pre-paid-funeral-plan

Why your family will be really grateful that you arranged a pre-paid funeral plan:

Some of the A.R.K. team went to Safe Hands head office a couple of weeks ago for some refresher training. We have summarised some interesting facts about why a Safe Hands pre-paid Funeral Plan is a good idea!

  • The average UK simple funeral and cremation currently costs between £3,500 to £4,500 depending on where you live. This can often be a lot more. Our Pre-Paid plans start at £2,275 and go up to £3,900.
  • In the last 10 years the cost of a simple funeral has increased by 70%
  • Based on the current increases, by 2029 an average funeral will cost £10,000 and if the current trend continues in 30 years the cost of a simple funeral could exceed £30,000!
  • Funeral costs vary in different parts of the country, but a plan costs the same wherever you live. For those of us in the expensive outer London area this is a major plus point.
  • You can specify exactly what you would like to happen at your funeral and your family will not have to second-guess your wishes.
  • You can specify a particular Funeral Director if you wish, if you don’t do this a local Funeral Director will be appointed by Safe Hands when the time comes.
  • Funerals of all different faiths are catered for.
  • Funeral Directors will often persuade families to upgrade by using terms such as ‘something a bit nicer for your loved one’ so buying a plan specifying your wishes can stop your family being upsold to at the toughest of times.

THE ASPECT MOST PEOPLE ARE CONCERNED ABOUT BEFORE BUYING A PLAN:

How safe will the money be? How do I know my funeral will definitely be paid for?

Safe Hands invests the money for plans in a completely independent Trust Fund. Therefore, in the unlikely event something happens to Safe Hands the customer’s money is completely safe.

Pitman’s Trustees Ltd an industry regulated Trust Fund Management Company administers the Trust Fund. The Trust Fund monies are invested by UBS in low and medium risk investments and spread over a large range of investments; which keeps the risk of investments safe.

The fund is audited annually (most recently in October 2017) and even if everyone who has a plan died today, there would be enough money to pay for all those funerals plus there would be a £9million excess.

The Trust has Public Indemnity cover and is under the umbrella of the Financial Services Agency, although it’s not subject to the compensation rules as it is not a bank or building society.

Other information regarding Funeral Plans:

  • You can pay by instalments, which are interest free for up to 2 years. For periods of more than 2 years a 4% annual handling charge is made.
  • You can purchase a funeral plan with just a £250 deposit, and then pay low monthly instalments for periods up to 10 years. A small price to pay for the total peace of mind it will bring for you and your family.
  • There are several different levels of plan that can be tailored to meet you needs. These will be fully explained to you by one of our friendly consultants; prices start from just £2,275.
  • There is a 21-day cancellation policy during which you can get a full refund if you change your mind.
  • There is absolutely no pressure to buy! Our consultants will visit you at home to discuss the plans available in as much or as little detail as you wish.
  • We have no involvement with any call centres or comparison websites.
  • Pre-Paid Funeral Plans are greatly increasing in popularity and for example in The Netherlands over 70% of the population now have a Pre-Paid Funeral Plan.

You have nothing to lose by arranging for one of our consultants to visit you for an informal chat about the options. Contact us today to make an appointment.

The law regarding Inheritance Tax and making gifts

Believe it or not, you are actually allowed to make some gifts without your heirs having to pay any tax at all. Understanding where these boundaries lie however, is generally an area many of us can find confusing. With this in mind, I’ve pulled together a breakdown that whilst comprehensive should be easily digestible!

The law –

You are allowed to make tax free gifts as follows:

Gifts to ‘exempt beneficiaries’:

You can give as much money as you like to certain people and organisations without paying Inheritance Tax (this applies whether you give money whilst living or after you death, via your will). Exempt beneficiaries include:

  • Your husband, wife or civil partner, provided they live permanently in the UK
  • Charities registered in the UK – to check which charities qualify, visit the HMRC website
  • Some national organisations like universities, museums and the National Trust

NOTE that gifts to unmarried partners or unregistered civil partners are not exempt from Inheritance Tax.

Your Annual Exemption:

You are allowed to give away a total of £3,000 each year, without any tax implications after your death. Bear in mind that this is the total annual amount that you can give away, NOT a total amount you can give to each beneficiary, each year.

