Case Study Three - Inheritance Tax

Inheritance Tax

A client of ours, Terry, met and moved in with his partner Margaret, who had been married and had a daughter Helen, with whom he had a good fatherly, family relationship. Margaret owned the flat from the proceeds of the sale of the family home – had downsized and purchased a two-bedroom flat.

Margaret was diagnosed with cancer and died after six months. The family were devastated. Unfortunately Margaret had not made a will and died intestate.

The flat ownership was shared with the ex-husband and the daughter and Ted moved out into a flat he used to rent out.

We were invited to draft a will for Terry, as a result of what had happened with his partner Margaret, who had wanted her estate to pass 100% to her daughter Helen, rather than her ex-husband. Terry wanted to ensure his assets were distributed as per his wishes and his requirements which included Helen.

The will was drafted, signed and witnessed. We asked if he wished to keep a secure copy in safe storage at a cost of £37 per annum. Terry declined this on the basis he had a safe place for his will. Unfortunately, Terry died a year later. We were asked for a copy of the will, but whilst we held the draft copy, it had not been signed nor witnessed.
This meant that Terry died intestate and his estate was distributed under the Laws of Intestacy i.e. the state decided how his estate should be distributed after payment of the Inheritance Tax Liability was paid.

The security of a will, to be held in secure storage cannot be over emphasised. A catastrophe, such as damage through Fire or theft, burglary or any damage, or loss or put in a private place ( perhaps not telling anyone, where your will may be found ). If your will cannot be found or is damaged can make your will invalid – and the courts will decide on the distribution of your estate under Law. We recommend you hold your Will in secure storage, which can then be changed or amended as required with ease, and produced after death, when it comes into effect. Your will can be made available to your executors, to complete the service, and to provide you with peace of mind.


Case Study Two - Will Writing

Will Writing

Eddie is 72 and has been a client since 1994. We have advised Eddie and his wife Jane about how to arrange their wills in a tax efficient manner where we arranged to include a discretionary Trust to use their Nil Rate Band ( NRB ) when they die. Each one of them is a potential beneficiary of the others NRB discretionary trust.

We were aware of Jane’s circumstances. Her first husband had died in February 1995, leaving all his assets to Jane. We were not her adviser at the time – and she was not alerted to advice with regard using a Deed of Variation within two years of David’s death, so his NRB was not used on his death. Jane remarried five years ago.

We contacted them some time ago due to the introduction of the transferable NRB in the 2008 Finance Act. We wanted to alert them of the fact that it might now be possible to resurrect David’s NRB, which went unused when he died. This could show a considerable inheritance tax saving when they eventually die.

This means whoever dies first, Eddie or Jane leave their wills as they are, the second of them to die (or to be accurate their personal representatives ) may effectively claim 100% extra NRB current at the date of the second death on account of David not using any of his NRB when he died. It is important to ensure the right documentation is available and the documents that existed at the date of David’s death are fully examined – and the options fully explained. It is not an easy concept to explain…

Jane could revoke her will and revise a new will to include a discretionary trust at twice the NRB current at  date of her death. Eddie’s would be left as it is so his NRB will be used on his death whether this occurs before or after Jane’s.

Eddie and Jane decided not to take up our suggestion but to rely on their personal representatives to claim David’s NRB if Jane’s personal representatives have not already made use of it on prior to Jane’s death.


Case Study One - Estate Planning

Estate Planning

Estate planning is about reducing your potential inheritance tax liability ( IHT ), but more importantly it is about planning to ensure you do not give away more than you can reasonably afford. Estate Planning ensures you retain control of your assets in case you need to rely on them at some stage in the future.

Joyce had retired from teaching three years ago, her husband died last year. Joyce went to see an adviser who recommended she take up an equity release scheme after her husband died to provide funds to meet her desired lifestyle.
Joyce wanted to help her daughter out with education costs for her two grandchildren, Katy (9) and Jonathon (4), estimated to be some £10,000 per annum. Joyce wanted to visit her sister in America and to spend more time once a year, with her. She wanted to preserve the estate, whilst remaining in the family home, because of the size, location, close proximity of friends and the memories it held.

