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.

What are the important things to look for in a Will Writer?

It’s obviously a big decision making sure you are using a reputable company which will provide you with legally valid documents. Here are some key points you may wish to consider before choosing a Will writer.

  • Check what training, skills and experience of Will writing your Will Writer has

A R K is a member of the Society of Will Writers; this means that as well as undertaking initial training and obtaining relevant qualifications, we need to complete a minimum of 24 hours of additional training a year to ensure we keep up to date with all the necessary legislation and to enhance our skills.

We have over 9 years’ experience working in the Will, Lasting Power of Attorney and Probate business.

  • Is your Will Writer covered by a Society’s Code of Practice?

Will Writing is not currently regulated by statute, but that doesn’t mean that professional standards shouldn’t be imposed. Ensure your Will writer is working with a high sense of duty and standard.

A mandatory requirement of membership with The Society of Will Writers is that we adhere to their strict Code of Practice. Society members work in accordance with a methodical process that prioritises the client and their needs.

  • Does your Will Writer have up to date Professional Indemnity Insurance?

It is a mandatory requirement of the Society of Will Writers that all members hold a minimum of £2m Professional Indemnity Insurance. We comply with this and we also have £2m Public Liability insurance for our clients’ peace of mind.

  • Carry out as much research as you can before engaging a Will Writer

Look for recommendations and reviews to see if there are good reviews from satisfied customers. Friends/family, websites and social media are all good ways to ensure that someone is reliable and looks after their clients.

At A R K you can see our many excellent reviews both on our website and our Facebook page (A R K Lasting Powers & Wills)

  • Make sure you feel comfortable with the Will Writer you choose

At A R K we like to carry out client appointments in the comfort of their own home. If you prefer, we also offer telephone and Skype appointments, or we can arrange an office-based meeting. We are happy to have an initial telephone conversation to discuss your needs and to give as much advice in advance of the appointment as you need. This initial advice is free, and you would only incur any costs if you go ahead with making a Will or taking any of our other services such as Lasting Powers of Attorney or a pre-paid Funeral Plan.

  • Do any of your family have specialist needs that need to be considered?

If a member of your family is disabled or has any particular needs, such as long-term care, then it could be that you need to make provision for this in your Will. Your Will should be tailored to meet those needs. For example, this could mean you include a Disabled Trust within your Will. It may also be that a disabled adult needs that extra bit of help in making their Will or Power of Attorney.

At A R K we specialise in making our clients feel comfortable by carrying out home visits and being approachable and accessible. We provide clear advice and explain things without using daunting jargon.

  • What storage services can your Will Writer provide?

We can arrange storage for you with our reputable partners (there is a small annual charge) or you can store your Will at home. We recommend if you do take that option then you get a fireproof box for storage and advise your family where the Will is stored.

  • Check Terms of Business and company Literature

At A R K we try to keep everything simple and transparent for our clients. This includes a clear pricing policy on company literature and on our website. We do not believe in hidden extras. If we carry out any work for you, we will give you a copy of our Terms of Business which tell you what we expect to do for you, and what your obligations are. You also get information telling you what will happen next, and the timescale you can expect work to be completed in.

Visit our website at http://www.arkpowers.com to get more information, or call A R K Lasting Powers & Wills on 01438 746977 to discuss your needs in more detail.

What to do when someone dies

It can be complicated and confusing to deal with someone’s affairs when they die, especially during an emotional time.

At A.R.K. Lasting Powers & Wills, we can provide support and direction through this difficult process. We have developed a checklist to outline the steps you should take when someone dies.

You can download our checklist here, or for more support speak to one of our team by contacting 01438 746977.

lpa horror

LPA Horror Stories

We hear a lot of horror stories in our line of work – so what CAN happen if you don’t have a Lasting Power of Attorney (LPA)?

Here are some true-life examples we have come across.

The possible implications of not having a Finance & Property LPA in place when a property needs to be sold:

An elderly lady called Celia and her brother, Stan, shared the family home. Unfortunately, Celia became ill with Dementia and ended up in a nursing home. Stan was then left alone in their large draughty farmhouse. Stan assumed he would be able to sell the family home and buy himself a nice little retirement flat. He was looking forward to being somewhere with some activities onsite and other residents to talk to.

However, Stan couldn’t do this because there was no Lasting Power of Attorney in place for Celia, and her Dementia was by then too far advanced for her to make one. The only option was to apply to The Court of Protection for the right to sell the home. Stan was told this could cost anything up to £6,000 and would take months, possible years, to execute – he decided not to go down that route. He has had to carry on living in the house on his own, increasingly struggling to manage.

