When should a lay trustee consult a solicitor?

‘Trusts are typically used to preserve assets for loved ones in private client estate planning, and many trusts are fairly inactive a lot of the time,’ says Nigel Miller, Head of the Wills and Probate team. ‘Often action is only required when the trust is first set up, when assets are distributed, or when the trust needs to be wound up. These events involve strict legal requirements, and you must fulfil your obligations as a trustee, so obtaining advice from a solicitor at key times will help you to ensure full compliance with these duties.’

Requirements during the trust period

When a trust is set up, or if changes are made to it during its term, you must register the trust or update the trust registration. The Trust Registration Service is a legal requirement and it is the trustees’ duty to register the trust, failing which you may have to pay a fine for which you would be personally liable. If you have been appointed as a trustee for a new trust, or if you are a trustee of an existing trust which has not yet been registered, you should contact a solicitor to help you navigate the Trust Registration Service.

If the trust is subject to income or capital gains tax, you will need to submit an annual tax return to report the tax due to HMRC. Tax returns should be completed carefully, and you should seek advice as to any tax mitigation that might apply to the specific trust for which you are acting as trustee. It may be that the type of trust or the assets held within it have special tax benefits, and you could find yourself personally liable to beneficiaries if tax is overpaid as a result of failing to obtain legal advice.

Inheritance tax should also be considered when setting up a trust, paying in further monies, or paying money out. Our solicitors can help to ensure that inheritance tax is fully considered and reported.

Whenever you make a decision as a trustee, for example deciding to distribute assets, to add discretionary beneficiaries, or to change the trustees, that decision must be recorded. This might take the format of straightforward trustees’ minutes, or it may require a formal legal document.

Once a decision has been reached, and recorded, the implementation of that decision will usually require a deed. A deed is a specific formal legal document, and it needs approval from and signature by all relevant parties. The trustees will need to sign, and in certain circumstances so will beneficiaries and/or the person who originally set up the trust, as well as any new parties who are being added. A solicitor can help to draft the deed and ensure that it is legally compliant.

Requirements when the trust ends

When a trust ends, the Trust Registration Service needs to be notified and any final tax return submitted to HMRC. This will probably be the time when further inheritance tax is triggered, which again must be separately reported to HMRC.

Much like when a key decision is made during the trust period, a deed is required to formally wind up the trust and bring it to an end, so it is advisable to consult a solicitor on this final step.

How can we help?

It is relatively straightforward to be a trustee while the trust is simply accumulating income, but when action is required matters become far more complex. As a trustee, you are obligated to adhere to certain rules and requirements, and your decisions should be recorded and actioned appropriately.

Our solicitors can help you to ensure compliance in your role, to accurately draft relevant documentation, and to liaise with relevant organisations. For further information, please contact Nigel in the Wills and Probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

If you have been asked to be an attorney for someone under their power of attorney, whether for finances or health and welfare, then they have placed their trust in you to act in their best interests at all times. This will also be the case if they did not have a power of attorney and the Court of Protection has appointed you as a deputy.

‘In practice, this can be easier said than done with difficult decisions such as whether the person should be cared for at home or in a nursing home setting, whether they should receive specific medication, or whether their house should be sold,’ says Nigel Miller, Head of Wills and Probate at Kidd & Spoor.

Fortunately the Mental Capacity Act provides guidance and sets out various factors that you must consider when deciding what is in another person’s best interest. It is important to follow what the Act says, and a solicitor can help you to understand your obligations under the law.

Mental Capacity Act factors

The key things to consider when making a best interests decision are:

• whether the person is likely to regain capacity to make the decision at some point in the future;
• the person’s general beliefs and values;
• the person’s past and present wishes and feelings;
• whether the person has made any written statement about their wishes;
• as far as is possible, you must also permit and encourage the person to participate in their own decision making; and
• you must also take into account the views of anyone who is involved in the person’s care.

If the person is likely to regain capacity, then you should factor this into any decisions you make, ensuring that they are as temporary as is suitable for the circumstances. Depending on the decision to be made, and the surrounding circumstances, it may also be appropriate to delay the decision if the decision cannot be temporary, or would be significantly life-changing, and it is not urgent.

If they have some capacity to participate, you should make sure that they are given the opportunity to do so as far as possible. For example, somebody may have capacity to decide what they want to eat for their dinner but not what medication they should take.

How to gauge a person’s wishes and feelings

Ideally, if you are appointed as someone’s attorney, you should discuss with them in advance what they would like to happen in various situations. However, this is not always possible (for example, if you are appointed as a deputy, the person will have already lost capacity and you may no longer be able to have certain conversations). Circumstances can change over time, and questions may arise which you have not considered.

Whilst any previously discussed wishes and feelings (or any that the person has recorded in writing) would be the most important factor, some useful guidance from previous cases in this area of law is that the following should be considered:

• what was the person like before they lost capacity?
• what was their job or their hobbies?
• what was important to them?
• what were their likes or dislikes?
• did they have any specific religious, spiritual, or ethical beliefs?

Involving others in a best interests decision

If you have co-attorneys, you should ideally all come to a best interests decision unanimously. Even if you are acting alone, it is useful to consider the thoughts of the person’s family and friends.

Where the decision to be made is one of a medical nature, you should also bear in mind the views of medical staff involved in the person’s care. Key questions to ask the medical professionals are what the risks and benefits of each possible option are, the likelihood of those risks or benefits occurring, and the seriousness of each risk and benefit.