It is also worth noting that your Annual Exemption can be carried forward for one year if it has not been used. In other words, if you did not make any gifts of money during last year, you can give away a total of £6,000 this year. Equally, if you gave away £1,500 last year, you’ll be able to give away a total of £4,500 this year.

The Annual Exemption cannot be carried forward by more than one year.

Giving small cash gifts:

In addition to the exemptions above, you can give away small gifts – not more than £250 – to as many people as you like in one tax year. However, some points to remember include:

  • You can’t make a gift of more than £250, and claim exemption on the first £250 (larger gifts are treated differently)
  • You can’t combine the small gifts exemption with another exemption when giving money to one person. In other words, you can’t give one person £3,250 and claim exemption based on a combination of the small gifts and ‘Annual’ exemption.

Wedding gifts:

Provided that you give or promise to give a cash gift on, or shortly before, the ceremony you can make quite large cash gifts as wedding or civil partnership presents, without being liable for Inheritance Tax. The limits on such gifts depend on your relationship with the recipient:

  • If you are a parent you can give up to £5,000 tax free
  • Grandparents can give up to £2,500
  • Anyone else can give up to £1,000

Remember, however, that if the wedding or civil partnership is called off and you still give the gift, it will NOT be exempt from Inheritance Tax.

Regular gifts or payments:

Any gifts that are part of your normal expenditure are exempt – provided they are made from your net, ie. after tax income (not your savings); and that you have enough money left over to maintain your lifestyle. These exempt payments include:

  • Maintenance for your husband, wife, civil partner
  • Maintenance for your ex-husband, ex-wife or former civil partner
  • Maintenance for relatives who depend on you
  • Maintenance for your children, adopted children or step-children, as long as they are under 18 or in full-time education
  • Monthly or regular payments to anyone
  • Regular gifts for Christmas, birthdays or wedding/civil partnership anniversaries
  • Premiums on life insurance policies

What if I want to make other/larger gifts? – The ‘Seven Year’ rule

Any gifts you make that do not fall under the scope of those mentioned above will be treated as your asset in decreasing percentages for some time after you have made that gift.
Gifts made 3 to 7 years before your death are taxed on a sliding scale known as ‘taper relief’.

We’d all rather our loved ones benefitted from the full inheritance we want to leave them, let’s not line the taxman’s pockets with more than we have to. Contact A.R.K on 01438 746977 or email info@arkpowers.com for more information.

 

What does that mean?… Will and Probate related terms

There are few things in life that are likely to be more traumatic than dealing with the death of a loved one. It is, however, an unfortunate and painful reality that we will probably all have to face at some point.

Thankfully there are safeguards we can put in place to ensure that when faced with these situations, we can allow ourselves to deal with the emotional turmoil such events bring, knowing that the practicalities of dealing with finance, insurance companies and assets have all been taken care of in advance.

There are many considerations when it comes to Wills and Probate, and the process of the tying up of a loved ones’ affairs. You may be aware of some of the more well-known elements; such as the Will itself and what it means to be a Beneficiary. However, for many, knowing what it means to be ‘Intestate’ and understanding the legal requirements of the ‘Trust Minutes’ is an unknown entity. With this in mind, I’ve compiled a list of terms and their definitions, to remove the potential cloak of confusion surrounding an area we all need to have a clearer understanding of.

Will

The legal document allowing you to leave your ‘estate’ the way you would like to leave it. A Will must be in writing, it must be signed and dated in the presence of two witnesses, who must then sign to confirm they are witnessing it.

Estate

The total value of your assets when you die, after deducting any debts and funeral expenses.

Intestate

If you die ‘intestate’ you die without leaving a Will. Your estate will then be distributed to your family in accordance with the laws of intestacy. Only if you have no family at all will your estate pass to the government.