Making an LPA whilst Celia was well enough would have enabled him to sell the property, take care of his sister’s share of the money, pay her care fees and buy himself that little flat he dreamed of.

The time it can take to get a Deputy appointed where an LPA isn’t in place:

A client called Mark who we saw recently was making LPAs himself due to the experience he was having with his Mum. She had advanced Dementia and did not have an LPA in place. To enable them to sell her property and access her savings to pay her care home fees they had to go to The Court of Protection for permission. This application has been underway with the court for over a year, and it is still at very early stages. In the meantime, nobody can access his Mum’s money – so, many bills remain unpaid and there are obviously companies chasing for their money.

The problems that can occur if an LPA for Health & Welfare hasn’t been made:

We recently had a client called Marjorie who had sensibly made an LPA for Property & Finance, but at the time she didn’t realise the importance of making one for Health & Welfare as well.

She had health problems and on one occasion she felt so bad that her daughter, Lynne, called an ambulance. By the time paramedics arrived Marjorie felt a little better and slowly started to improve while they did their checks etc. They thought that she should still go to hospital for some more tests, but Marjorie really didn’t want that to happen. She was having trouble convincing them so Lynne stepped in to reassure them that she’d stay with her Mum that night so she wouldn’t be alone, telling them ‘I have Power of Attorney’. The paramedics asked to see the LPA document and Lynne duly showed it to them. Unfortunately, it was the LPA for Property & Finance which gave Lynne no right to speak on her mother’s behalf for anything health related. The paramedics dismissed the LPA and insisted on taking Marjorie to hospital.

Marjorie doesn’t want a repeat of that trauma, so she has now made an LPA for Health & Welfare as well so that Lorraine can legally speak on her behalf in future.

And then… one of the benefits of having an LPA for Health & Welfare in place:

Susan has a Mum in a local care home with Dementia. She sometimes has a funny turn that requires her to rest and have a cup of sugary tea. Within an hour she is fine. The staff who work during the day are aware of this and know that they don’t need to call an ambulance, but the night agency staff don’t know about it and on one occasion recently they called an ambulance. Susan’s Mum was taken to hospital and instantly sent home, as she was fine by then. The paramedics were of course only doing their extremely difficult job and acted in the correct way, not knowing this was a common occurrence.

Susan has since lodged a copy of the Health & Welfare LPA prominently in the home, and they now ring her when her Mum has a turn and Susan can prevent admission to hospital if she feels it isn’t necessary. A doctor told Susan that every day in hospital sets Dementia patients back by weeks, as it distresses and confuses them so much.

A situation you might not have thought of where LPAs are a really good idea:

When a child has a disability or learning difficulties a parent or guardian can legally look after their money and talk to medical professionals on their behalf until they are 18. At that point they officially become an adult, and although things can still often be done informally, banks and medical professionals have no legal obligation to liaise with the parents or guardians.

We were asked to help in this situation by Lorraine, Mum of 25 year old Sarah, who has
Down’s Syndrome. Since Sarah turned 18 Lorraine had been having problems getting doctors to listen to her. She is the one person who truly understands her daughter’s care needs – she knows how Sarah responds and copes with things. Sarah is an independent and bright young woman, but she finds hospitals and doctors a challenge. We were able to do both types of LPA for Sarah, who has the mental capacity to say that she wanted her Mum to deal with her finances and to talk to doctors on her behalf. It took some patience and understanding to get the information and signatures we needed from Sarah to complete the LPA documents, but now her Mum can speak on Sarah’s behalf to get her the best possible care. Lorraine was so relieved that we were able to help in this difficult situation.

We find that real-life examples of circumstances where an LPA is useful, and examples of stories we have heard about situations where an LPA wasn’t in place, are very interesting to our clients. Stories such as these make them realise why they should make LPAs – even if they are on the face of it young and well. Who knows when an accident or stroke could make someone lose mental capacity!

We offer home visits locally, and our fees are extremely competitive (£175 for one LPA and £300 if both types are required). The only other fee is the court fee of up to £82 per document if registration of an LPA is required – but you may not decide to register your LPA for use immediately. Our consultant will explain all of that to you and give you the options.

Contact A R K Lasting Powers & Wills today to start the ball rolling with making an LPA. Call us on 01438 746977 or email info@arkpowers.com We really do strive to make the process as easy as possible!