If you are concerned that the correct decision may not be made, you should request a best interests meeting with medical staff. This can greatly assist with the decision making process and help to reduce the pressure you may feel around having to make such a decision on someone else’s behalf.

What if there is a disagreement?

Best interest decisions should be taken carefully and with consideration of all the relevant circumstances. One person’s best interest may not mirror another’s, even if they are a couple or they are closely related or otherwise heavily involved in one another’s lives.

If there is more than one attorney and you cannot agree on something; whether one can make a decision without the other(s) will depend on the way the Power of Attorney was set up. If attorneys are appointed jointly and severally, one may make decisions and authorise actions without the others necessarily agreeing. Practically, this is likely to cause upset, and you should always seek to agree in the first instance or opt for some third-party input or mediation if agreement cannot be reached.

If you are appointed under a Health and Welfare Lasting Power of Attorney, the final decision lies with the attorney(s). This does not, however, prevent any person from contesting your decision if they believe it is not in the best interests of the person you are acting for.

In the case of continuing disagreement, an application can be made to the Court of Protection to intervene and make a ruling.

How can we help?

If you are struggling with making a best interest decision or you wish to understand the law in this area a little more clearly, our solicitors can help. If you have concerns about the actions of another attorney, or any decision they have made, our litigation team can assist.

For further information, please contact Nigel in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk

‘Being an executor is an important role and a serious responsibility,’ says Nigel Miller, a Head of wills and probate with Kidd & Spoor in. ‘Even a simple estate can be more difficult than many people realise and you should ensure that you understand the role and are willing to take on the responsibility before starting to act.’

Seeking advice at the outset from an experienced solicitor is the best way to understand exactly what being an executor entails and to help you reduce the chances of anything going wrong along the way.

How to ensure a smooth estate administration process

Good organisation helps things to run smoothly from the outset. You should think about the steps that will be required and ensure that you are prepared for each part of the process. Professionals can help to guide you.

Solicitors know how to run an estate and instructing a solicitor to deal with the day to day administration can relieve a lot of pressure. Involving a solicitor can also be useful for facilitating introductions to other reputable professionals that you may need along the way, such as estate agents, valuers, auctioneers, or tradespeople.

It is important to make sure that you have the correct will and any other relevant legal documents. You should undertake a thorough search of all the person’s paperwork to ensure you are working from the most recent legal documents. In addition, a solicitor can help you to search the records of local solicitors or other companies that may hold original testamentary documents.

Once you have established that you have the correct will, you need to be clear as to its terms and the relevant laws for dealing with the will. Ignorance is not a defence to mistakes made by an executor if they could have sought advice. As such, you could be personally liable if the law is misinterpreted or misapplied.

Communication is key and you should talk openly to others involved in the estate from the outset. This may include co-executors, beneficiaries, or other family members. Being open and honest can help to prevent, or at least minimise, disputes. However, if any dispute does arise it is important that you remain impartial whilst still communicating clearly with all parties. A solicitor can help you to navigate the legal and practical difficulties of an estate dispute.

Keeping a list of all the assets and liabilities from the beginning of the estate administration (and adding to that list as and when you become aware of any additional financial details) will not only mean that you have a clear record of the assets that exist and their values, but it will also allow you to report to the beneficiaries with ease.

You should obtain a professional valuation for any personal items (such as jewellery) as soon as you can. For probate and inheritance tax, it is important that valuations are accurate for the date of death. The sooner a valuation is obtained, the easier it will be for the valuer to accurately assess this. A solicitor can recommend a reputable valuer. Once valued, personal items should be insured and stored safely until they can be passed to the beneficiaries. Again, keeping a list is a useful tool. Once you are ready to pass items on to the beneficiaries, you should do so in person wherever possible. If it is not possible to personally hand over items, you should send them via secure postage or courier. If items are lost and you have not done your utmost to keep them secure, you could find yourself personally liable for the beneficiary’s loss.

As well as small personal items of value, you should also make sure that any property or vehicles are insured and secure so that if any damage occurs you will not be personally liable for this. Property should also be checked regularly by you to ensure that no damage or loss has occurred. It is likely to be a strict term of the insurance policy that the property is checked at regular intervals.

Finally, remember that you may need to be patient. Estate administration often takes longer than you might think, not least of all because you are reliant on other institutions whose timescales are out of your control. It is far more important that you do a thorough and accurate job than it is to have the matter dealt with quickly. Rushing can cause things to be overlooked and, if you have finalised and distributed an estate too soon, you could find yourself facing disappointed creditors or beneficiaries whose money must be paid somehow.

How can we help?

As an executor, it is imperative that you know the rules you must adhere to and that you are able to commit fully to the role. If you are unsure about taking on the role in the first place, or you would like some help dealing with the administration of the estate, our solicitors can help you to ensure that the estate is administered properly and that you are protected from personal liability.

For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email nm@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Whether the beneficiary of an estate is entitled to inherit a small personal item, a share or even the majority of the assets of the person who died, it can be a stressful time for them while they wait for probate to come through. Delays at the probate office are outside your control, but if you are an executor there are steps that you can take to avoid some common problems which can arise when dealing with beneficiaries.

