Protecting your life assurance policy for your loved ones

A life assurance policy will often form an essential part of estate planning, where policy proceeds can be used to provide the necessary funds to see your loved ones through the estate administration process, until other money and assets can be released. It may also be sufficient to set them up financially for their future or, at the very least, maintain or improve their standard of living.

That said, where a life assurance policy has not been written into a trust prior to death, this will automatically be treated as part of your legal estate after you die. This means that the policy proceeds will not usually be made available until a grant of probate has been obtained, causing unnecessary delay in gaining access to these funds.

It also means that where the value of your estate exceeds the relevant threshold, the policy will be subject to inheritance tax in the same way as any other estate asset.

What estate planning steps should I take to protect my policy?

By using a trust mechanism for your life assurance policy, this will help to avoid going over the inheritance tax threshold and will allow your loved ones to bypass probate, at least in respect of this particular asset. Probate is the legal process of granting your personal representatives the authority to deal with your possessions. 

A trust essentially allows you to set aside an asset, in this case the proceeds of your policy, to benefit a specified person or people. These are known as the beneficiaries. By putting a policy into a trust you can control what happens to the payout from a policy in the event of your death, in some cases providing an immediate tax-free lump sum for your beneficiaries, depending on the type of trust used.

What types of trust can be used to protect my policy?

An absolute trust is ideal for where you would like to name a specific beneficiary or beneficiaries, such as your spouse and/or any children. This type of trust will give each named beneficiary an absolute entitlement to a fixed share of the proceeds on the death of the policyholder, in this way ensuring that the trust fund is paid directly to your loved ones rather than to your legal estate. This means that the money can be released without the grant of probate and will not usually be taken into account for inheritance tax purposes.

In other cases, especially where your children are under 18, you may prefer the flexibility of a discretionary trust. This will again allow you to name a number of beneficiaries, although none of them will have an absolute entitlement. Under a discretionary trust your trustees have a high level of discretion about which beneficiaries to pay and when, although you can provide them with a letter of wishes outlining your intentions as to how the trust should be administered.

The discretionary trust can be useful in the case of parents or grandparents who wish to benefit future generations, depending on the stage that each potential beneficiary has reached in their life when the policyholder passes away.

What advice should I seek when protecting my policy?

If you are considering putting a life assurance policy into trust, you must always seek advice from an independent legal advisor, as the practical aspects and advantages will vary depending on the type of policy and your situation.

It is also worth noting that in some cases there may be tax implications when putting a policy into trust, especially when using a discretionary trust mechanism, so it’s important to secure expert advice tailored to your particular circumstances.

For personal advice please call 01253 629300 or email info@blackhurstbudd.co.uk.

Legal disclaimer

The matters contained herein are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

Can I still move house?

As far as we currently understand the answer is yes, though we will of course continue to monitor the situation. Our conveyancing department will continue to progress existing matters and if you require a quote for a new move please click here to email our new business team or here for an instant online quote.

Robert Jenrick, Secretary of State for Housing, Communities and Local Government made this statement via Twitter:

“Yes – the housing market will remain open throughout this period. Everyone should continue to play their part in reducing the spread of the virus by following the current guidance.

• Renters and homeowners will be able to move

• Removal firms and estate agents can operate

• Construction sites can and should continue

• Tradespeople will be able to enter homes

But all must follow the Covid safety guidance”

Firm Becomes An Alternative Business Structure

Blackhurst Budd Solicitors has become an alternative business structure (ABS) to enable greater flexibility on ownership of the company as it looks to the future.

Historically law firms could only be owned and invested in by qualified Solicitors and external investment was not possible. In 2012 new rules came into effect, which enabled ‘Alternative Business Structures’ to be formed and these permitted investment by non-lawyers.

As of May 2020 there were 875 Alternative Business Structures in England and Wales and 10,300 law firms.

Warren Spencer, Managing Director commented:

“Converting to an Alternative Business Structure gives us an advantage when looking at future investment in the company. Previous rules meant that highly qualified members of staff such as Chartered Legal Executives or Licensed Conveyancers could never become shareholders.

The company will now have access to a larger pool of investment from external sources and the potential to offer a wider range of client services.”

The company now has five Directors including one non-lawyer.

Pictured right: Warren Spencer

When is a statutory will needed?

A will is an important document that, assuming we are of sound mind to make it and understand its implications, can be used to set out how our worldly belongings will be distributed after we die. But what if someone has money, possessions and property but they lack the mental capacity to make a will?

