Do I need a letter of wishes alongside my will?

Making a will is an important part of lifetime legal planning, but do you need to put all your wishes in your will? Where should you set out your wishes for gifts or your funeral arrangements? Is it appropriate to explain your decisions about your legacy? These are some of the questions which we are asked when people want to make a will for the first time, or if they wish to make provision for something out of the ordinary.

‘For your will to be legally binding, it must be worded using specific legal terminology which does not leave much scope for creativity or for your personality to shine through,’ says Nigel Miller, a Solicitor in the wills and probate team with Kidd and Spoor.

‘Alongside your will, you can write a letter of wishes in which you can express yourself in a more personal way. While such a letter is not legally binding, it does place a strong moral obligation for those involved in your will to follow your guidance.’

Uses for a letter of wishes

Gifts

One of the most common ways a letter of wishes is used is to leave small items, such as personal belongings, to certain beneficiaries without having to include specific gifts in your will. Provided your will references the separate letter of wishes, this is a perfectly acceptable and even a common way of leaving such items. Your chosen beneficiaries will not be legally entitled to the items, but your executors should ensure that they receive them unless there is a very good reason why your wishes cannot be honoured. Leaving gifts by way of a letter of wishes is often useful as it prevents complicated legal issues arising if the item is no longer in your possession when you die, or if your chosen beneficiary has already died.

Funeral wishes

Another popular use for a letter of wishes is to outline funeral wishes. A letter of wishes relating to your funeral can include preferences as to cremation or burial, instructions for your funeral service(s), or even who should be notified of your death and how they should be notified. You might, for example, have an idea of a specific announcement that you would like to be placed on certain social media platforms.

Trusts and children

If your will contains any trusts, or if you are appointing guardians for your children, your letter of wishes could be focused on providing guidance as to how you would like the trust to be managed, or specific ways you would like your children to be raised.

Explanations

As well as offering the opportunity to express your wishes in relation to certain circumstances or specific gifts, a letter of wishes can also be used to explain why you have chosen to structure your will in the way you have.

For example, if you have left a greater share of your estate to one of your children or a charity, a letter of wishes can enable you to explain the decision more fully which may prevent or reduce discord between the family after your death. It will also provide evidence of your views should a claim be made against your estate.

Benefits of a letter of wishes

As a letter of wishes does not have to be drafted in any particular legal language, you are free to set out your views and guidance in your own words. This means that you can feel more confident about the way your wishes have been expressed, as it leaves a more personalised message for your family to hear which is written in your voice. This can be a comfort both to you during your lifetime and to those you love when you have gone.

While the main consideration when making a will is that it covers all necessary provisions, the best wills are usually ones which are simple and straightforward. Creating a separate letter of wishes means that the will itself remains succinct and is less likely to result in complications when administering your estate.

If specific requirements are set out in a letter of wishes, this will sit alongside your will as an independent document. A letter of wishes can be changed as often as needed, without you having to review your will each time, saving you time and money.

Other considerations

Letters of wishes are just wishes, they are not legally binding on anyone involved in (or outside of) your will. If you want your wishes to be binding, they must be included directly within the terms of your will.

Whilst a letter of wishes offers a great deal of flexibility, it will not be suitable for all purposes. For example, if you wish to leave a valuable piece of artwork to a specific person, this is not a gift which is suitable for a letter of wishes and it must be included within your will. Equally, a letter of wishes cannot be used to allow your executors to decide who should be appointed as guardian for your children, this is a decision which you must make and which you will have to include as a specific term of your will.

Probably the biggest downside to a letter of wishes is that, because it is a distinct and separate document, it could get lost or become separated from your will. If this happens, your executors would be unaware of your wishes and these would, therefore, not be followed.

How we can help

A letter of wishes is a useful aid in ensuring that your voice can continue to be heard after you have died, however it is important to remember that it will not be legally binding, and it is equally important to understand when a letter of wishes is and is not appropriate.

As a general rule, anything that you would like to be absolute should be included within your will, however you also need to ensure that everything contained within your will is appropriate and has a solid legal grounding. You should seek advice from one of our solicitors before making any will and before writing a letter of wishes to ensure that it is suitable for your purposes and that you understand the legal, and any other, implications.

Our solicitors can advise you on wills and letters of wishes, as well as drafting the documents for you to ensure that all your requests are clear and legally binding.

For further information, please contact Nigel Miller in the wills and probate team on 01912970011 or email wb@kiddspoorlaw.co.uk

Home improvements, plan for your next move

The pandemic has seen record numbers of us undertaking DIY projects or getting tradesmen in to improve our homes. Our enthusiasm shows no sign of abating either, with the waiting list for builders stretching into next year.

Neil Shearer, a Conveyancing Executive, in the conveyancing team with Kidd and Spoor agrees this trend is likely to continue and adds some words of caution, ‘Always make sure you get any necessary approvals, or you could run into problems when you come to sell your property.’

Here he looks at some of the issues, and how to ensure your home improvements do not cause problems when you later put your home on the market.

 

Planning permission, do you need it? 