Executor

The person or people appointed to look after your estate. Responsibilities include:

  • Arranging the funeral
  • Notifying any relevant companies/organisations regarding death
  • Calculating the value of an estate to establish whether Inheritance Tax is due to be paid.
  • Establishing whether a ‘Grant of Probate’ is needed and if so applying to the court for this document.
  • Calling in assets and paying any debts
  • Distributing the estate in accordance with a Will or the laws of intestacy.
  • Running any Trusts that are created (if separate Trustees are not appointed)

Power of Attorney

The document you will need to sign, in front of a witness, to give a solicitor or other professional authority to act as executors on your behalf.

Trustee

A person appointed to run any Trusts that are created following a death. Often this is the same person/people who are appointed as executors, but sometimes separate Trustees are appointed.

Trust fund

The value of assets placed in Trust for children or others following a death.

Trust minutes

These are required by law. All Trustees are obliged to meet at least annually and to minute that meeting to ensure that the Trust is being run correctly.

Guardian(s)

The person or people appointed to look after any child under the age of 18 when parents are not able to look after the child themselves.

Beneficiary

Someone who benefits from a Will i.e. inherits something in a Will.

Legacy

The ‘gift’ you are left in a Will.

Probate

This is often the general term used to describe the process of administering an estate after someone has died.

Grant of Probate/Representation

This is the document that is often needed to call in assets (obtain funds from banks etc that are holding money belonging to the deceased’s estate), or to sell property. An application to court has to be made and a fee is payable. Individuals applying will have to attend court or a solicitor’s office personally to swear oath, whereas professional executors do not have to do this.

 Letters of Administration

The Scottish equivalent of a Grant of Probate.

Assets

Any item of value owned by the deceased.

Liabilities

Any debts the deceased had at the time of their death, plus costs which occur whilst the estate is being finalised e.g. funeral costs/professional fees and disbursements.

Residuary estate

This is the net estate available to be distributed to beneficiaries after all liabilities have been paid and specific gifts have been made.

 Deed of Variation

A legal document which allows a beneficiary to vary the terms of someone’s Will up to two years after they have died. This is useful where a beneficiary does not want to inherit something as it may have an impact on Inheritance Tax that would be due on their death. They can vary a Will so that their inheritance will pass straight to their child/children.

Right to occupy/Life interest

If a Will specifies that you have been given a ‘right to occupy’ or a ‘Life Interest’ in a property it means that you will be allowed to live in the property for a defined period, but you will not actually own the share of the property that was owned by the deceased. This share will be held in Trust.

Inheritance Tax (IHT)

The tax that can be payable on death (and on some gifts made prior to this). There is an annual exemption each year (currently £325,000) and if the estate is valued above this level Inheritance Tax will be payable at 40% on the excess. In the case of a married couple the allowance which is unused by the first person to die can be transferred to the surviving spouse, meaning that, based on current rates, up to £650,000 can be treated as being exempt from Inheritance Tax.

Residence Nil Rate Band

A new Inheritance Tax ‘allowance’ that was introduced in April 2017. If you
have a property that you are ultimately leaving to children you can currently
leave an additional £100,000 without IHT being due. For a couple this can be
transferred to a spouse, meaning that the couples’ allowance is increased
from £650,000 to £850,000 in the 2017-18 tax year. By 6th April 2020 a
couple leaving a property to children or step-children will be able to leave up
to £1 million without IHT being due on their combined estates.

Distribution (final or interim)

This the act of making a payment to a beneficiary, and also the term used
to describe the payment. A distribution can be ‘interim’ if funds are paid to a
beneficiary prior to the estate being wound up, or it can be ‘final’ if all
calculations have been completed and the estate is being finalised.

 

Many of us spend years debating the drafting of our Wills and never actually get around to writing them. This can be because people are uncomfortable having discussions with their loved ones on the seemingly cold and callous topic of how the estate will be split, who will be entitled to what, how and when. At A.R.K. we understand how difficult this process can be, and are here to help you every step of the way with expert, jargon-free advice; ensuring you and your family are protected from the worst.

If you feel the time is right for you to put pen to paper, and ensure that your loved ones aren’t left with anything other than peace of mind for the future, call us today on 01438 746977 or email info@arkpowers.com.

3 Lasting Power of Attorney Myths

At A.R.K. Lasting Powers & Wills, we meet people from all over Stevenage and north Herts. As you’d expect, we talk about their circumstances when working with them to write their Wills.