Below we look at how a statutory will can provide the loved ones of someone lacking testamentary capacity with a suitable way forward.

What is a statutory will?

A statutory will is a will that is overseen by the Court of Protection. This court has jurisdiction over the property, financial affairs and personal welfare of people who lack mental capacity to make decisions for themselves.

The Court of Protection has a number of duties towards a person lacking mental capacity, including a duty of care to make suitable provision for the fair distribution of that person’s assets once they have died.

In considering the contents of any statutory will, the court will have regard to the personal circumstances of the individual, including any feelings or wishes they might have previously expressed that could be relevant to the distribution of their estate, as well as the views of those closest to them.

It is this careful and thorough assessment of an incapacitated person’s best interests that can bring the necessary peace of mind for the loved ones of someone who no longer has the capacity to make or amend their own will.

How is a statutory will put in place?

If you would like to make or amend a will on behalf of someone who can longer do this for themselves, for example, because they have become incapacitated through illness or injury, you will need to apply to the Court of Protection.

You can apply for a statutory will in circumstances where the person is not able to understand what making or changing a will means; how much money they have or what property they own; or how making or changing a will might affect the people they know, including those mentioned in the will or those left out.

That said, someone who has merely lost the mental capacity to manage their own finances may still have the ability to make or amend a will. As such, the Court of Protection will need medical proof that the person is lacking testamentary capacity. You will also need to provide various documents in support of an application, including a copy of any proposed will or amendments.

What if someone dies without a statutory will?

If a loved one who has become incapacitated dies without a statutory will, any will that existed prior to their illness or accident will usually still stand. If, on the other hand, they die intestate, ie; without having a will in place at all, certain rules will come into play here. These are known as the rules of intestacy, where no protection whatsoever is offered under these rules for unmarried partners.

Further, in circumstances where the deceased was married or in a civil partnership at the time of death, depending on the value of their estate, this may mean that no provision is made for the deceased’s children.

It is therefore important to seek expert legal advice as soon as possible to ensure that adequate financial provision is made for any dependants and loved ones of the incapacitated person by way of a statutory will.

For further advice please call 01253 629300 or email info@blackhurstbudd.co.uk

Legal disclaimer

The matters contained herein are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

Is there any point having a Will?

Making a Will is something that many of us might defer until we are much older, or never even get around to, especially if we feel like our dying wishes may still be challenged by any aggrieved family members.

Yet whilst it is entirely possible for a dispute to arise as to the contents or validity of a Will after we die – typically in cases involving modern day families, with unmarried partners or children from previous relationships – this, in itself, is insufficient reason to not put a Will in place. 

If anything, the likelihood of animosity between bereaved loved ones is all the more reason to make clear our wishes in the hope that these will be honoured. There are also a number of practical reasons as to why a Will can benefit those that you leave behind.

Why should I make a Will?

A Will is a written document setting out what should happen to your money, possessions and property after you die. This is known as your estate. Making a Will can help to protect your loved ones, and ensure that your estate is dealt with in the manner that you choose and by those that you trust.

Writing a Will is especially important if you have children or others who depend on you financially, or if you want to leave something to people outside your immediate family. If you don’t write a Will, everything you own will be shared out in a standard way, which isn’t always the way you might want.

Your family may also find themselves facing a significant inheritance tax bill, a liability that could’ve easily been mitigated through the use of a well drafted Will.

What if I die without a Will?

If you die without making a Will, the rules of intestacy will come into play.  These rules provide that any surviving spouse or civil partner will inherit all your personal possessions, in addition to any money or assets up to the value of £270,000, and half of the remaining estate. The remaining half will be divided between any surviving children, grandchildren or great grandchildren.

This means that if your estate is worth £270,000 or less, the whole estate will pass to any spouse or civil partner, without any provision for your children or any other loved ones whatsoever. These rules also mean that if you were not married or in a civil partnership at the time of death, any surviving common law partner will have no automatic right to inherit from your estate.

In short, if you die intestate, the way in which your wealth will be distributed, and who will benefit, will be determined solely under these standard rules.

Can I draft my own Will?

Anyone of legal age and sound mind can make a Will, and indeed draft their own Will, although it is important to bear in mind that this is a legal document so it needs to be written, signed and witnessed correctly for this to be valid.

