selective focus photo of terms and conditions written on a paper

‘Free’ Wills may not turn out to be free at all!

When we see this offer advertised, our hearts sink (unless there is a charitable reason).

Will writing is our core business, we are specialists in the field and hold the relevant insurances and a Society of Trust and Estate Practitioners (STEP) qualification. Our fees are not extortionate, but they do cover a lot of work:

  • setting up an appointment
  • sometimes travelling to an appointment and the associated travel costs/time
  • carrying out the appointment (usually appointments last around an hour) and
  • offering advice and answering questions
  • sending follow up emails where appointments have been held remotely
  • drafting Wills and sending them to clients
  • liaising with clients regarding draft Wills and sending gentle reminders where
  • necessary
  • making amendments and then preparing final Wills and posting them/hand-
  • delivering them to clients
  • checking the way Wills are signed
  • sometimes placing them into storage

How long do you think that whole process takes? On average it is around 4 – 5 hours.

So why would any company doing the job properly give away all that time for free? They probably make shortcuts, and it will probably be a less personal service, and that is just the start…there must be something in it for that company to be offering something for free. The saying ‘If it seems too good to be true, it probably is’ springs to mind!

Is the person who is conducting the work qualified? Will you end up with a legally valid Will document if someone with no qualifications and/or little experience drafts your Will for you?

What is the core business of the company who are offering ‘free’ Wills? Are they Financial Advisors, Mortgage Consultants or Protection specialists – are they looking for Will clients who they can talk to about all their other services in the hope that they can make money that way? You may be fine with that, but be prepared to possibly be ‘sold to’ about other services etc.

Are they a company who offer ‘Probate Services’ and may try to persuade you to appoint them as executors of your Will? This may not be the best solution – often it is better (and much cheaper) for family members who have been appointed as executors to choose who they use if they need professional help when the time comes.

The terms and conditions when a ‘free’ Will is offered will no doubt say that the free Will would only be a basic one. It may be that some aspects like appointing more than one executor, appointing guardians, or making gifts won’t be treated as a basic Will, so fees will be incurred that way – you may end up paying more for your ‘free’ Will than you would have if you had paid the standard fees of another firm. Our Will fee covers most aspects apart from business clauses and any Trusts (apart from those for minors which are covered by our standard fee). There are no nasty surprises if you make a Will with us!

As mentioned at the outset, an exception to this is where free Wills are offered in exchange for a donation to charity. It is clear, that in this case, the company are offering the ‘free’ Will for a valid reason and will use their experienced, qualified staff to prepare a certain number of Wills for free – usually over a one week or one month period. They will have a suggested amount that should be donated to the charity in return. This is commendable of course we have no issue with this and have participated in Free Wills week/month several times ourselves.

You might deem the free Will offered in return for a charitable donation not to be free at all – and you’d be right (unless you decide not to donate of course).

So, the bottom-line is make sure you check out the company offering a ‘free’ Will. Look at their reviews, check their qualifications and insurances and ask questions about what a ‘basic’ Will consists of and what you might have to pay for. Ask yourself why they might be offering this as a free service. It is likely that the ‘free’ Will won’t actually turn out to be free at all!

For more information about this, or about making a Will in general, contact us today – Tel: 01438 746977 or email info@arkpowers.com.

A.R.K. house image

How do I protect my property for the future?

No one knows what their future holds; and in today’s world of blended families and ever-increasing care costs, it’s important to consider how you might protect your property after your death.

A simple Will stating what you want is not always enough to protect property inheritances for your family.

Most people who co-own their home with another person do so as joint owners. This means they both own the whole property. On the death of one of the joint owners, the home AUTOMATICALLY becomes the property of the survivor – they can then do what they want with it. This can, however, cause problems.

What if the survivor then re-marries? It is possible that the whole of the house will then pass to the new spouse on their death, thus disinheriting children of the first marriage. There are many recent examples of this happening where wealthy celebrities have died – the estates of both Paul Daniels and Bruce Forsyth received lots of publicity.

Another scenario is, what if the survivor has to go into a care home? As the property just has one owner, the Local Authority has the power to charge the cost of care against the value of the whole house – meaning that there would be nothing left for children to inherit.