Often, the subject of Lasting Power of Attorney is discussed, (in some situations, it’s more important than a Will). There are many misconceptions about Lasting Powers of Attorney, (LPAs). These lead people to think that they are ‘covered’ should they or their loved ones become ill and lose mental capacity when actually… they’re not. Sadly, many people only realise the facts about the need for Lasting Powers of Attorney when it’s too late.

So – this is our opportunity to set the record straight!

3 Misconceptions About Needing An LPA

“I don’t think I need a Lasting Power of Attorney – because…”

…I’m too young to think about doing that – our answer is that you never know when an accident or stroke could leave you too ill to look after your own finances. LPAs are not just a good idea when you are older and worried that you may end up suffering from Alzheimer’s or Dementia. There are many other conditions/events that can mean that mental capacity is lost. Make life easier for your family, should something unexpected happen, by making an LPA. You can appoint people you trust to help you if you suddenly became ill.

…I’m married and all my accounts are joint with my spouse – our answer is that this would make no difference at all! When somebody loses mental capacity, the medical professionals inform the Court of Protection and they immediately freeze ALL accounts belonging to the person who is ill. This includes joint accounts, which means that the person who is well won’t even be able to access their own money.  It takes a special application (and the payment of a fee) before the Court of Protection will unfreeze joint accounts. All this trauma could be avoided if an LPA is in place when someone becomes ill. Also, anything that needs to happen with property that is jointly owned needs the signature of both owners. This could cause a lot of problems, but with an LPA in place there would be no problem at all as an attorney can sign as if they were the person who is ill.

…My son/daughter has access to all my accounts, they are even a cardholder – our answer to this one is that whilst this can work on an informal basis when you are well, the arrangement would not be allowed to continue if mental capacity were lost. The Court of Protection would be informed that you had lost mental capacity and all your accounts would be frozen.  No-one would have access to your money until the court decides who is the right person to take over the running of your finances.  So, money needed for your care or to pay your bills would be unavailable to your family until the court process is complete.  This can take many months, and the cost of the application would be a lot more than the cost of making an LPA while you are well!

So, these are common ‘reasons’ we hear regularly about why it isn’t necessary for someone to make an LPA.  Anyone who believes it isn’t necessary is being short sighted – you never know what’s around the corner.  You might not want to pay the fee for making an LPA now in the hope that nothing happens, or that you will have warning that you are becoming ill and that you can do it then. But what if there is no warning? Your family will be really upset because you have had a serious accident, or a bad stroke. Coupled with that they will have the extremely difficult job of applying to court so that they can access your money to continue paying bills, or to buy the things you need for your care, or even to actually pay for your care.

Equally, if it is Alzheimer’s or Dementia that means mental capacity is lost, unless you act quickly when you become ill it could soon become too late to make an LPA.

What happens if I don’t set up an LPA?

Without an LPA nobody is allowed to help you without permission from the Court of Protection (CoP). They must apply to the court to be appointed as a ‘Deputy’ so they can manage your affairs.

A Deputy can regain control (with luck) inside six months. And please be aware that it is extremely unlikely that a Common Law Partner will be appointed as a Deputy (however, you CAN appoint a Common Law Partner to be an attorney on your LPA).

It is also important to note that the CoP charges a fee for appointing a Deputy, which is far more than the cost of making an LPA at the outset. The court also charges for overseeing the actions of the Deputy and will expect regular accounts and updates. Ultimately, the CoP is responsible for ensuring that the Deputy is acting in your best interests. With an LPA, the attorneys are allowed to get on with the role without being monitored as you said you would trust them to do that.

All of this hassle and upset can be avoided for your family if you make an LPA while you are well, to act almost as an insurance policy.

Why use A.R.K. Lasting Powers & Wills to arrange an  LPA for you?

We will make the process simple and stress-free. You will only need to spend about 30 – 45 minutes giving us the details of the attorneys you’d like to appoint. We’ll provide one-to-one advice and support throughout the process; we’ll collect signatures from any relevant person who is present at the initial appointment, and then arrange for attorneys who are not present to sign where needed (this can often be done by post). And we’re fully qualified and authorised to sign the LPA to confirm that the person making it has the mental capacity to do so.