Nigel Miller, a Head of  wills and probate team with Kidd & Spoor Solicitors explains, ‘No matter how large or small a beneficiary’s entitlement, problems can sometimes occur if assets are lost, if a will is unclear or has been poorly drafted, or if communications and trust break down. In such cases, it is a good idea to instruct a solicitor from the outset, as they can help to correctly interpret the will and can act as an intermediary between you and the beneficiaries.’

Nigel looks at some of the common problems and how to avoid them.

Be clear about your legal duties

The first thing to do is to read the will carefully to make sure that you are aware of its terms and understand these. If there is no will, then you should familiarise yourself with the intestacy rules and seek legal advice if at all unsure.

Executors have many very strict duties and ignorance is not a defence against potential personal liability if these duties are not adhered to.

Communications

Executors have a duty to administer the estate in accordance with the interests of the beneficiaries. It is good practice to keep beneficiaries informed of progress, so that they think things are not being held up due to inefficiency, unnecessary delays, or anything more sinister.

You should communicate with the beneficiaries as early as possible in the process. Beneficiaries are entitled to be told that they are due to receive a share of the estate, as well as exactly what that share entails.

Avoid a conflict of interest

Appointing someone who is a beneficiary of a will as the executor is common and does not in itself give rise to a conflict of interest. However, any actions you take and decisions you make in respect of the estate as executor must be in the interests of the estate and all beneficiaries.

If you are aware of existing issues between yourself and any of the beneficiaries, then you should address these early to avoid being accused of any wrongdoing along the way. For example, if you have had any personal disagreements with another beneficiary in the past, you could reach out to ensure that person that you take your role as executor seriously and that you intend to act in accordance with the will and for the benefit of all beneficiaries.

If you are appointed as executor alongside someone else, you may wish to ask your co-executor to take the lead in any communications with the difficult beneficiary to ensure that your personal issues do not get in the way of the estate administration. Alternatively, if you are the sole executor and you do not feel comfortable dealing with the beneficiary in question, you may appoint a professional to act on your behalf. This could simply be a case of the professional being appointed to deal with day-to-day matters relating to the estate administration, or you could appoint them as your attorney to act in your place.

Missing items

If you are the executor of a will that includes gifts of personal items then, you will need to deal with those items according to the specific terms of the will.

It is important to ensure that any property is not cleared too hastily. You, as executor, are responsible for searching for all personal items mentioned in the will, so you should not let others go through belongings until you are confident that you have read, and understood, the terms of the will and that you have secured all personal items mentioned.

If an item is cleared, or taken by another person, you could find yourself personally liable to the beneficiary for whom the item was intended.

Problems can arise if any items have been lost or given away during the testator’s lifetime. If you cannot locate any items mentioned in the will, what happens with that beneficiary’s entitlement is dependent on the exact wording of the gift. Whilst some types of gift would simply fail, others might have to be honoured in some other way instead, such as a monetary equivalent. If you have taken all reasonable steps to locate the item and cannot, then a legal professional can help you to determine the appropriate next steps according to how the gift is worded. If you mistakenly deem that a gift has failed when it should in fact have been substituted with a monetary equivalent, you would be personally liable for the beneficiary’s loss.

Interpreting the will

Problems can arise if a will was poorly drafted or homemade, especially if the terms of the will are unclear and you may struggle to decipher exactly who gets what from the estate.

Alternatively, a will that was well drafted and perfectly clear could be based on misunderstood instructions. Perhaps, the testator made promises to family members or friends during their lifetime which have not been honoured in the will.

Either way, you may end up dealing with a potential beneficiary who is disgruntled and you will need to tread very carefully to avoid things escalating into a legal dispute.

As executor, it is up to you to ensure that the will is correctly interpreted. If you are aware of any potential dispute, you should speak with everyone concerned to ascertain all the different positions. If you do not have the appropriate legal expertise, you should seek advice. If you distribute the estate incorrectly, lack of knowledge will not constitute a valid defence in any claim against you if you failed to obtain advice,

Exclusions

It could be that certain family members or friends were deliberately left out of the will, or perhaps there is no will and certain people are upset because intestacy laws do not provide for them.

You should listen to any concerns that beneficiaries or potential claimants may have, but avoid taking sides or making any statements about your views on their claim. If a case is brought forward, your words could be used against you or another beneficiary.

Aside from disappointed beneficiaries, a claim could be made that the will is invalid due to the testator not having had the requisite capacity when it was made, or being placed under undue pressure to make the will. In such a case, whilst it is important to communicate openly and to share what information you can about the will, you should ensure that you are only providing factual information and not opinions. If a claim is anticipated, it is important that you remain impartial between the existing beneficiaries and those seeking to make the claim.

Calculations and distribution

Towards the end of the estate administration process, beneficiaries should be provided with estate accounts. Keeping beneficiaries informed throughout goes a long way to help prevent disagreements.

A beneficiary may disagree with the valuations you have included for certain items, for example. Whilst it may not be practical to discuss every single estate asset with each beneficiary and to ensure their agreement to valuations obtained, you should make sure that you obtain professional valuations of all items in case of a later dispute arising.

How can we help?

The role of executor is a serious one that attracts strict requirements.

Professional legal advice will help you to ensure that you are aware of the legalities and that you deal with the estate, including liaising with beneficiaries, correctly and fully. Our solicitors can help you to be sure you have completed all steps required and to navigate any disputes.

Contentious probate is increasingly common and is tricky to deal with. If you receive any indication that someone may make a claim against the estate, you should contact us immediately.