It is also important to remember that unless your financial affairs are relatively straightforward, getting expert legal advice is often best to ensure that the provisions of your Will adequately reflect your wishes, as well as making the most of any reliefs and exemptions for inheritance tax purposes.

Either way, however, whether through a DIY or professionally drafted Will, by putting in writing how you would like your wealth to be divided after you die, this will almost certainly help to head off any family disputes, not to mention making adequate financial provision for those closest to you.

 For further advice please call 01253 629300 or email info@blackhurstbudd.co.uk

Legal disclaimer

The matters contained herein are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

Legal Compliance and Conveyancing Assistant

This role includes the monitoring of legal compliance procedures across the firm in line with SRA and Law Society regulations and also providing administrative support to the Residential Conveyancing Department.

Conveyancing Duties:

• Providing quotations to Clients

• File opening

• Ordering searches

• Assisting with pre-contract enquiries

• Assisting with preparing contract documents

• Preparing files for completion

• Registration of title at HM Land Registry

• Assisting with the monitoring of compliance procedures within the Department

Legal Compliance Duties:

• The monitoring of legal compliance procedures across the firm, to include:

  • Client File Reviews

  • Client Matter Listings

  • File opening / parameter checking

  • Client Feedback

• The production of regular reports on all of the above for analysis by the management team, using a risk management system

• Assisting with Credit Control procedures

The Candidate:

This role would suit a Graduate looking for a permanent role within a law firm.

• Thorough knowledge of Microsoft Office – Outlook/Word/Excel/PowerPoint

• Previous legal experience an advantage

• Excellent administration, organisational and communication skills

• The ability to work on your own initiative

• Excellent time management skills

• Excellent verbal and written communication skills

• High level of computer literacy

To apply please send your covering letter and CV to acm@blackhurstbudd.co.uk

Will I need to sell my house to pay for care home costs?

As we grow older, many of us will naturally worry about the possibility of having to sell our own home to pay for residential care costs, especially if your property is co-owned or you would like to have a legacy to leave to your children.

Below we look at the ways in which the financial capability to fund your own care will be assessed by the local authority, and the likelihood that this may mean you will need to sell your home.

What is the local authority means test?

A means test is a financial assessment undertaken by the local authority as to how much someone will be liable to pay for any residential care that they might need. Generally, the local authority will help to pay for these costs if you are assessed as having capital of less than £23,250.

The means test will take into account how much money you have by way of savings, investments, pensions, benefits or property. Regard may also be had to anything you used to own, thereby preventing people from selling or giving away their property to mitigate any liability for care fees prior to being means tested.

If the local authority thinks you have reduced what you own on purpose, for example, by selling your home at a knockdown price to your children, this is likely to be seen as a 'deliberate deprivation' of your assets where your fees may still be calculated as if you still owned the property in question.

What if I jointly own my home?

If you jointly own your home and your spouse or partner is still living in it, or if any other close relative resides there aged over 60 or incapacitated, the value of your property will not be taken into account by the local authority.

Even where you jointly own your home with someone else but any one of the relevant exemptions do not apply, only your share will be taken into account.

It is also worth noting that your home will be excluded from the local authority calculation where your caring arrangements mean you will remain living at home, or you only go into residential care on a temporary or part-time basis.

What if I solely own my home?

If you are the sole owner of your home, the entire market value of your property, minus any mortgage and sale costs, will be factored into the financial assessment of your means to pay for your own care. That said, you would still be given a period of 12 weeks after you move into permanent residential care, where the local authority will entirely disregard the value of your house.

It is during this period that you will need to consider whether to sell your property or, instead, to opt for an alternative funding arrangement.

What alternative funding arrangements are available?

If the value of your home, or your share of the property, is to be included in any financial assessment, you may want to consider what alternative funding arrangements are available to avoid the sale of the property.

There may be various options available to you, including a deferred payment agreement with the local authority, an immediate care fee plan or even an equity release scheme. However, there are various practical and financial risk factors that must be taken into account, so it is always best to seek expert advice.

For further advice please call 01253 629300 or email info@blackhurstbudd.co.uk

Legal disclaimer

The matters contained herein are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

Firm Welcomes Two New Trainees

Blackhurst Budd are delighted to announce two new Trainee Solicitors, Demi Perrin and Jack Taylor, who both started their two year training contacts in September 2020.