Joyce had provided some financial assistance to her daughter and wanted to ensure her son was not left out.

The advice provided was (i) downsize to a smaller house in another location or (ii) take equity out of the family home by way of an equity release mortgage. Otherwise it would mean completely restricting her lifestyle.

We were able to show Joyce how she could achieve her objectives simply and without purchasing a substantial equity release mortgage – whilst making provision for financial assistance toward her grandchildren’s education – and provide some financial assistance for her daughter through the use of trusts and rearranging her affairs – without the unnecessary expense and high cost of Equity Release. Furthermore by cashflow modeling we were able to demonstrate how her income and expenditure would be affected using various “what if”, scenarios.


Can I Still Make A Will Whilst In Lockdown?

Can I Still Make A Will Whilst In Lockdown?

Many essential services have struggled in recent weeks as traditional ways of working become increasingly challenging. Social distancing measures introduced to prevent the spread of Covid-19 have hindered the way legal professionals are able to facilitate the increased demand for Wills.

Wills are still being written. However, many Wills are not being reviewed and may be out of date for changes in personal circumstances or legislation. Professionals have just needed to become a little more creative in the ways they ask testators and witnesses to sign a Last Will and Testament.
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What has changed?

Wherever possible, people should stay at home and avoid meeting others to stop the virus from spreading and overwhelming the NHS.
This has had a huge impact on the way practitioners complete the Wills process, where face to face meetings were the usual practice.
Under Section 9 of the 1837 Wills Act, a testator must sign their Will in front of two independent witnesses (witnesses who are not beneficiaries or executors of the estate). Whilst this was fairly easy in the past, quarantine advice makes this process almost impossible. However, we have devised simple ways and means for the benefit of all.

Here at our Technical and Legal Services, we continue to do everything we possibly can to service our new and existing clients during these very difficult times.

Our ability to provide remote services through use of technology, from a telephone call, conference call, Zoom, Skype and Go To Meetings etc., makes us stand out from the crowd. This means that you can deal with your Will, Lasting Power of Attorney, trust and tax advice etc., all by telephone or by email and documents are sent to you by e mail and Royal Mail. We are also advising our clients on signature processes with social distancing measures in mind.

Meanwhile, our offices continue to operate with minimal skeleton staff for the protection of our staff and clients. We are not able to accept visitors at this time although we can still process physical documents for our clients. If you do find that you need to call into the office, for instance to have documents witnessed, when it is otherwise difficult for you to arrange that with family and friends then do please get in touch.

How can I comply with government advice and make a valid Will?

Testators should ensure that witnesses remain at least two metres from the testator and other witnesses and make sure that separate pens are used to sign the document.
• Before this stage, our legal services has embraced video technology as a way for the professional practitioner to make sure the testator has the mental capacity to make the Will and to understand whether the Will request is being made without undue influence.

This will also be a key opportunity to use technology to ensure the testator’s final express wishes are considered and documented.
Whilst the approaches in creating a valid Will are much changed at present, the process remains the same and we remain dedicated in ensuring virus-based restrictions do not prevent such an important document from being written.

Where there’s a will, there’s a way

If you would like to speak to your dedicated expert on Wills, Trusts and Probate, please contact us on 01727 867888 or email . You can also book an appointment online here

Professionals are often asked for legal advice which may be outside their area of specialism. As well as guiding you through the process, talking to an expert at legal services can help clear up any concerns you or your clients may have.


Helping The One Million Estates on The Inheritance Tax Threshold

Helping The One Million Estates on The Inheritance Tax Threshold

In recent months it has been revealed that over 1 million people over the age of 60 risk their estates entering the inheritance tax (IHT) liability threshold - which means 40% tax on the excess, or nearly half of your estate, to the taxman.

• According to a government forecast, one million additional estates are nearing the £325,000 inheritance tax threshold because of historically rising house prices; a figure which NFU Mutual believe is closer to 1.4 million estates.