Our fees are vastly less than a solicitor may charge, but you will receive exactly the same document once the process is completed. The fee for the first LPA anyone makes with us is £150*

There is another type of LPA which covers health and welfare matters and gives people you trust the right to make decisions regarding your daily care if you’re too ill to do so, and allows you to specify your feelings regarding life sustaining treatment. We can give you information regarding this type of LPA as well, and if you think that it makes sense for you to have both documents the fee payable to A.R.K. will only be £250*

What do I do next?

Call A.R.K. on 01438 746977 or 07926 339934 or contact us to discuss making an LPA, or to arrange a daytime or evening appointment. We generally prefer to see people in the comfort of their own homes, but daytime office appointments can be arranged if you would prefer.

* If you decide to register your LPA immediately, the Office of the Public Guardian charges a fee of up to £82 for each LPA you are registering.

A.R.K. house image

IMPORTANT INHERITANCE TAX LEGISLATION CHANGE – EFFECTIVE FROM 6th APRIL 2017

This is what the was announced in the 2015 Budget:

The new Residence Nil Rate Band (RNRB) will have the effect of … “taking the family home out of inheritance tax for all but the wealthiest with a new transferable nil-rate band, introduced from April 2017.  This will apply when a main residence is passed on death to direct descendants, such as a child or grandchild.  The allowance will be £100,000 in 2017-18, up to £125,000 in 2018-19, up to £150,000 in 2019-20 and up to £175,000 in 2020-21.  This is in addition to the inheritance tax nil-rate band, which is set at £325,000 for the estates of individuals.  This creates an effective £500,000 inheritance tax threshold for estates in 2020-21.  As with the current nil-rate band, any unused main residence nil-rate band will be transferred to a surviving spouse or civil partner and means the effective inheritance tax threshold will rise to £1 million in 2020-21…”

The really good news is that ‘direct descendants’ will include step-children.  It is important to note that the allowance can still be claimed if a Life Interest Trust is included in your Will (in simple terms your share of your home will go into Trust if you die first thus protecting it for your children, but your spouse will be able to stay in the house).  As long as, on second death, it will pass to direct descendants the RNRB will still be available for use with this type of Trust.

The way the ‘wealthiest’ is currently defined is anyone who has an estate exceeding £2 million (this will stay at the same level until 2020-21 when it will be increased in line with the CPI). If the net estate is more than £2 million the RNRB will be tapered away at a rate of £1 for every £2 over the taper threshold.

If you would like to know more about this change in legislation, please contact us on 01438 746977 or email info@arkpowers.com.

Making a Will: 7 Big Questions

  1. When should I make a Will?

Making a Will isn’t linked to your age. Instead, the timing of your Will is often influenced by your circumstances. We all have a time in our lives when it is sensible to make a Will – such as:

  • when you buy your first property
  • when you have your first child
  • when you get married
  • when you start living with a long-term partner

You are never too young to have peace of mind that you are protecting the ones you love by making a Will.

  1. What happens if I die without leaving a Will?

Would your estate go to the government?  No. This would only happen IF no family members could be located.

If you have family your estate would go to the closest members first, so…

  • your spouse,
  • if there is no spouse – your children/grandchildren,
  • if there are no children/grandchildren – your parents,
  • if your parents have died already – your siblings,
  • if there are no siblings – your nieces/nephews,
  • where there are none of those your half-brothers and/or sisters then their children

The possibilities go on, encompassing grandparents, your aunts and/or uncles, your cousins and finally your cousins’ children.  Only if you have NO living relatives does your estate go to the Crown.

BUT is this what you would want? A Will is the only way to make sure everything you have when you die goes where you would like it to go.  That could be close friends or charities rather than those distant relatives who you never see.

  1. What happens if I marry?

The only thing that cancels or ‘revokes’ a Will is marriage. If you get married after you have made a Will, it will no longer be valid. The way round this, if you think you may marry a long term partner, is to make your Will ‘in contemplation of marriage’. This means that throughout your Will you would refer to your fiancé/fiancée as your intended husband/wife.  This ensures that you will still have a valid Will after you get married.