For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email nm@kiddspoorlaw.co.uk.

Part of the success of TV shows like the BBC Antiques Roadshow is the thrill when a long-cherished family heirloom turns out to be surprisingly valuable, for example a piece of china that has been on display in the home for many years. Occasionally, a rare masterpiece hits the headlines in the art world, such as the Caravaggio painting found in an attic in Toulouse in 2014; but if your choice of art is NFTs (non-fungible tokens) or you invest in cryptocurrency, then these assets may never be found if you fail to take appropriate steps to protect this part of your legacy.

‘Cryptocurrency, NFTs and other digital financial assets have grown in popularity hugely over recent years,’ says Nigel Miller, Head of the Wills and Probate team with Kidd and Spoor Solicitors in Whitley Bay. ‘With some NFTs changing hands for eyewatering amounts of money, you do not want these assets to be lost to obscurity. It is important to ensure careful estate planning and a well-drafted will, so that everything passes according to your wishes.’

How are crypto assets lost?

If you die without making the existence of your cryptocurrency or NFTs known to your executors and loved ones, it can easily be overlooked. Problems can also arise if you lose mental capacity.

Digital financial assets are owned exclusively online, and the platforms that hold them are unregulated. There is no physical, tangible asset that can be realised in the way that you are able to withdraw cash from a bank account and each platform is entitled to operate by its own rules and systems. This makes it particularly tricky to trace and prove ownership of digital financial assets without the appropriate information.

Ownership of a digital financial asset is proven by what is referred to as a ‘private key’. This is, typically, a long series of randomly generated numbers, letters or words. If the key is lost, or you are unable to remember it or find it, then there is no way to access or transfer the asset as there is no password reset facility.

This can make things extremely challenging. If you are the executor of an estate that you believe includes digital financial assets, or an attorney under a power of attorney, a solicitor can help you to consider the practical steps to take.

Documenting your wishes

When making your will, you should include a reference to your digital investments. It is not necessary to specify the exact holdings, but you should refer to the type of holding and the company it is held with.

You then need to consider what you wish to happen with these assets.

• If you intend for a specific person to receive those assets, you should name the asset and the person you wish to receive it in the will itself as a specific legacy. These types of gifts require particular wording to ensure legal validity.
• If you simply intend for the value of your digital financial assets to pass to your residuary beneficiaries, then you need not reference them specifically in the will, but you should set them out in a separate document.

 

How to ensure your digital financial assets are not lost

Usually, it is inadvisable to write down passwords but, with cryptocurrency that can only be accessed via the private key, it will be imperative that you leave a full list of your private keys so that the assets can be called in and distributed. The security of these details remains paramount during your lifetime, so you should keep the list somewhere safe that only your executor knows about.

A will made by our solicitors will be stored securely on your behalf, and we can also store your list of private keys and pass this to your executor after you have died, or to your attorney in the event that you lose mental capacity.

What other steps should you take to secure your digital financial assets?

It is not just when you die that your crypto assets might need to be accessed. For example, if you lose mental capacity and require care then your attorney may need to sell some digital investments to help pay for this.

As well as making a will, you should ensure that your lasting power of attorney for financial affairs includes a reference to your digital financial assets, stating where they are held, and how they can be accessed so that your attorney can use these funds for your benefit.

How can we help?

When collecting in the assets of an estate, digital investments are much more easily overlooked and lost on death than traditional assets. To avoid this situation, you should make sure that their existence is mentioned in your will and any power of attorney, and that your private keys are safeguarded and stored for your attorney or executor. It can also be a good idea to discuss your assets with your executor and attorney ahead of time, verbally ensuring that they are aware that your estate includes digital financial assets.

Professional legal advice and a professionally drafted will protects your assets for your loved ones. For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

‘If you have a child with a disability, you may be concerned about what will happen to them when you are no longer around,’ says Nigel Miller, a Director in the wills and probate team with Kidd & Spoor Solicitors Ltd.

‘Ensuring a child with disabilities is provided for sufficiently in the long term can be tricky to navigate, and it is best to seek professional advice tailored to your circumstances and the needs of your child.’

Considerations when leaving money to a disabled child

If your child is in receipt of state benefits, leaving money to them outright could affect those benefits and cause your child’s income to drop. Rather than being able to spend their inheritance as they choose, it may end up being counted as their income until the funds are depleted.

Perhaps your child would not be able to manage a sudden receipt of significant funds and, if you left all your wealth to them outright, they would not know how or where to invest the sums. You might also be concerned about the potential for other people to take financial advantage of your child if you were not available to protect them.

If you have more than one child, it could be that a child with disabilities requires more financially than the others. A solicitor can help you to consider the fairness and appropriateness of leaving money to your children in unequal shares in light of all the current and likely future circumstances, as well as advising you on any potential claims that could arise.

Often a trust arrangement will be the most suitable approach in any of these circumstances. There are many different types of trusts, some of which can help to preserve access to state benefits. Others help ensure that all children ultimately benefit equally, whilst placing enough emphasis on your disabled child to provide for their lifetime needs. Leaving money to a disabled child under a trust also allows you to appoint trustees to manage the funds on your child’s behalf, meaning that someone you trust will be able to decide how the money is spent and to ensure that this is in line with your child’s needs and best interests.

Dos and don’ts of financial provision

Everyone’s circumstances and needs are unique, and so before making any financial provisions it is important to seek legal advice specific to your family situation.