Whilst many people might aim to “plan for the disposal of their estates in a tax efficient manner”, others may be in breach of Law or disappoint beneficiaries, and there are still many unsuspecting people who are unaware of the impact that their potential IHT obligations, and their Statutory Duty of Care or omissions could impact on their families.

• The Office for Budget Responsibility (OBR) forecasts have predicted that this windfall of liable estates is going to increase inheritance tax contributions by over £1 billion in the next five years.

• For the financial year 2018/19, the government received £5.3 billion in inheritance tax contributions. By 2021/22, this number will rise to £5.6 billion and the OBR are confident that in 2023/24 the total will exceed £6.3 billion.

When so many estates are hovering on the edge of the IHT threshold, it is imperative that estate owners are offered appropriate guidance that could help to minimise the overall total they are liable to pay. How many people are aware that Executors and Trustees may be held personally and fully liable for losses, through negligence or incompetence, or through lack of knowledge in expertise required?

We operate through the Institute of Professional Willwriters (IPW) and Institute of Scottish Professional Willwriters (ISPW). These have many members with an expert understanding of estate taxation, who could help the masses that are about to be affected by IHT complications. With my background as a broker consultant for Scottish Widows and as an IFA for National Insurance Broker British Medical Assurance (BMA Services Ltd) Financial Planner, before setting up my own Financial Planning business – we have access to experts in the many and various fields required. Our Academy offers a range of courses and training to ensure that our practitioners remain up to date with important issues which can impact on their clients.

Our processes and strategies can be used to tackle IHT issues as well as developing the capital gains tax (CGT) market. Often the implications for Income Tax are overlooked, along with Stamp Duty and Stamp Duty Land Tax. There are many opportunities where tax planning and income planning are designed with your best interests uppermost. As a result, risks are reduced and your lifetime cashflow is planned with you in mind, without bias of third parties.

Businesses and Business succession plans need to be addressed to provide security and control for your family.

1. As more and more estates are dragged beyond the IHT threshold, the importance of these issues is only going to increase.
Make sure you are in a position to confidently provide your family, or the beneficiaries of an estate or a trust, with good, sound advice from a professionally qualified adviser, who holds the appropriate qualifications and professional Indemnity Insurance (P.I. ) as a minimum requirement, paid by you, for you.

You can sign up for our quarterly Newsletter – the Westminster Wills Ltd Taxation and Financial Focus today – and receive our regular bulletins and updates as an Introduction to Estate Taxation today.

Contact for an annual subscription, or paid monthly. For further information and access to specialist services at a Westminster Wills Ltd., client reduced price.

Membership costs just £39.99 per month.


Online Will Writing – Costly in the Long Term

Online Will Writing – Costly in the Long Term

The concept is sound - a number of prearranged paragraphs designed to be completed on paper or online for cheap or often free. What is not covered is the cost of errors and omissions.

For example, how many free or online Wills consider digital photographs and who owns them? How many take account of trust funds for protecting assets? Of children and grandchildren or the protection of families from third parties or bankruptcy?

Every Will is required to prove there has been no undue influence to be valid and there are a number of things to consider for this. Was anyone around when it was filled in? Did anyone provide guidance or advice or assistance to complete it? Does it reflect the implications of tax? Have you chosen your executors wisely? Have you asked them?

I refer to such Wills as the “blankety blank”, of Wills – one size fits all, fill in the gaps. It’s like Have I Got News for You’s missing word (or words) round but with actual consequences for your answers.

The Real Value in a Will is the discussion around what you wish to happen.

When the Will goes to the Court of Probate, the Oath is sworn and HMRC investigate, will it stand up to scrutiny? If not it may be deemed invalid, which means your estate will be classed as intestate and distributed at the Court of Probate’s direction. Any money you have spent will be lost, along with any tax liability – and your beneficiaries may wish you had consulted a professional and qualified practitioner.

Online Will writing may be cheaper, there’s no arguing that, but it doesn’t provide the peace of mind that a full and considered service from a qualified Will-writing professional can.

Book today for a consultation, either by phone or in-office, to discuss your requirements.