against the estates of homeowners who are ultimately leaving their home to their children, stepchildren or grandchildren. It is called Residence Nil Rate Band and the current value is £150,000 (rising to £175,000 on 6th April 2020). Overall, this means that no Inheritance Tax will be due on the estate of a couple who own a property which they are leaving to their descendants unless the total value of the estate is over £950,000 (£1million from 6th April 2020). Anything over the Inheritance Tax threshold is taxed at 40%. If you believe Inheritance tax may be due on your estate when the time comes, we can advise regarding gifts you could make to reduce your estate value.

Look out for more information regarding this on our next newsletter or ask us for our handy factsheet. It may also be a good idea to speak to a Financial Advisor for advice as it may be possible to reduce the potential Inheritance Tax bill. If you would like us to recommend someone for you to talk to about this issue, please get in touch.

To sign up for our newsletter please contact karen@arkpowers.com

Who do I choose to be an Executor in my Will?

One of the important decisions you need to make when considering your Will is who to choose as an executor. This will be the person, or people, who will administer your property and finances after you die, and carry out your wishes in line with your Will.

Up to four executors can act at a time, but they all have to act jointly so it might not be practical to appoint that many people. It’s a good idea, though, to choose at least two executors in case one of them dies before you do, or to appoint a reserve executor in case the person you have chosen is unable or unwilling to act. Whilst it’s a good idea to ask executors in advance whether they’d be willing to take on the role; it isn’t essential to tell them or have their agreement.

Here are some key considerations that you need to think about when choosing who to name as an executor:

• You do not need to name a solicitor or other professional person. If you choose family members or friends, and they find that they need professional help, they can choose who they want to work with at the time, and then pay for the services out of your estate. Your executors can choose to have as little or as much professional help as they need. Bear in mind that if you do go down the route of appointing a solicitor and you die many years later that solicitor may have died before you, or at least retired. This can cause major problems as anyone appointed has to ‘renounce their responsibility’ or be proven as deceased before anyone else can take over the role.

• It is common practice that spouses name each other as executors. It is a good idea to appoint at least one reserve executor as well – often that will be a child or children.

• Once you’ve made your choice of executor/s, let them know where you keep all your important documents, financial information and other relevant information such as funeral plans. We have a really helpful document that you can use to make everything easier for family members (click here to view)

• An executor can act as a witness when you sign your Will, as long as he/ she (or their spouse) isn’t also a beneficiary.

• Another consideration when choosing an executor is do they have the time? If it is a simple estate it might not be too time consuming, but if your affairs are complex then it can be a considerable amount of work.

• Although, as already mentioned, the people you choose do not have to be professionally qualified, it is a good idea if they are reliable, organised and if they have some financial acumen. Not essential but definitely useful!

If you require any more information on making a Will, help with Probate or any of our other services, then please contact us at A R K Lasting Powers & Wills. We would be happy to help and support you to make the important decisions you will need to make. Contact us on 01438 746977 or email info@arkpowers.com.