What precautions can be taken to avoid this happening?

There is an answer to this problem. It is to change the way the home is owned whilst both owners are alive – from joint owners to Tenants in Common. This is a straightforward process that does not involve the mortgage company, even if the property is mortgaged. As Tenants in Common, each owner owns a share of the property (often a half share) and by using a Will Trust (a Life Interest Trust, also sometimes known as a Protective Property Trust), they can do whatever they wish with their share of the property on their death.

The idea of a Life Interest Trust is that you wouldn’t leave your share of your property to your partner – but you would leave them the right to live there until their death (or whatever date you specify). The survivor would not then own the whole property, just their half. This protects the 50% of the property owned by the person who has died, from possible care home fees or the new relationship scenario.

The survivor could only leave 50% of the property to their new partner. The 50% of the property belonging to the person who had died would be transferred into Trust, often for the benefit of children. The Trustees would then look after the 50% share of the person who had died, making sure the property is maintained and insured properly. If the survivor decides they would like to move out, they can do so as long as the Trustee agrees. If any monies are freed up by downsizing 50% belongs to the survivor, and they can also have access to the money belonging to the Trust fund if the Trustees agree.

There is also another simpler form of Trust that some people choose. It’s called a Right to Occupy Trust and these are commonly used where adult children live with their parents. This type of Trust gives the child still living at home the right to stay in the property after both parents die, without actually owning it. When the parents die he whole property is placed in Trust, often for all the children of the deceased – so when the Trust period ends the property can be sold, with the proceeds being shared between all the siblings.

Do be wary though, of taking any drastic action to avoid care costs. People sometimes think they can sell a house to a relative for a nominal fee, or even give it away, in order to transfer legal ownership. However, this could be seen as ‘deliberate deprivation’ and the sale could be reversed. Local authorities have the power to claim care costs from the person the assets were transferred to!

The local authority will ask about any previously owned assets, and take into account any reasons you’ve had to hand over assets or property to other people. They’ll consider timing, alongside any motive or intention, and also the fee.

As you can see, by making a few simple changes; sending a form to Land Registry (no fee applies for this) to change the ownership terms of your property and putting a Trust into your Will, you can protect your share of your property for your family.

Call A R K Lasting Powers & Wills now and take that ‘What if?’ scenario away.

Funeral-plans

Financing your funeral in advance – why is this a good idea?

It’s ALWAYS a good idea to arrange a pre-paid Funeral Plan, but in some circumstances it’s a REALLY good idea.

There are many circumstances that make it especially important to have a pre-paid Funeral Plan in place. For example:

• You may have children with specialist needs who would find it very difficult to cope with making your funeral arrangements.
• If you have very few or no living relatives then it will give you the peace of mind of knowing you’ll have the funeral you want. Plus, you avoid burdening your friends with your funeral costs and the second-guessing of your wishes.
• Maybe money is tight and you are concerned about your – or your spouse’s/partner’s – funeral would be paid for when one of you passes away? With both our Dignity and Safe Hands Funeral Plans you can pay for one plan and use it for the funeral of whoever passes away first. You can always take out a second plan later when you can afford it.

How Funeral Plans Can Help
We recently sold a Funeral Plan to a lady in her early forties. She owns a small business locally and is a single mum of a teenage daughter. Her own mum had sadly passed away a few months earlier, and she was very worried about how her young daughter would cope with all the arrangements, as well as the grief, if anything happened to her.

We were able to reassure her that if she arranged a pre-paid Funeral Plan then a single phone call would be the single action needed to arrange the funeral. It means that all her funeral wishes are now documented, and the funeral is paid for in full. She now has peace of mind that everything will be taken care of and her daughter will have one less thing to worry about. Hopefully it will be a very long time before the plan is needed, but that’s the best thing about having a pre-paid Funeral Plan – even if our client lives another 40 years her funeral will still be paid for in full. There’ll be no extra costs for her family, no matter how much the funeral costs will have increased by then.

A Sensitive, Friendly and Professional Approach
A R K specialises in dealing with more challenging situations. Our friendly approach and home visits are timed to suit you. Even if someone is unwell or has specialist needs then we can help them – whether this is with a Funeral Plan, a Will or a Lasting Power of Attorney.