Not all alterations require planning permission. Generally, you will only need it if your proposed works constitute development. This has a special meaning under planning rules. It includes structural alterations and the sort of work a builder would ordinarily do. Non-structural work to the interior, like repainting the walls or replacing window frames, does not normally need permission, although special rules apply for listed buildings and conservation areas.

If your proposed works fall within the scope of permitted development rights, you will not require permission either. This exception covers some of the most common types of home improvement, such as small extensions and loft conversions. However, permitted rights are subject to conditions and limitations and may not apply in all locations.

Working out whether you need planning permission can sometimes be complicated. However, your solicitor, architect or local authority can help. If there is still doubt, we may suggest applying for a certificate of lawful development. This would give you peace of mind that your improvements are lawful from a planning perspective.

Not obtaining the appropriate planning permission can have serious consequences. The local planning authority could require you to restore your home to its original condition. Buyers will also want to see evidence of compliance as the planning authority could proceed against them, as owner, in the future.

 

Building regulations

Alterations may need building regulations approval, even if they do not need planning permission. Building regulations cover a wide range of work, for example, the structural integrity of foundations, adequate ventilation, and the safety of any electrical installations. They ensure minimum standards for the design and construction of buildings. Failure to comply could result in the local authority taking enforcement action, including requiring you to remedy any defects.

There are two ways to apply for building regulations approval: a full plans submission and a building notice submission. The former has the advantage of certainty: you know at the outset that, if you follow the approved plans and correct procedure, you will get a certificate of compliance on completion of the works. The building notice route is more ad hoc and involves staged inspections.

In either case, it is important to ensure the building inspector signs the work off when finished and you get a certificate of completion. Keep this safe, as your buyer is likely to want to see it.

 

Restrictions in your title deeds or lease

Your title deeds or lease may contain restrictions, which limit what you can do. For example, they may stop you building on your land without first getting consent from a third party.

Complying with these types of restriction can be problematical. For example, you may not know who to approach for consent in the case of a title restriction, particularly where the restriction was created a long time ago. Applying for your landlord’s consent is usually more straightforward, but you will need to factor in the time it will take and the additional cost.

Failure to comply with a restriction risks legal action. For example, if you fail to obtain the required consent from a neighbouring landowner for an extension, the neighbour could seek compensation or its removal. If you breach the terms of your lease, your landlord could seek to end your lease early.

When you come to sell, your buyers will want to be sure there have been no breaches of title restrictions which could affect them when they become owners of the property. So, it is important to obtain any necessary consents and keep them safe.

 

What to do when it comes to selling your home

Give copies of any documents relating to the alterations to your solicitor. This includes any consents, guarantees, or warranties. This will help answer the buyer’s pre-contact enquiries promptly and get your sale off to a good start. If necessary, we can usually obtain copies of planning permissions or building regulations notices from the local authority. However, this may slow things down a little, especially if they reveal issues which need further investigation.

Sometimes if you have not obtained consent when you should have, you can apply for planning permission or building regulations approval retrospectively. In any case, if the works are more than four years old, the council cannot usually take enforcement action over a planning breach. For building regulations, the period is one year. So, your buyer may agree to overlook a technical breach.

Unfortunately, there remains a small residual risk of enforcement action, for example if the council believes there is a serious safety risk. If necessary, a specialist report or suitable insurance cover may provide additional reassurance for the buyer and allow your sale to proceed.

You can also apply retrospectively for consent required under title and lease restrictions, or title insurance could provide a quicker, pragmatic solution. Approaching someone for retrospective consent could make the risk uninsurable, so it is important to discuss your situation with us early on. We can then help you make informed decisions and avoid any unintentional consequences.

 

We can help

For further information, please contact Neil Shearer in the conveyancing team on 01912970011 or email wb@kiddspoorlaw.co.uk.

Do you need a freezing injunction to protect marital assets?

Once a relationship has broken down, while many couples remain on good terms, sometimes the situation is irretrievable and behaviour can go beyond what is acceptable or legal. In particular, disputes over who gets what in the financial settlement can prompt underhand dealings with the wealthier partner attempting to conceal assets or reduce their value. For example, they may build up debts (personal and/or business), or deliberately squander money in gambling or expensive trips that they did not participate in before. You might be worried that they are giving away valuable art or antiques.

‘If you are worried that your spouse is hiding, selling, or otherwise getting rid of assets to prevent you getting your fair share in the financial settlement after your divorce, then there are legal steps which you can take to protect your share,’ says Jo Scott, a Solicitor in the family team with Kidd and Spoor. ‘One course of action is to obtain a freezing injunction.’

A freezing injunction is a specific type of court order sometimes used in divorce proceedings to protect marital assets from dissipation. The order will prevent your spouse (or former spouse) from being able to deal with those assets and sell or transfer them to a third party.

Unfortunately, your former partner may take steps to rid themselves of assets in an attempt to lessen your entitlements in divorce. It may be of concern when a spouse withdraws large sums of money from their bank account, transfers property to a third party for little or no value, or if they transfer their shares in a company. All of these actions could significantly impact on your financial settlement. It is vital that you act quickly if you suspect your spouse may do this.

What assets does an injunction cover?