If a trust is your best option, it may be that a discretionary trust is most appropriate. Another commonly used trust for disabled children is a disabled person’s trust. However, each type of trust has a unique key purpose and specific tax implications so personalised advice is critical to ensure that you have opted for the trust most suited to you and your family.

When opting for a trust, deciding who the trustees should be is of utmost importance. Your trustees will be responsible for continuing to ensure your child is provided for, so it is imperative to choose people who you trust, who make good financial decisions, and who understand your child’s needs.

A common misconception is that a disabled child should simply be bypassed under the will so as to avoid adversely affecting their state benefits. Doing so is never a good idea, even if you anticipate that other family members will provide for them using their own share of inheritance. Not only does this run the risk that those family members may act differently, but circumstances outside of their control may mean that they cannot act as agreed.

For example, if you were to leave your entire estate to your sister on the assumption that she would ensure your disabled child is provided for, your sister could end up divorcing, becoming bankrupt, dying, or becoming mentally incapable. Any of these circumstances would redirect the inheritance away from your child, despite any contrary intention you and your sister may have.

Providing for disabled children in non-financial ways

As well as thinking about how to ensure your child is provided for financially, you should also consider who would look after them. A guardian should be appointed for any child who is under 18 to ensure that someone appropriate is available to care for them if you no longer can.

If your disabled child is over 18 you cannot appoint a guardian for them, even if they would not be able to look after themselves. However, you can leave detailed guidance with your will as to who you would like to unofficially look after your child and any specific care you would like them to provide. A solicitor can help you to understand the legality of such guidance and to ensure it is accurately drafted.

As well as considering what might happen to a disabled child after your death, it is important to consider the possibility that you may one day no longer have the capacity to continue providing for your child during your lifetime. In this instance, a lasting power of attorney can help. A lasting power of attorney allows you to decide who makes decisions on your behalf should you no longer be able to make those decisions yourself. If you have a disabled child, you will also need to factor in their position should your capacity change. A carefully drafted lasting power of attorney can allow for continued financial provision or other arrangements for your child.

Depending on the exact circumstances of your child’s disability, their age, and other factors, it could also be appropriate for them to make a lasting power of attorney or for someone to make an application to the Court of Protection on their behalf. Again, legal advice should be sought bearing in mind the situation as a whole.

How can we help?

Providing for a child with disabilities must be carefully navigated to ensure that everyone’s needs are met.

Our solicitors can help you to be sure you have taken the best option for you and your family and that you have made a fully informed decision.

For further information, please contact Nigel Miller, Philip Walker or Jess Sayer in the wills and probate team on 0191 2970011 or email wb@kiddspoorlaw.co.uk

 

The role of a deputy is similar to that of an attorney. If you are acting as an attorney, this will be because the person you are acting for specifically chose you to act and they made a document called a ‘power of attorney’ at a time when they had capacity to do so.

A deputy on the other hand, is someone who has had to apply to the Court of Protection to act on behalf of someone who no longer has capacity. The Court of Protection takes the appointment of deputies extremely seriously, as it is important to ensure that the person applying to act is suitable, despite not being someone who has been specifically chosen for the role.

A key way in which a deputy is held to a higher level of accountability than an attorney is by way of financial reporting.

‘If you are a financial deputy for someone, you will need to report annually to the Office of the Public Guardian,’ says Nigel Miller, a Director in the wills and probate team with Kidd & Spoor Solicitors in Whitley Bay

‘This reporting includes providing a thorough and accurate account of all monies received and spent, as well as an explanation of any decisions you have made. To ensure compliance with the reporting duties, it is vital that you retain copies of all statements, receipts, invoices, and other such paperwork throughout the year. For reporting terms, the year begins on the date on which you are appointed rather than at the beginning of the calendar year or tax year.’

What you should report and what evidence needs to be sent

The reporting documents include details of all assets and liabilities of the person for whom you are appointed as deputy, as well as the income and expenditure throughout the year. This should include any state benefits, any interest or other income payments from investments, as well as any other income received on behalf of the person for whom you are acting. Department for Work and Pensions (DWP) letters, bank statements, and investment statements should be collated to offer as proof of income.

Expenditure may include such items as care costs, living expenses, food and drink, activities, and ad hoc purchases. Acceptable deputy expenses, for example travel costs, may also be claimed, provided sufficient proof is supplied. Again, receipts and other supporting documents should be collated throughout the year to be submitted with the report.

In addition to financial information, you will need to state in the report what decisions you have made on the person’s behalf and explain your reasons for having made those decisions. You are also required to confirm whether anyone else was involved in the decision-making process and, if so, who they are and what involvement they had.

How to approach financial reporting

Whilst the report is only made at the end of each deputy year, it is advisable to collect paperwork throughout the year and collate this into a thorough record. That way, when it comes to preparing the report, all the information you require is readily to hand.

Keeping clear records throughout the year will make end of year reporting quicker and easier. The records you keep should include any contact you had with the person, any contact the person had with others (such as care providers or other decision makers), all decisions made on the person’s behalf and why those decisions were made, all money spent and received.

At the end of the deputy year, the report is due within two months. You should begin working on the report as soon as all the relevant information is available, and you should aim to submit the report within the first month. Leaving it to the last minute could result in discovering too late that you are missing certain details, which could then make the report unnecessarily late and make you seem unreliable.