Sometimes, a terminally ill person wants a Funeral Plan. This is obviously a very difficult situation for the person concerned and for their family. Recently, we helped a client who had been diagnosed with terminal cancer. They had been told that they only had a very short time to live. By handling the situation in a sensitive manner and visiting at times when client felt well enough to talk to us, we could get everything arranged and finalised very quickly; so the client and his family had peace of mind and one less thing to worry about.

To give our customers more choice we now offer Dignity Funeral Plans alongside our existing Safe Hands plans. They are similar prices and you can choose from a range of options. Your A R K consultant will help you select the provider and plan that best suits your needs.

We carry out appointments in the privacy of your own home, or by telephone if you prefer. We can then offer you that same peace of mind that our existing clients have.

Please visit our Funeral Plan page for more detailed information or contact us on 01438 746977 or email info@arkpowers.com  to discuss your requirements. We you offer our expert advice for free – with absolutely no pressure to buy.

The Business Case for a Lasting Power of Attorney (LPA)

All business owners should consider a Lasting Power of Attorney (LPA) as the final piece of the business protection jigsaw puzzle.

Have you considered what might happen to your business if you:

• lost your mental capacity through illness or injury?
• were stranded abroad because of delay or extreme weather conditions?

Who would take over the running of the business on your behalf to:
• sign contracts?
• pay salaries and suppliers?
• write cheque?
• make the important day-to-day decisions to keep the business going?

Even if your bank account is held jointly with your spouse, it can be frozen until a Deputyship Order is produced by the Court. Business accounts can also be frozen, even where these are held jointly in the names of business partners or directors. How would your business cope with no funds? Many businesses in these circumstances fail.

If you suddenly lose mental capacity and haven’t made a Business LPA, it may become necessary to make an application to the Court of Protection for the appointment of a deputy to act on your behalf. The process can be expensive, and there’s no guarantee that the Court of Protection will choose someone who you would have chosen. It could also take more than six months before a deputy is appointed, during which time your business may be vulnerable and at risk.

The Business LPA and lack of capacity…

Most businesses have a Key Person Insurance Policy and crisis management plans in place, but the issue of lack of capacity is often overlooked. You might think the options are obvious, but there is no automatic legal right to deal with another person’s financial affairs. Don’t assume that a family member or a business colleague will gain the authority to make these decisions on your behalf – this assumption could leave your business exposed to risk.

To protect your interests, and those of your business, you should consider making a Business LPA.

Having a Business LPA in place allows someone that you trust – someone who understands your business – to take over the day-to-day affairs as soon as they are needed. Your attorney might be given the power to pay suppliers and staff, access and manage bank accounts, invest assets, handle tax matters and enter into contracts. Of course, you can limit your attorney’s power, but you need to ensure that the company can continue to operate with any limits in place.

The aim of all business owners is to make their business a success and to provide for their families and their loved ones. You work very hard, commit time and money to your business and have employees and suppliers who are depending on you. You have families who need your financial support and security.

It is natural to hope you will never need a Lasting Power of Attorney but why take the chance?

Business continuity…

A Business LPA should be an essential element of your business continuity plan, and the cost of setting one up is a small price to pay for the continuing success of the business you have worked so hard to build. It’s a one-off cost as well (as long as you don’t change your mind about who you have appointed as your attorney).

A Business LPA is a type of ‘insurance’ that all business owners should have, and it truly is the final piece of the business protection jigsaw puzzle!

Next steps…

Our fee to arrange a Business LPA for you (including registration of the document with the Office of the Public Guardian – so that is ready to be used immediately should it be necessary) is £175 (no VAT to pay). It’s a tax-deductible expense for your company, and the only additional fee to pay will be £82 to cover the Office of the Public Guardian fee.

Contact A.R.K. Lasting Powers & Wills today for a chat about how easy it is for us to assist you with making this document that could be vital for your business. It can be arranged at a face to face meeting, or by phone/email if you prefer. Call us on 01438 746977 or email info@arkpowers.com.

“It’s a Family Affair…”🎵

From the moment a baby is conceived our natural instinct as a parent is to protect that tiny little foetus – and that protective feeling lasts forever.