A freezing injunction can apply to all types of assets such as bank accounts, property, land, business shares, antiques and pensions.

On occasion it can also apply to other jurisdictions, not just assets held in England and Wales. It is a draconian measure, but it will typically allow an amount of money for your former spouse to live off and ensure they can meet their normal day-to-day expenses, but it will not allow for extravagant spending, or transferring of assets to other parties.

How do I obtain an injunction?

If you suspect foul play, then the most important thing is to act quickly. Your solicitor will need as much detailed information as you can provide about the assets that are at risk and why you believe they are at risk. This information should ideally include the whereabouts of the assets, the value of the assets, why you believe they may be transferred, any evidence you hold to confirm this such as witnesses, emails or text messages. Once in receipt of this information we can advise you on your options and the prospect of obtaining a freezing injunction.

This type of court order is usually applied for without putting your former partner on notice, so they cannot be heard at the initial hearing. If the injunction is granted, it will only be for a short period of time initially, until your former partner has the opportunity of coming back to court and having their say and explaining their position. The court can then weigh up both sides before deciding if the injunction should be extended.

To obtain an injunction, you must satisfy a number of criteria including that there must be a real risk the asset will be transferred or removed to your detriment by your former partner. This is why as much detail as you can provide is important. If the court is satisfied that there is a risk, the judge will move on to consider the ‘balance of convenience’ test. This means the court will weigh up all the facts and decide if the likely damage that would be suffered by you if the injunction was not granted is greater than the potential damage to your former partner if it was to be granted.

The court has a wide discretion when it comes to freezing injunctions and both your conduct and that of your former partner can be taken into account.

Avoiding malicious applications

It is important to note that as an applicant you will be expected to provide an undertaking, which is a formal promise to the court that should it later be discovered that the injunction should not have been granted, then you will pay any damages to your former partner. This is used by the court in an effort to prevent malicious applications.

 

Advantages and disadvantages

The main advantage of a freezing injunction is that it will preserve the asset or assets you believe are at risk of disappearing. Prevention is much better and reliable than attempting recovery after the asset is gone.

Applying for a freezing injunction can also bring a financial dispute to a head and more often than not it encourages early settlement without the need for a formal hearing. This can save costs in the long run.

However, if you apply for an injunction inappropriately, it could be costly for you in terms of having to pay damages to your former spouse.

Not all transfers of assets are aimed at devaluing your former partner’s estate. For example, your former partner may legitimately transfer assets by selling a property at market value or selling a business for the valued rate. These transfers may be getting rid of one asset but they will usually mean an increase in another asset, typically cash in the bank. An injunction would not be appropriate in these circumstances.

An injunction can put a burden on you to provide full documented details of your assets to the court. If the freezing order is to apply to foreign assets also, then you will have the additional step of registering the court order with the foreign jurisdiction as it will not automatically apply.

How we can help

Applying for an injunction is not a step that is taken lightly, and it is important that you seek early legal advice as delay alone could be a reason for your application failing. Obtaining early expert advice is important in order that assets can be preserved, and to ensure you obtain a fair settlement.

For further information, please contact Jo Scott in the family law team on 01912970011 or email cbennett@kiddspoorlaw.co.uk

How going digital can help with your next home move

Covid-19 has encouraged us to do more online, and this is especially true of the property sector. From estate agents offering virtual viewings to solicitors working remotely, the accelerated use of technology has helped us move home safely despite the pandemic.

‘This trend is unlikely to end with the pandemic,’ says Neil Shearer a Conveyancer in the conveyancing team with Kidd and Spoor who provides a round-up of recent digital developments in residential property sector and how they could help your next home move.

Choice of communications

Once you have chosen your next home, you will want to get things moving quickly. So, it is important your solicitor can discuss your needs and send out the initial documents promptly.

The best form of communication will depend upon the individual circumstances, and we will always consider your personal preferences, but there are clear benefits in going digital where appropriate. For example, email is generally quicker than post, and SMS or text messaging can give you instant updates.

Online ID checks

Before your solicitor can start work, we must verify your identity and carry out regulatory checks to comply with money laundering laws. Fortunately, there are online identity checking systems which can speed this process up, often removing the need for a physical meeting. As these systems follow best practice and the recommendations set by HM Land Registry, they also ensure consistency and reduce the need to supply additional identity information later.

Integrated case management

The right software lets your conveyancer manage your move effectively and efficiently, as updating and sharing information becomes much easier. There is no need to search for information in a paper file, or to speak to colleagues; it can be accessed with a single click. Your solicitor can access your transaction details, even if working from home, and provide you with the latest information.

 

Better partnerships

Often there is no substitute for picking up the phone and talking to someone directly.

However, conveyancing involves a lot of written information which is important, and sometimes it is better to share this digitally. This way your solicitor can resolve issues and agree any changes to documents without having to pass paper copies around. It can also result in a more collaborative way of working and better communication, helping to keep your transaction on track.

Conveyancing also relies upon many different stakeholders, including mortgage lenders and government departments. Many of these are adopting new ways of working digitally. Our conveyancing team understand these systems and are experienced in working with them effectively. For example, at the end of your purchase, stamp duty land tax will be accounted to HMRC online.