If the two months are close to expiring and, despite all your best efforts, you still have not received all the information you need, make sure that you apply to the Office of the Public Guardian for an extension. You will need to explain the reasons for your request and when you anticipate being in a position to finalise and submit the report. Do not simply fail to submit the report in time without first requesting an extension, as the Office of the Public Guardian will not look favourably upon this.

How we can help

If you are at all unsure about your reporting duties or the details you should be including, seek help from our solicitors. We are familiar with the format of the deputy reports and we can help ensure your report is accurate and the rules are correctly followed, either by checking this for you or completing the report on your behalf.

If you are acting as a deputy and you are concerned about any other aspect of the role, or you feel you can no longer manage, our solicitors can offer you impartial and expert advice. Whilst you cannot delegate or transfer your duties as a deputy, we can assist you by offering support and advice with regard to any decisions you must make.

The role of a deputy is a serious one that attracts strict requirements. Professional legal advice will help you ensure that you are aware of the legalities and that you report correctly and fully. Our solicitors can help you to be sure you have covered all the information required.

For further information, please contact Nigel Miller, Philip Walker or Jess Sayer in the wills and probate team on 0191 2970011 or email wb@kiddspoorlaw.co.uk

If you are married, in a civil partnership or cohabiting with a long term partner, and thinking of making or updating your will, you may have heard the expression ‘mirror wills’ and wonder if this would be suitable for you.

‘Mirror wills are wills made by two or more people in identical or very similar terms – effectively mirroring each other’s arrangements,’ explains Nigel Miller, a Director in the wills and probate team with Kidd & spoor Solicitors Limited.

‘For many couples, mirror wills may be the most appropriate option for your needs, but you should always check with a legal professional as some circumstances might mean that mirror wills are not the best approach for you.’

What are mirror wills?

Mirror wills are used to ensure that everything you own passes according to the shared wishes of both parties.

Most commonly, mirror wills are written in identical terms so that on the death of either one of you any sole or joint assets pass to your jointly chosen beneficiaries in the same way. Each will might sometimes include separate small gifts, such as personal items or gifts of low monetary value, and these gifts may not be identical in both wills.

How are mirror wills used?

A typical set up for mirror wills is for everything to pass to the surviving partner, and then after they die everything will pass to those people or charities that you both chose together. This might include your own children or grandchildren, members of your respective families, or any joint friends or charities that are close to your hearts.

Before making mirror wills, it is important to fully discuss your wishes together to ensure that you are both completely happy with the decisions made as regards who should receive what.

Mirror wills are particularly useful for those in second marriages or with children from previous relationships, as they help to ensure that both sides of the family are treated fairly and equally.

If you decide to make separate wills and you do not mirror your wishes, any money or property passing to the survivor after the first death, will then ultimately pass according only to their wishes.

Advantages of mirror wills

Mirror wills are useful to protect the interests of the survivor as well as the remaining family of the first person to die, for example:

• If you have children from a previous relationship, and you and your partner make separate wills leaving everything to each other initially then everything to only your own biological children after the second death, the entire wealth of the first person to die would pass to the survivor and then onto the survivor’s children only, therefore leaving the children of the first person to die without any inheritance.
• Alternatively, you may think it appropriate to make sole wills stating that everything passes to your respective children as soon as you die, however this could leave the surviving partner without sufficient funds for the rest of their life.

By contrast, mirror wills allow you to specify that everything should pass to each other initially but then to all of your children equally on the second death. This means that the survivor does not miss out on vital funds and that all of your children are treated fairly in due course.

For married couples and those in a civil partnership, mirror wills are also likely to be beneficial for the purpose of inheritance tax, as including each other as beneficiaries initially allows you to take advantage of the tax free allowances available.

Disadvantages of mirror wills

If you retain completely separate finances and do not rely on one another financially, mirror wills may not be for you. If one of you has your own business which does not involve the other, you need to provide for your co-owners – otherwise the shareholder agreement or partnership agreement might conflict with the benefit of making mirror wills. However you should always seek advice from a professional to help you understand the full implications of making separate wills.

Whilst mirror wills are often the most advantageous choice for couples, they do not come with any assurance that the survivor will not change their will, make a new will, or remarry following the first death.

Before making your mirror wills, it is imperative that you completely trust one another to stick by any joint decisions you make once one of you is no longer alive. As there is no legal obligation on the survivor to retain the terms of the mirror wills, they could simply make a new will leaving everything to beneficiaries of their own choosing, such as their own biological children. As such, mirror wills might not be suitable if there is any element of distrust or if your families do not get along, depending on the severity of the familial disagreement. There are alternative options available in these circumstances, so you should seek professional advice to make the appropriate choice for your needs.

It is also important to note that any later marriage or civil partnership would automatically revoke the survivor’s will. As such, your jointly chosen beneficiaries could miss out even if this is not the survivor’s intention. If the survivor does remarry, they should seek legal advice to ensure that their will continues to accurately reflect your joint wishes.

How can we help?

Mirror wills are often a good option, but this is dependent on your individual circumstances, and you should seek legal advice before making any new will.

Our solicitors can guide you through the process, ensure you are fully informed and help you to make the best choice for your needs.

For further information, please contact Nigel Miller, Philip Walker or Jess Sayer in the wills and probate team on 0191 2970011 or email wb@kiddspoorlaw.co.uk

 

A common concern for our clients and their families is the prospect of having to sell the family home in order to meet care costs,’ explains Nigel Miller, a Director in the wills and probate team with Kidd & Spoor Solicitors Limited. ‘There are many articles and schemes online which seem to indicate that selling a home can be avoided, but often these schemes are not legal and could land you in even more trouble.’

