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Price and Kelway Wills and Lasting Powers of Attorney BNI Resolute 2 nd February 2016

Price and Kelway Wills and LPAs

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Page 1: Price and Kelway Wills and LPAs

Price and Kelway

Wills and Lasting Powers of Attorney BNI Resolute

2nd February 2016

Page 2: Price and Kelway Wills and LPAs

Who am I?

• Iestyn Scourfield

• Whitland

• Became a qualified Solicitor yesterday!

• Cardiff University and Cardiff Law School

• Interests – Sport, Poker, Films, Conspiracy Theories…

• Main practice areas:- Wills, Administration of Estates, Tax planning, Small claims civil disputes, Conveyancing, Commercial Law

• Little known fact:- My parents are both twins...

Page 3: Price and Kelway Wills and LPAs

Today’s presentation

• Wills in general

• Wills – second marriage, children from previous relationships

• Wills – vulnerable beneficiaries

• Lasting Powers of Attorney – What, why and how?

• Questions

Page 4: Price and Kelway Wills and LPAs

Why make a Will? • A will makes it much easier for your family

or friends to sort everything out when you die – without a will the process can be more time consuming and stressful.

• If you don’t write a will, everything you own will be shared out in a standard way defined by the law – which isn’t always the way you might want

• A will can help reduce the amount of Inheritance Tax that may be payable on the value of the property and money you leave behind

• Writing a will is especially important if you have children or other family who depend on you financially, or if you want to leave something to people outside your immediate family.

• Appoint a person to organise your estate and to follow your instructions

Your executor will do their best to make sure your wishes are followed, as long as they don’t involve breaking the law

Page 5: Price and Kelway Wills and LPAs

Second Marriages

• In 2011, 34% of all marriages in England and Wales took place between couples where one or both spouses had been previously married. Whether the previous marriage ended in death or divorce, many of these couples will have children from previous relationships.

• Remarriage cancels any existing Will that is in place, and the more complicated family set-up means that consideration of new Wills is required

• Second marriages often leave spouses torn between the need to provide for their present partner and ensure that children from their previous marriage receive an inheritance.

Page 6: Price and Kelway Wills and LPAs

How are these problems solved?

(1) Life interest Trust

(2) Division of assets into separate accounts

(3) Outright gifts

Page 7: Price and Kelway Wills and LPAs

Life interest Trust

• Assets are placed into a trust for the lifetime of a spouse/civil partner.

• They can benefit from the asset during their lifetime or until a certain event (i.e. they re-marry or enter permanent residential care)

• If the asset is property then they are able to live in the property or benefit from the income generated

• Cash/investments can also be written into trust so that the lifetime beneficiary benefits from the interest gained.

Advantages:-

• You can control the ultimate destination of your assets - whilst your surviving spouse still retains the benefit of the trust in their lifetime, for example by still living in the house or by drawing income from other funds held in trust

• Care home fee mitigation - funds and assets held within a life interest trust are effectively ring fenced from your spouses’ assets and cannot be taken into account when assessing your partner for care home fees, thus protecting the assets

• Protected against bankruptcy - assets held in the trust cannot be taken in the event of your spouse's bankruptcy as they have no right over the capital

Page 8: Price and Kelway Wills and LPAs

In practice..

• Frequently, the main asset will be the family home. This is often owned jointly.

• Joint tenancy needs to be severed – Application is made to the Land Registry to change the ownership of the property

• Property is then held as tenants in common – This can either be in equal shares or unequal shares

• Wills are drawn up to contain a lifetime trust (with appropriate provisions) and eventual gift as desired by the clients.

• Clients are satisfied that their children (or other beneficiaries) will be provided for. Peace of mind!

Page 9: Price and Kelway Wills and LPAs

Vulnerable Beneficiaries

These are beneficiaries:-

• with learning difficulties living at home with parents

• in receipt of disability living allowance

• unable to manage money

• who are prone to addiction

• in receipt of means-tested benefits

• subject to external influence

Page 10: Price and Kelway Wills and LPAs

How to protect the beneficiary? Discretionary Trusts

Simple Discretionary Trust • This type of trust provides enough flexibility

that a trustee can distribute funds depending on their needs at the time, but leaving the money in the trust to look after a vulnerable loved one

Disabled Person’s Trust • special kind of discretionary trust that can be created

for a person who is incapable of looking after their affairs or is entitled to a disability living allowance at the highest or middle rate

• may include adults who have become unable to look after themselves due to an illness or accident, such as a brain injury

• individual with a learning difficulty or disability would be named as the primary beneficiary of the trust and other beneficiaries, such as other children for example, would be named in a separate class of beneficiaries

• if the trustees decide to make a payment from the capital of the trust to any one of the beneficiaries of the trust they must also make the same payment to the primary beneficiary

Page 11: Price and Kelway Wills and LPAs

Advantages to a discretionary trust..