Digital mortgages

Banks and building societies have also moved many of their services online, including mortgages. It is now possible to create a digital mortgage, without physically signing a deed, and the use of these looks set to increase.

One of the big advantages of a digital mortgage is speed. In the case of a straightforward remortgage, the process takes on average 18 days less than for a similar paper-based transaction.

Electronic sale contracts

The need to work innovatively and remotely during the pandemic has encouraged the wider use of other electronic documents, for example, sale contracts. Instead of signing the contract physically, each party enters their electronic signature (a type of code) when they have agreed all the terms and are ready to become bound legally. This can save time because it is no longer necessary to send the contract out and wait for its return by post.

Transfer of title

As well as the sale contract, the seller will need to sign a deed to transfer their title to the buyer. There are complex legal rules surrounding transfers of land, which unfortunately have not kept pace with modern developments. However, it is still important to get these right to avoid problems proving ownership later.

For example, the transfer must be executed as a deed; the buyer must sign it in front of a witness, who must also add their signature. There has been a lot of debate over whether this can happen electronically, mainly because the witness must physically watch the person signing the deed.

HM Land Registry, the government department responsible for maintaining the register of title ownership, now accepts you can execute a deed electronically. However, it has set out strict requirements which all the parties to an electronic transfer must follow. Electronic deeds can save time and overcome some logistical problems, but they can also bring their own set of issues. So, it is essential to choose a solicitor who has expertise in this area.

Online searches

The use of online platforms to carry out conveyancing searches is more established. Your solicitor needs these to check a seller’s ownership of a property and whether other matters, like planning restrictions, could affect its use. Historically, searches have been one of the main reasons for delay in conveyancing transactions. Carrying them out electronically can significantly reduce turnaround times. Just as importantly, using an online platform means we can quickly check progress, and anticipate any bottlenecks.

Security

Sadly, fraudulent activity has increased during the pandemic with conveyancing transactions targeted because of the sums of money involved. Hackers may attack emails and insecure wi-fi systems. So, it is more important than ever to ensure your transaction is secure.

The good news is digital services can often be safer than traditional channels, provided the necessary steps are followed. For example, an online portal can provide 24/7 access and high levels of security by using a similar authentication procedure to banks.

How we can help

Moving home is a very personal matter, and while we invest in state-of-the-art technology to support you when you move home, nothing can replace the close personal attention of your own solicitor.

The smart use of technology can complement this, letting us keep you updated in the way which works best for you. It can also give you more control over your transaction, allowing you to access information when you need it.

For further information about how we can help with selling or buying a property, please contact Neil Shearer or Christine Blenkinsop in the conveyancing team on 01912970011 or email wb@kiddspoorlaw.co.uk

Probate and overseas assets

Born in Greece and educated in France and Germany before coming to the UK, at his death in April of this year Prince Philip reportedly left a multi-million-pound estate which includes assets overseas. The administration of those assets, and therefore his estate, is likely to take several years to conclude.

‘Overseas assets add a further level of complication to estate planning and administration,’ says Nigel Miller, a Solicitor in the wills and probate team with Kidd and Spoor in Whitley Bay. ‘Foreign assets can often go undiscovered until long after an individual’s death and once uncovered they often result in delays and additional costs, including the potential for those assets to be taxed in more than one jurisdiction.’

Domicile

Domicile is the first thing to be considered to determine which assets pass according to which jurisdiction’s laws.

As a legal concept, domicile is distinct from nationality and residence. A person who was born in England to English parents may not automatically be domiciled in England and Wales at their death.

An added complication is that the UK has three territories for domicile. Whilst an individual may be UK domiciled for tax purposes, as the UK is not a legal jurisdiction, they will be domiciled in either England and Wales, Scotland, or Northern Ireland for the purpose of governing law.

If there is any uncertainty whatsoever about the domicile of the deceased person, you should seek advice on the issue. Evidence may be required to prove domicile and we can help guide you through this process.

Practical considerations

The administration of overseas assets is dependent on the lifetime planning that an individual has undertaken.

A person can specify within their will whether it should apply to all their assets worldwide, or whether the will should only apply to assets held in England and Wales. However, even if a will has been made in England which stipulates that it is to apply to all worldwide assets, some jurisdictions will not allow this.

If a jurisdiction fails to recognise the validity of an English will, this can lead to forced heirship which means that the succession laws of that jurisdiction will apply to the assets held there. The EU Succession Regulation does avoid forced heirship in some cases, but advice should always be sought as to the specific rules of the jurisdiction where overseas assets are held.

In the case of intestacy (where the deceased did not leave a will) the situation is likely to be even more complicated. Intestacy rules are highly dependent upon the domicile of the deceased individual and not necessarily the location of their assets.

Resealing

Where assets are held both in England and Wales and overseas, it may be necessary to reseal a grant. Resealing is the process by which an overseas grant becomes valid in England and Wales. The overseas grant, which has already been sealed in the overseas territory is sealed again with the seal of the English Probate Registry, giving the grant the necessary approval it needs to be authorised for use in England and Wales.