When might your local authority deem that selling your home is necessary

If you require care, either in your own home or in a care home setting, your local authority will assess your ability to fund your own care by considering all of your finances and your circumstances as a whole.

The home in which you live is considered as part of your overall financial situation if it is owned by you. There may be some instances, however, in which the value of your home is disregarded by your local authority when they are assessing your ability to pay for your care fees.

If you need to move into care permanently, it is likely that selling your home would be necessary in order to cover the costs of your care. However, you may enter into an agreement with your local authority that the costs are deferred until you choose to sell, rather than having to sell your home immediately. This might be beneficial if, for example, property prices are low and are likely to rise in the future. A solicitor can advise you as to the advantages and disadvantages of entering into such an agreement and help you decide whether it is right for you.

When selling your home might not be necessary

The rules surrounding when your home might be disregarded are complex and you should seek professional legal advice based on your specific circumstances. It may be that your home is disregarded on the basis of your personal circumstances and the care you require, where you live, who you live with, or how the property is owned.

Whilst not common, free care is available to some through NHS continuing healthcare or aftercare provisions under the Mental Health Act. Funding is only available in limited circumstances, and you would need to be formally assessed for either to be granted. You may take an independent legal representative with you to any personal assessment, and you may have a solicitor look over any documents or other paperwork that you receive in connection with the assessment. It is advisable to seek legal advice early on in the assessment process to ensure you have fair representation.

Your home is only included as an asset for the purpose of determining your ability to pay your own care fees if you own it. Therefore, if you rent your property or you have been permitted to live for free in a property owned by a member of your family, this will not be considered as part of your financial circumstances. In addition, if you own your home, this will not be considered if you continue to live in it and the care you receive is home-based.

If you live with your spouse or partner, a relative who is 60 or older, a child of yours who is under 18, or a relative who lacks mental capacity, the value of your home cannot be considered as part of your overall financial situation. If you jointly own your home with another person, your value of the shared home may still be taken into account, but this should be reduced to reflect the fact that another person has a financial interest. The rules around this are nuanced and, even if your home is disregarded this does not necessarily mean that it will continue to be disregarded forever. You should always seek legal advice based on your personal circumstances as those circumstances change.

Can you avoid selling your home altogether?

You cannot avoid selling your home by virtue of any illegal arrangement. Many people believe that they can simply give their home away to loved ones to avoid having to sell, but this will usually be deemed as a deliberate attempt to remove assets and the local authority would still calculate your ability to pay your own fees on the basis that the home continues to belong to you. This can result in even greater complications and unnecessary expense.

Careful estate planning with the guidance of a legal professional, however, can help you to structure your financial affairs in a way that is tax efficient, and which helps to ensure that your assets are as secure as possible to be able to pass on to your loved ones.

 How can we help?

Selling property is often something people only consider at the point that this becomes necessary, however, planning in advance is essential to provide the most appropriate options for you and your family. Advice should be sought early to ensure that your affairs are structured in a suitable manner.

If you have left your legal planning late, before undergoing any care fees assessment, it is a good idea to speak to a solicitor to help you understand the law, your rights, and the likely outcome. During the assessment process, a solicitor can be a valuable support to attend meetings with, or to simply review any paperwork.

If you believe your home should be disregarded from your financial assessment, a solicitor will be able to advise you based on your circumstances and help you to ensure that the local authority have considered all relevant factors. If your circumstances change at any point, you should involve a solicitor again to ensure that you are not missing out or inadvertently flouting the law.

Our solicitors can help you to ensure that you have chosen the best option available to you and that you have made a fully informed decision.

For further information, please contact Nigel Miller or Philip Walker in the wills and probate team on 0191 2970011 or email nm@kiddspoorlaw.co.uk or pw@kiddspoorlaw.co.uk

 

While financial assets can be divided relatively easily when settling an estate, this is not usually possible with heirlooms such as a painting, a piece of furniture or individual pieces of jewellery. Even if items are not valuable, such items may be the cause of a dispute between siblings who have set their heart on something because of its sentimental value.

‘In law, chattels are any items of tangible and moveable property, such as jewellery or artwork or antiques,’ explains Nigel Miller, a Director in the wills and probate team with Kidd & Spoor Solicitors.  ‘When dealing with estates, all the person’s assets are included, even personal belongings of low or no value. As such, it is important to ensure any potential issues are avoided wherever possible.’

Common issues arising with chattels

Often, because people might not realise that chattels need to be included and distributed as part of the estate, well-meaning family or executors might clear a property too promptly, getting rid of items that are meant to pass to a certain person or that should be valued to ensure the correct inheritance tax is paid.

Even if the executors clear the person’s home carefully, it could be the case that certain chattels included in the will cannot be found or have been lost or given away during the testator’s lifetime. In this case, the chattels cannot be gifted according to the will as the gift will fail due to the legal provision of ademption.

Where family members do not get along and are likely to disagree about certain items, if the will does not specify who should receive which personal belongings this can result in protracted disagreements.

Alternatively, a will could give executors too wide a discretion to pass chattels as they see fit. For example, a will might include a wish for a certain item of jewellery to pass to a particular family member, but if it is just a wish the executor will be free to sell the item instead or give it to a different beneficiary, causing the intended family member to miss out.