Think of all the ways we protect our children; the loving, caring, teaching and nurturing we do from the moment they are born until they officially become adults at 18 (and far beyond that)! The feeling of wanting to look after our children never fades. They may become independent, responsible adults who no longer need our day to day support and care, but we would still do anything for them!

Some of the things we do to protect our children are very grown up things – most of us make sure we have insurance in place so that if something was to happen to us while our children are young, there would be money there to pay for their upbringing. Where we can, we save money for their future; to help with buying their first car, their university fees, their wedding or their first home. If we can afford it, we might choose to pay for private healthcare insurance for them. We do our absolute best to make sure that whatever happens, our children would be ok.

There are other very grown up things that we should all do to help protect our children:

We should make a Will (appointing guardians to look after them if we can’t while they are young) and to make sure they inherit what we want them to inherit.

We should seek financial advice as we get older to try to avoid our children’s inheritance being lost to pay Inheritance Tax after we are gone.

We should make Lasting Powers of Attorney to make sure that if something happened to us which meant that we weren’t well enough to look after our own money, they would be able to step in and help us easily without a long expensive court process.

We should consider making a Funeral Plan as we get a bit older (perhaps 50+) – this is sensible for 3 reasons:

1. To save your family money! The average funeral today costs around £4,000 but funeral costs are increasing rapidly. In the last decade they have risen by 70%, so that average price funeral could cost around £30,000 in 30 years if costs continue to rise at the same rate. If you buy a Funeral Plan today (plans range from £2,275 to £3,900) you will potentially save your family many thousands of pounds.

2. So that your family will be in no doubt about what you want at your funeral – they will have less difficult decisions to make when they are trying to cope with the grief of losing you.

3. So that the money to pay for your funeral will be immediately available. One call to the Funeral Plan company and everything will be taken care of – the Funeral Director will be contacted, and everything will be dealt with in accordance with your wishes. The money will be paid direct to the Funeral Director so there will be no need for your family to find the money to pay for everything.

So basically; by making a Funeral Plan you would be protecting your children’s inheritance (saving money so that it ultimately goes to your children, rather than to a Funeral Director to pay for an expensive funeral). You would be protecting them from the stress and upset of second guessing what you would have wanted at your funeral and finally you would protect them from the hassle of having to work out how to pay for your funeral while they are trying to come to terms with the fact that they have lost you.

A.R.K. Lasting Powers & Wills is a family business based in Stevenage; various members of the family are involved in the business in one way or another – and all those people are Stevenage people with extended family and many friends in the town. We have a passion for helping other families protect each other – be that other Stevenage families or families in all our neighbouring towns and villages.

We do this by meeting our clients (usually in their own homes so they feel as comfortable as possible discussing sensitive matters), listening carefully to people’s concerns, offering advice and recording people’s wishes. We offer jargon-free explanations and information and we give our clients time to decide what they want. What we DON’T do is pressurise anyone to do anything they are not comfortable with.

It was on a family holiday recently, that we discussed our aim to help other families to be organised, prepared for the worst – hoping that some of those horrible situations won’t occur, but wanting people to be prepared in case they do. We realised that we could link up with other professionals who provide the services we aren’t able to offer ourselves. So, if you are an A.R.K. client and during our conversation about your Will, we discover that you need some advice about your pensions, or life cover, or investments or health insurance we will be able to recommend people we trust to assist you with those matters. So that the whole spectrum of services needed to protect your family can be covered. Again, there is absolutely no pressure for our clients to use the companies we recommend, but we are pleased to be able to provide options and information to enable them to make informed choices. We also have links with the amazing charity Home Start (Stevenage) who offer a range of support to families who are struggling with the demands and challenges of being a parent. More information about their services can be found at: www. home-startherts.org.uk

The point of this blog was to explore all the ways that we may protect members of our families. There are probably many other ways that we haven’t thought of, but hopefully we have made you stop and think; to take stock and consider actions you could take that might make everything easier for your loved ones, to protect them as best you can – no matter what life throws at you and your family!

If you would like more help or advice with making a Will, creating Lasting Powers of Attorney or making a Funeral Plan, contact us today to make an appointment with one of our consultants.

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.