It could be that an overseas grant needs to be resealed in England and Wales, or vice versa. To deal with this, you should seek advice from solicitors in all relevant jurisdictions. Our solicitors are experienced in liaising with experts from overseas and can deal with these liaisons on your behalf.

Tax considerations

UK inheritance tax may be due on both the English assets and the overseas assets. In addition, equivalent succession taxes could fall due in the foreign jurisdiction(s) where assets are held.

As an executor (or administrator) it is your responsibility to ensure that all relevant taxes are paid and that they are paid on time. To avoid personal liability, it is advisable to seek expert advice about the tax that is payable in respect of all assets, no matter where in the world these are held.

Preventing unnecessary problems

Seeking advice during your lifetime in respect of your will and inheritance tax liabilities is the best way to ensure that the estate administration process runs as smoothly as possible when the time comes.

Our solicitors can help you ensure that your assets in England and Wales will pass according to your wishes. If you own property or other assets overseas, you may also need to instruct legal experts in the jurisdiction(s) where other assets are held.

When making more than one will, it is important to ensure that all your solicitors are aware of the wishes you are formalising. The best way to do so is to make sure that copies of each will are provided to every solicitor. Dealing with multiple solicitors can prove costly and time consuming, but our team can help make this easier by liaising with your overseas solicitors directly.

How we can help

It is vital that all worldwide assets are dealt with as part of any estate administration. If you are an executor, you should seek professional advice about your duties and obligations. If you are an individual with overseas assets, forward lifetime planning will make the estate administration easier for your executors.

Our solicitors can advise you on the implications of overseas assets and the process for dealing with this. We can also draft the documents for you to ensure that all your wishes are clear and legally binding.

For further information, please contact Nigel Miller or Noel Dilks in the wills and probate team on 01912970011 or email nm@kiddspoorlaw.co.uk

Valuing a private company or family business in a divorce settlement

Running your own business can be the fulfilment of a lifelong dream, but it also brings stresses and strains which sometimes contribute to relationship breakdown. It certainly adds complexity when trying to agree a financial settlement after divorce.

‘The key challenge is to achieve a fair settlement without jeopardising the long-term financial health of the business upon which both people may still need to rely,’ says Jo Scott, a solicitor in the family team with Kidd and Spoor ‘Determining a valuation for any business takes skill and tends to be a more complex exercise than valuing other matrimonial assets such as the house or a pension.’

Obtaining a business valuation

Like all other matrimonial assets, it will be necessary to obtain a valuation of the family business or private company. In order to achieve a fair settlement, it will be necessary to understand what the company or business is worth and what income is generated from it.

It is usual for an independent valuer, normally an accountant, to be appointed in order that a true and fair assessment of the business can be made. They will need access to information and business accounts, and this is normally provided by way of ‘discovery’ when information is provided from the spouse(s) involved in the business.

If any gaps in this information are suspected, then the valuer may request that further information is provided in order that they can provide an accurate valuation.

Reviewing a prenuptial agreement

Aware of the risks to a family business, founders sometimes encourage or even insist that younger members enter a prenuptial agreement when they get married to protect established business assets.

If you have such a prenup, then the first step will be to look at this and see what was agreed. It is not uncommon for the capital value of a spouse’s interest in the business to be protected entirely in a prenup, meaning it is ring fenced from the assets to be divided. Sometimes the interest in the business is limited in a certain way, for example, only taking into account certain business assets or ventures.

It is also possible for couples to have entered a postnuptial agreement after marriage, which may impact the business division in the same fashion as a prenuptial agreement can.

Appointing a joint valuer

If you are both involved and can agree, you may wish to consider jointly appointing an expert to value the business. This means that the valuer will be instructed by you and your spouse together; they tend to be paid by you both equally and will provide a single expert opinion for you both. This can save time and costs in arguing over valuations. We can advise you if this is appropriate in your individual circumstances.

Factors affecting the valuation

The valuation will depend on a number of factors, including the following:

  • Business structure – it is essential for the accurate valuation of the business to understand its ownership structure – whether sole trader, a partnership or LLP, a limited company with one or more shareholders. The presence of and implications for partners or shareholders will be taken into account.
  • Employment – if one spouse is an employee of the business, rather than an owner, then it may also be necessary to obtain employment law advice depending on the intended settlement of the business asset and whether they are likely to remain involved with the business.
  • Business assets – a service may have few fixed assets compared to an investment business with a portfolio of bricks and mortar or a manufacturing business with plant and machinery. Invisible assets also need to be considered – such as goodwill and intellectual property (patents, trade marks, designs or copyright).
  • Trading pattern – an analysis of historic trading profits and predicted future income will be essential. Subscription businesses such as software-as-a-service may benefit from a predictable income stream, while other businesses may be seasonal or subject to fashion or significant market fluctuations.

It is important to appoint a valuer who has extensive experience in your type of business in order to obtain an accurate valuation.

Disputing a valuation

It is not uncommon for a business valuation to be disputed during a divorce. For example, the spouse not involved in the business may be skeptical of a low business valuation if the couple previously enjoyed a high standard of living. The owner of a business may seek to downplay its value, this can be done in a number of ways, such as delaying progress on trade deals or applying for patents to increase business value. On occasion owners have even sought to hide business assets in offshore accounts or under complex trusts to give the impression the business is not doing as well as it is.