• Able to appoint up to four trustees to manage how the assets/money are dealt with.

• Can appoint family members who are familiar with the vulnerable person’s needs and also appoint independent persons to ensure that appropriate decisions are made.

• Can give guidance via a letter of wishes which will outline what you would like to happen after you are gone. Items to consider are pocket money, clothes and equipment, trips and holidays, extra support, health care and living accommodation.

• This letter should explain the reason for setting up the trust, guidance on how it should be used, and how the money should be distributed in the event of the beneficiary's death.

• None of the beneficiaries have an absolute right to all the money in the trust, nor the income that comes from it – they only have a potential right. This means that the money and any other assets in the trust will not be taken into account when assessing for means-tested funding.

Page 12: Price and Kelway Wills and LPAs

Lasting Powers of Attorney – What is it?

A Power of Attorney is a legal document

whereby a person gives another person or

persons authority to make certain decisions

on his or her behalf.

Page 13: Price and Kelway Wills and LPAs

The two types of LPA

Property and Financial Affairs LPA

• This enables you to give authority to another person(s) to deal with your property and finances.

• Property and Affairs LPA can be used both when you have capacity to act and when you do not have capacity.

Health and Welfare LPA • This enables you to give authority to

another person(s) to make health and welfare decisions on your behalf, but only if, and when you lack the mental capacity to do so yourself. This can also extend to giving or refusing consent to the continuation of life sustaining treatment, if you wish.

• Health and Welfare LPA may only be used if and when you lack mental capacity to make a welfare or medical decision on your own behalf

Page 14: Price and Kelway Wills and LPAs

Legal Requirements

In order to make an LPA you must:

• Be aged 18 years or over.

• Have mental capacity. i.e. you are able to understand the full extent of the power you are donating to your attorney.

• Be free from any undue influence or duress.

Page 15: Price and Kelway Wills and LPAs

Who should I choose as my Attorney?

• Can be a family member, friend or a professional.

• Over 18 years of age.

• Not a bankrupt.

• Honest and Trustworthy.

Page 16: Price and Kelway Wills and LPAs

Certificate Providers

• Your LPA must be signed by a Certificate Provider. This may be a Doctor, lawyer or other relevant professional; or person who has known you for at least two years who can certify you have the relevant capacity to make an LPA.

• If you have not told anyone else apart from your Attorneys you are making an LPA you will need two people to certify your capacity.

Page 17: Price and Kelway Wills and LPAs

Including Restrictions and Guidance

• You may include restrictions on the use of your LPA.

• You may provide Guidance for your Attorneys

• Paying your Attorneys and out of pocket expenses

Page 18: Price and Kelway Wills and LPAs

What happens if I have not made an LPA or an EPA?

Financial matters • If you lack capacity to make a Lasting Power of Attorney, then it will be

necessary for an application to be made to the Court of Protection for the appointment of a Deputy to manage your property and financial affairs. Can be a family member, friend or a professional such as a lawyer or accountant

Welfare matters • Most care and treatment decisions can be made on your behalf without the

need for a court application. Only in very rare cases will the Court of Protection appoint a Deputy for Health and Welfare

Page 19: Price and Kelway Wills and LPAs

Deputy Application

Court fees:

• Application fee £400.

• Assessment fee (one off on appointment) £100.

• Annual Bond fee (variable).

• Annual supervision fees of £320 are payable in arrears if the patient has assets worth more than £18,000. For clients with less than £18,000 a minimal supervision fee of £35.00 is payable.

Page 20: Price and Kelway Wills and LPAs

Any questions?

If you or a relative or a friend would like professional legal advice about making a new will, amending a current will or making a Lasting Power of Attorney, we are able to help.

Thank you.