Demi joined Blackhurst Budd in August 2019 after completing a Masters in Law from UCLAN gaining an upper 2:1 degree. Jack also joined Blackhurst Budd in August 2019 after graduating from the University of Sheffield with a Law degree. He studies the Legal Practice Course at the University of Law in Manchester, with an MSc in Law, Business and Management alongside his training contract.

Warren Spencer, Managing Director said:

“Despite the challenges thrown up by the pandemic, we are continuing to invest in our trainees and develop talent from within the business. We appreciate that the strength of the firm lies in the quality of its employees and as a multi-disciplinary practice, the firm is able to offer trainees a broad insight into many different aspects of law.

Demi and Jack will spend six months in four different ‘seats’, covering different areas of law and developing their technical and commercial skills before choosing which legal specialism they wish to focus on.”

Death in divorce

Regardless of any animosity during divorce proceedings, the death of an estranged spouse can be incredibly distressing, not least because this can create even greater uncertainty within an already difficult and complex process. Below we look at why.

What are the rules relating to death in divorce?

In divorce proceedings, you will remain legally married until the final decree in the divorce is pronounced, ie; the decree absolute. If, however, your spouse passes away prior to this point, this will automatically bring the marriage to an end. That said, even though the divorce in itself will no longer be needed, this doesn’t necessarily resolve any outstanding financial issues in your favour.

Equally, if the decree absolute has already been pronounced prior to your spouse dying, but you have not yet finalised the division of assets, the death of your former spouse can result in an even less favourable financial outcome for you.

The timing of any decree absolute, and whether or not any financial agreement has already been reached at the point of death, is therefore crucial here. In particular, if your spouse dies, then the question of whether you were still legally married is hugely important, as this will affect how the deceased’s estate is distributed. 

What happens if my spouse dies before we are divorced?

If your spouse dies before the decree absolute is made, legally you will still be classed as married at the time of death. This means that you will inherit in accordance with the provisions made by them under any last will and testament, or where they died without making a will, under the rules of intestacy.

In cases where your spouse died intestate, this may result in a more favourable outcome for you than under any proposed financial settlement, especially if there are jointly owned assets. If, on the other hand, the deceased had a will that disinherited or made inadequate provision for you as the surviving spouse, you will have lost the benefit of being able to make a financial claim on divorce.

It would still be open to you to bring a claim against the deceased spouse’s estate under the Inheritance (Provision for Family and Dependants) Act 1975, but there is no guarantee of success, as this may be challenged by other beneficiaries.

It is also worth noting that if a financial order has already been put in place at the time of death, either by consent or through contested proceedings, that order will now be wholly unenforceable. This is because a financial order will only become enforceable once a decree absolute has been granted, and a decree absolute cannot be granted when one spouse is deceased.

What happens if my spouse dies after we are divorced?

In circumstances where the decree absolute has already been granted but there is no final financial order at the point that your former spouse dies, you would again not be able to bring a financial claim under the Matrimonial Causes Act 1973.

You would also no longer be eligible to inherit under the intestacy rules, where property would normally pass to a spouse, as well as being unlikely to inherit under the terms of any will, especially where any previous will had been revoked and replaced by your former spouse following the divorce.

This would therefore leave you making a financial claim under the Inheritance Act 1975. In these circumstances, this would be limited to maintenance, which could make a considerable difference to any financial outcome you would have otherwise received on divorce, especially where the majority of the matrimonial assets had been acquired in the sole name of your former, and now deceased, spouse.

Needless to say, given the importance of the timing of any decree absolute, and a final order for financial provision on divorce, it is always best to seek expert legal advice at the earliest possible opportunity.

 For further advice please call 01253 629300 or email info@blackhurstbudd.co.uk

Legal disclaimer

The matters contained herein are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law and should not be treated as such.

Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

Vacancy: Residential Conveyancing Solicitor

An exciting opportunity has arisen within our Property Department for an experienced Residential Conveyancing Solicitor.

The Role

• Manage a caseload of residential conveyancing files from inception to completion, with support.

• Provide an exceptional service both to the client but also to introducers.

• Build strong relationships, with clients and third parties communicating effectively

The Person

• You must be a qualified Solicitor

• You will have experience managing a varied residential conveyancing caseload including leasehold, shared ownership and new build properties

• Must have excellent technical, time management, IT and organisational skills along with a highlevel of communication and client care skills

To apply please send your CV and covering letter to acm@blackhurstbudd.co.uk