If you dispute the business valuation of your spouse or you do not feel they have been upfront about the true nature of the assets or income of the business, then it may be necessary to obtain an order from the court for discovery on specific information.

We have extensive experience in scrutinising business accounts and company structures and can advise you if an application to the court will be necessary.

What happens next

It may be that the business interest can be set off against other assets such as a pension in order that one spouse can still continue with the business unaffected. If that is not possible then looking at maintenance payments linked to profits may be an alternative option.

The courts tend to be very keen to allow a business to continue as a going concern, and this sometimes means that creative options will be looked at to enable a fair settlement to still be achieved.

If the business is a family run home-based business where children of the family are involved, then they may also have rights.

How we can help

Obtaining early expert advice is important in order that an accurate valuation can be obtained, and a fair settlement agreed for both spouses.

For further information, please contact Jo Scott in the family law team on 01912970011 or email js@kiddspoorlaw.co.uk

Kidd and Spoor Sign Shearer!!

Kidd and Spoor Solicitors

welcome a major new signing, Neil Shearer,

to their expanding property department
in Whitley Bay.

“Neil arrives with many years of conveyancing experience, a solid reputation and following, and is a fantastic addition to our property department and to Kidd and Spoor as a company” said Nigel Miller, director at Kidd and Spoor. “I am delighted that Neil has joined us.”

Nigel’s co-director, Philip Walker, worked closely with Neil for a number of years at a law firm in Newcastle city centre. “I am so pleased to welcome Neil as a colleague. His reliability and experience are guaranteed, and our clients will be well looked after” added Philip.

For generations over more than 150 years, Kidd and Spoor have led the way as the premier solicitors in North Tyneside. The conveyancing team, managed by Christine Blenkinsop, continues to thrive and attract repeat business, founded upon unrivalled levels of client care.

Neil will be working with Christine and Kidd and Spoor’s team of colleagues, to maintain and build upon their productive conveyancing department. He can be contacted by telephone on 0191 2970011 or by email at ns@kiddspoorlaw.co.uk.

 

 

Relying on the concept of ‘next of kin’ – when is this enough?

Next of kin is a commonly used term in everyday language, yet despite its frequent use ‘next of kin’ only provides legal rights where children are concerned and, even then, only in certain circumstances. The general rule is that the parent or guardian of a child under the age of 18 has authority to make decisions on their behalf, but some laws allow children to make their own decisions prior to reaching 18, for example consenting to sexual activity.

‘Whilst you may anticipate that your spouse, or another close relative, would have automatic access to your finances or medical records should the need arise, this simply is not the case,’ says Nigel Miller a Solicitor in the wills and probate team with Kidd and Spoor in Whitley Bay. ‘It is important to understand the legal rights and responsibilities that a next of kin has in respect of your affairs and how you can grant them the powers they might need.’

Why name a next of kin?

Many services, particularly those involving healthcare, ask for details of your next of kin. You can name whoever you feel is most appropriate, however naming that person does not grant them any legal rights or responsibilities. Rather, organisations simply ask for details so that they know who you wish to be kept informed about your care and any decisions that the organisation needs to make on your behalf.

Naming someone as your next of kin in such circumstances does, therefore, have advantages. It ensures that person can liaise with the service provider and that they are kept up to date with your progress and treatment. In many circumstances, care providers will also take into account your next of kin’s views when they are making any decisions about your care. This could include important details about you which would otherwise be unknown to your care giver. For example, they may have knowledge of specific dietary requirements or preferences which they can pass on for you.

The advantages are, however, limited and it is not enough to presume that your spouse or children will be able to take over your affairs if needed without you having taken steps to put proper legal authority in place.

Legal position

All of your affairs, financial and medical, must be kept confidential during your lifetime and may only be released to certain persons, in certain circumstances, after your death.

If a solicitor holds your will, they cannot release this to your children simply because you have said they are your next of kin. Likewise, your GP cannot disclose your medical records to your spouse, even if you named your spouse as your next of kin when you joined the practice. In fact, both these examples would ring alarm bells with a professional, as if your next of kin requested these documents this might be a sign of possible coercion.

The law is designed to help everyone retain their independence for as long as possible. All the time a person has sufficient mental capacity, their decisions are their choice and theirs alone. Even if that person makes an unwise decision, no one else may step in and take that choice away from them. For example, a doctor cannot take someone’s driving licence away if that person has capacity and wishes to continue to drive.

Because of the way the law works, there is often a grey area during a period of time when somebody might need additional help, but they still understand and can make their own choices. For example, this could be during the early stages of dementia when the decline of mental capacity may happen very gradually.

How to ensure your next of kin does have legal rights

The only way to give your next of kin legal rights and empower them to deal with your affairs on your behalf is by appointing them under a lasting power of attorney.

You can make arrangements for this at any time so long as you have sufficient mental capacity. It is, therefore, advisable to plan this well in advance rather than leaving it until your health deteriorates.