  1. How long do Wills last for?

Wills are meant to be future-proof so you shouldn’t need to amend them regularly; if a Will Writer knows what they are doing they will try to ensure that you don’t need to update your Will every time you have a child or when a new grandchild is born.

  1. What happens if I am separated from my spouse?

If you are separated but not divorced and you die without a Will, your estranged spouse could inherit everything.  Probably not what you would want! Make a Will to stop that happening.

  1. What happens if I am divorced?

If you are divorced, and you made a Will whilst you were still married, your Will would be read as if your ex-spouse had died before you. Therefore, they would not receive anything they were due to receive in your Will.

  1. I have children – do I need a Will?

Making a Will is vital if you have children, as you need to make sure your wishes are known regarding who you would want to look after them if something happened to you.

If you have any other queries about making a Will – or would like to discuss the above details further, contact A.R.K. Lasting Powers & Wills. A free initial meeting without obligation – or jargon – can offer you expert information and reassurance about Wills.

Pre-Paid Funeral Plans – Simple Yet Brilliant!

Why bother with A pre-paid funeral plan?

Most of us know that funeral plans make life easier for our loved ones. But why should you think about paying for your funeral in advance? Paying for your funeral now saves you money!

The average cost of funerals has almost doubled over the last 12 years. Typically, you could expect to pay £3,900 for your funeral in 2016. In 2004 the average cost was only £2,000. In 30 years’ time, the forecast cost could exceed £30,000!

I recently attended a Safehands Funeral Plan course. They explained that the average price of a funeral has doubled every decade for at least the last 50 years. The statistics prove this point. I am 50 and I am hoping to live for many more years! If I live until I’m 80 years old, my funeral could cost over £30,000!! Inflationary rises alone won’t help my savings to meet this increased fee… the price of funerals is rising far more rapidly than the rate of inflation. Fact.

How do pre-paid funeral plans work?

Buying a pre-paid funeral plan at today’s prices means that your family won’t have to pay for your funeral when the times comes. You can pay using a lump sum or monthly instalments.

As the cost of funerals rises, you’ll have peace of mind that your plan is in place and fully paid for. Your family will avoid the costly expense of your funeral… and will therefore inherit more from you. What a simple but brilliant idea!

Is the money you pay for your funeral plan protected?

Yes – absolutely. Your money is invested in a managed, fully regulated Trust fund, which is ring-fenced for people who have bought funeral plans. It doesn’t belong to Safehands, it belongs to you so your funeral would always be paid for.

Will my funeral plan pay for disbursements?

Disbursements are payments made to third parties for things like:

  • crematorium fees
  • minister’s fees
  • doctor’s fees for certifying the death

Most plans include an allowance towards them that should easily cover the cost of most, if not all, third party costs. (You may prefer to choose a plan where disbursements are not included.)

So…now I know why it is a really good idea to have a pre-paid funeral plan I will happily recommend them to my clients in Stevenage and surrounding areas who are making Wills or Lasting Powers of Attorney with me.

With plans ranging from £2,275 to £3,900 I am confident there will be a plan to suit all budgets and requirements. (Payment by monthly instalments is available.)

Another benefit of arranging a plan with A R K is that you get personal, face-to-face advice – so no call centres to deal with or horrible forms to complete yourself.

Would you like to find out more? Contact me and I’ll answer any queries you have without obligation.

Stevenage Magazine

Our first official article and advert has been published!

If you live in Stevenage you may receive the Stevenage Magazine – if so, take a look at page 20.

You will find an article explaining why everyone should consider making an LPA, along with our advert which includes a special offer! You could receive 10% discount off all prices for daytime appointments held up to 31st January 2017.

Make it your New Year resolution to finally get round to making that Will you have been putting off for ages. It really is quite a painless process and you will feel so relieved once it is done.

View our article and advert.

Lasting Power of Attorney fact sheet

We have just received the printed versions of our fact sheet, which has all the essential information you need to know about setting up a Lasting Power of Attorney.

We hope you will agree it looks great! Have a read to see if an LPA is something you or a family member should be thinking about.

To discuss making an LPA, or to arrange a daytime or evening appointment, call A.R.K on 01438 746977 or 07926 339934.

View the fact sheet here.