How testators can avoid common issues with chattels

When you are making your will, it is important to think about whether to include any specific instructions regarding chattels.

If you wish to leave a relatively small, low value item to a specific person (and your family get along well) it can be more sensible to make a separate letter of wishes. This protects against the potential complication that the item may no longer be in your possession at the time of your death.

Alternatively, if your family do not get along and are likely to argue over your personal belongings, detailing gifts in the will is a safer option. Dealing with your chattels this way may also be better if you have particular wishes about who should receive certain items, and you do not want your executors to deviate from this in any circumstances. In the case of warring families, it can also be better to appoint independent executors to ensure that arguments are kept to a minimum.

If you are leaving items by way of a letter of wishes, it is important that your executors understand that they should only deviate from your wishes with very good reason. A professionally drafted will and letter of wishes will ensure that this is clear from the wording used.

How executors and family can avoid common issues with chattels

After someone has died, before clearing any property, it is important to ensure that the valid will has been seen, read and fully understood. If in any doubt, a solicitor can help you to interpret the will to make sure you do not take any action which could adversely affect any of the beneficiaries.

If a will, or a separate letter of wishes accompanying the will, mentions any specific chattels, it is the executor’s duty to ensure that the property is thoroughly searched so that all items mentioned are found. If any items cannot be found, you should document the details of your investigations and notify the intended beneficiary as early as possible.

If the will is accompanied by a separate letter of wishes, it is important that you understand the difference between the two. Broadly speaking, a gift made in the will itself must be given to the person specified whereas a letter of wishes simply expressed a clear wish as to who certain chattels should pass to and an executor may deviate from this wish with good reason. If you are unsure, you should seek the advice from our lawyers.

While financial assets can be divided relatively easily when settling an estate, this is not usually possible with heirlooms such as a painting, a piece of furniture or individual pieces of jewellery. Even if items are not valuable, such items may be the cause of a dispute between siblings who have set their heart on something because of its sentimental value.

‘In law, chattels are any items of tangible and moveable property, such as jewellery or artwork or antiques,’ explains Nigel Miller, a Director in the wills and probate team with Kidd & Spoor Solicitors.  ‘When dealing with estates, all the person’s assets are included, even personal belongings of low or no value. As such, it is important to ensure any potential issues are avoided wherever possible.’

Common issues arising with chattels

Often, because people might not realise that chattels need to be included and distributed as part of the estate, well-meaning family or executors might clear a property too promptly, getting rid of items that are meant to pass to a certain person or that should be valued to ensure the correct inheritance tax is paid.

Even if the executors clear the person’s home carefully, it could be the case that certain chattels included in the will cannot be found or have been lost or given away during the testator’s lifetime. In this case, the chattels cannot be gifted according to the will as the gift will fail due to the legal provision of ademption.

Where family members do not get along and are likely to disagree about certain items, if the will does not specify who should receive which personal belongings this can result in protracted disagreements.

Alternatively, a will could give executors too wide a discretion to pass chattels as they see fit. For example, a will might include a wish for a certain item of jewellery to pass to a particular family member, but if it is just a wish the executor will be free to sell the item instead or give it to a different beneficiary, causing the intended family member to miss out.

How testators can avoid common issues with chattels

When you are making your will, it is important to think about whether to include any specific instructions regarding chattels.

If you wish to leave a relatively small, low value item to a specific person (and your family get along well) it can be more sensible to make a separate letter of wishes. This protects against the potential complication that the item may no longer be in your possession at the time of your death.

Alternatively, if your family do not get along and are likely to argue over your personal belongings, detailing gifts in the will is a safer option. Dealing with your chattels this way may also be better if you have particular wishes about who should receive certain items, and you do not want your executors to deviate from this in any circumstances. In the case of warring families, it can also be better to appoint independent executors to ensure that arguments are kept to a minimum.

If you are leaving items by way of a letter of wishes, it is important that your executors understand that they should only deviate from your wishes with very good reason. A professionally drafted will and letter of wishes will ensure that this is clear from the wording used.

How executors and family can avoid common issues with chattels

After someone has died, before clearing any property, it is important to ensure that the valid will has been seen, read and fully understood. If in any doubt, a solicitor can help you to interpret the will to make sure you do not take any action which could adversely affect any of the beneficiaries.

If a will, or a separate letter of wishes accompanying the will, mentions any specific chattels, it is the executor’s duty to ensure that the property is thoroughly searched so that all items mentioned are found. If any items cannot be found, you should document the details of your investigations and notify the intended beneficiary as early as possible.

If the will is accompanied by a separate letter of wishes, it is important that you understand the difference between the two. Broadly speaking, a gift made in the will itself must be given to the person specified whereas a letter of wishes simply expressed a clear wish as to who certain chattels should pass to and an executor may deviate from this wish with good reason. If you are unsure, you should seek the advice from our lawyers.

How we can we help

Chattels are an important part of any estate and require advanced legal planning in the same way as other assets.

Our solicitors can guide you through the issues when making a will or drafting a letter of wishes, and we will help you to make appropriate and legally valid provisions to ensure that your entire estate (including your chattels) passes as you wish.

For further information, please contact Nigel Miller of Philip Walker in the wills and probate team on 0191 2970011 or email nm@kiddspoorlaw.co.uk or pw@kiddspoorlaw.co.uk.