Your attorneys may be appointed under:

  • a health and welfare lasting power of attorney, which grants your attorneys the authority to make decisions about your medical treatment and other health care needs; or
  • a property and financial affairs lasting power of attorney, which authorises your attorneys to access your finances and make decisions about your financial circumstances; or
  • under both types.

Without valid documents in place no other person, including your next of kin, may make these decisions for you.

Financial problems without a lasting power of attorney

Without a property and financial affairs lasting power of attorney, no one will be able to access your finances and your bank accounts would be frozen until appropriate authority is granted by the court. In the meantime, important bills could end up going unpaid.

For those who end up in this situation the court may appoint a deputy, however this is a time-consuming and lengthy process.

Health problems without a lasting power of attorney

If you were to become vulnerable without having made a health and welfare lasting power of attorney, and you no longer had capacity to make your own decisions, it would fall to your medical providers to make decisions about your healthcare. Many people, understandably, would rather have loved ones make their decisions so that they can discuss these in advance and make their own wishes clear. For example, if it is your wish to stay living in your own home for as long as possible, you can make this wish known to your attorneys. If a doctor is in charge of this decision, they may decide that you should be kept in hospital for longer or discharged only into the care of a nursing home and, without your legal authority, no one will be able to override this on your behalf.

The court is extremely reluctant to appoint a health and welfare deputy, so for most of those who have not appointed an attorney for health and welfare, only their medical providers will be in a position to make decisions for them.

How we can help

If you want to make sure that your next of kin will be able to deal with your affairs on your behalf, the only way to do so is to prepare lasting powers of attorney.

Our solicitors can advise you on the implications and process and we can help draft the documents for you to ensure that all your wishes are clear and legally binding.

Is now the right time to extend the lease on your home?

If your home is leasehold, you could soon find it cheaper and easier to extend the term of your lease.  This will usually make your property more valuable and, depending on how many years your lease has left, it can also make it easier to remortgage and more marketable when you come to sell.

As part of its reform of the leasehold property regime, the Government plans to improve the statutory mechanism for lease extensions. Here Christine Blenkinsop a Conveyancer in the residential property team with Kidd and Spoor looks at the latest proposals and considers your options if you are a leaseholder.

If you purchased a house or an apartment on a leasehold basis then, unlike with a freehold property, you do not own it outright. Instead, you have the right to occupy for a specific number of years (the term) and over time the term will decrease.  Effectively the property is a wasting asset as, discounting the impact of house price inflation, your home’s value will also go down.

How many years left on your lease?

When there are many years left on your lease, this may not make much difference in practice.

However, many mortgage lenders require a minimum term of 75 years, and the cost of extending a lease term can increase substantially when it dips below 80 years.

Buyers want to be confident they will be able to remortgage or sell on without any problems. So, issues can start to arise when a lease has fewer than 90 years left.

Your right to extend

As a leaseholder, you probably already have a legal right to extend your lease.

  • If you own a flat – this will be for an additional term of 90 years, and you will only have to pay a nominal ground rent.
  • If you own a leasehold house, then different rules apply. Any extension would only be for 50 years, and you will have to pay what is called a ‘modern ground rent’ which will often be higher than the existing one.

If you own a flat, you will have to pay a premium to your landlord, and the law sets out the basis for its calculation. This payment reflects the value transferred from your landlord to you. Your landlord will lose the right to ground rent and will have to wait longer to get the property back. You will not have the ongoing cost of ground rent and will have a longer more marketable lease.

Significantly, if your lease has less than 80 years left, the premium valuation will also include an element of ‘marriage value’. This represents the difference between the value of your leasehold property before and after the extension. Generally, its inclusion will increase the price you have to pay. The shorter the term is, the greater the marriage value will be, and the more your lease extension will cost.

Valuation is a complex area, as is the procedure for agreeing the price with your landlord. You will need to factor in your lawyer’s and surveyor’s fees and pay some of your landlord’s costs.

It is important to be clear about what is involved and what you want to achieve. Your solicitor can explain the process and help you to decide whether it would be a good move for you.

 

Changes in the pipeline

Recently the Government has said it plans to make leasehold ownership ‘easier, faster, fairer and cheaper’. This includes legislation to help owners extend their leases via several measures:

  • a simplified single process will apply to owners of both leasehold flats and houses, reducing the costs and time involved;
  • a right to extend leases more than once;
  • rights to extend for a much longer term, up to 990 years;
  • a change in the basis of valuing any premium, including capping ground rent and abolishing marriage value; and
  • introduction of an online calculator to simplify calculating the premium.

The current proposals lack detail, but the potential savings for those seeking to extend their lease could be significant under the new regime. Removing marriage value from the calculation of the premium alone could make it much cheaper to extend a short lease.

 

The timetable for change

If you are considering extending your lease, you may be tempted to wait for the promised reforms. However, there remains a lot of uncertainty over their extent and timing. The Government has indicated it hopes to bring forward the necessary legislation before the next general election in 2024, but even that date could slip if priorities change. The proposals will also be subject to parliamentary debate and detailed scrutiny, which means they could end up being less far-reaching than some would hope.

 

What is right for you?

When, and whether, to extend your lease is a very personal decision.

For example, if you own a flat and the term will shortly reduce to 80 years, you may not want to delay. Once the term dips below 80 years, the premium must include an element of marriage value, so you will have to pay your landlord more.

On the other hand, if you have a shorter lease, and no immediate plans to remortgage or sell, you may decide to wait and see how any potential reforms could benefit you.

How we can help

Our residential property solicitors are experienced in leasehold extensions and can explain what is involved and help you assess all the pros and cons. By understanding your individual circumstances and goals, we identify the best course of action and may even suggest creative alternatives. For example, negotiating a lease extension directly with your landlord rather than relying on your statutory rights is one alternative, while another would be purchasing the freehold.

Whatever stage your plans are at, however many years are left on your lease, talking things through with your solicitor will help you reach the decision which is right for you.

The implications of alcohol misuse and family arrangements

While many adults drink alcohol responsibly, unfortunately there is a significant percentage of the adult population in England that misuse alcohol.  Government statistics for 2020 show that over half a million adults in England were admitted to hospital, primarily due to excessive alcohol consumption.

When misuse of alcohol is a factor in family breakdown, it can be a particular concern when there are children and arrangements need to be agreed for residence and contact. It is not uncommon that someone with an alcohol problem denies any problem exists, especially if they fear they may not get to see their children.  Meanwhile the other parent will be concerned and fret over the safety of their children in their former partner’s care.

‘The issue of concern for any court looking at arrangements for children is not so much if a parent misuses alcohol, but rather what risk that may present to the children in their care,’ explains Joanne Scott a Solicitor in the family law team with Kidd and Spoor Solicitors in Whitley Bay. ‘If your former partner has issues with alcohol misuse, then ideally they should address those issues by getting professional help.  The courts will support this and recognise they are acting appropriately and in the best interest of their children in addressing their problems.  Being open to obtaining help and looking at what safeguards need to be in place are key considerations.’

Recognising genuine risks

When alcohol misuse is denied, it also tends to increase the acrimony between parents.  Often the concerned parent wants the other parent to have a good relationship with their child but is distressed about the potential risks.

Commonly the biggest risk arises from a parent driving under the influence of alcohol with the child.  However, if a parent misuses alcohol while caring for a child, there can be several other negative impacts on children including potential neglect and normalisation of excessive alcohol use. On many occasions, seeing a parent under the influence of alcohol leaves a child feeling frightened.

It is important that any concern raised is genuine.  A false accusation, made in the hope of preventing one parent seeing their children, will usually backfire.  It could even result in a court finding the accuser as ‘implacably hostile’ which can have an impact on who the children live with.

The use of alcohol testing

If your former partner does not accept that they have a problem, then you can request that they undergo alcohol testing.  You can try and agree this privately between yourselves, or you can ask a court to order an alcohol test as part of an application for the court to look at your children’s living arrangements.  The court cannot force your former partner to undergo testing.  However, if they refuse the court may think they have something to hide, and the judge can draw a negative inference from their refusal which may impact their case and options to see their children.

The testing for alcohol misuse can be carried out in several ways:

  • a urine test shows up recent alcohol consumption only and may not tell you a lot if your former partner is a weekend binge drinker or has abstained from alcohol knowing their testing is coming up, but it can be used in combination with other testing; or
  • a blood test can show up if there has been damage caused to the liver because of excessive alcohol consumption, and it shows up certain markers in the blood that will be elevated if there has been excessive alcohol consumption – phosphatidylethanol (PEth) is the most accurate blood marker as it can only be produced if alcohol has been consumed.

Although usually more expensive, it is also possible to obtain nail clipping analysis or hair strand testing:

  • hair analysis shows the results of alcohol consumption for up to 12 months, although there can be issues which impact the accuracy of hair strand testing such as hair dye, hairspray, wax and gels used, and it is not uncommon for people to completely shave their hair in the hope of avoiding this test; and
  • nail analysis is usually only used if someone does not have sufficient body hair for a hair analysis, as this can provide an analysis for just six months.

 

Ensuring a child’s best interests

If significant concerns are raised about a parent’s alcohol consumption, then the court may order a CAFCASS report, or another expert report such as a physiologist.  CAFCASS represent children’s interests and independently advise the court about what is safe and what is in a child’s best interests.

If alcohol is an issue of concern, then the judge may decide to allow that parent to see their children but put certain safeguards in place.  These safeguards could include, amongst other things:

  • another responsible adult being present to ensure the children are safe;
  • the amount of time spent together being limited to times of the week where alcohol is less likely to be a risk factor, such as avoiding weekend contact if that is the parents drinking pattern;
  • allowing time to be spent via phone or video calls;
  • allowing time to be spent in a public venue where alcohol is less likely to be consumed;
  • have a responsible adult visually assess at the start of contact that the parent is sober; or
  • arranging for a responsible adult to transport children to and from contact to minimise the risk of the parent driving the children while under the influence of alcohol.

How we can help

If you are concerned that alcohol misuse is a problem for your former partner, and that this may impact on their relationship with their children, or you have been accused or have issues with alcohol misuse yourself, then it is important that legal advice is obtained.