Why a Property Protection Trust could be an option for your clients

The priority for most of us when we die, is to ensure that our loved ones inherit from us, and that our assets pass safely to them, without risk of being lost. This may not always be as simple as we would wish. Assets may be ‘lost’ in a number of ways; one of which might be to pay for long-term care of a spouse/partner after our death. If the estate of the first to die is left outright to the surviving partner/spouse then the whole estate of the spouse (their own assets plus those inherited) will automatically be assessed and then potentially used for payment of any long-term care they may need. Alternatively, even where the estate is not left outright to the surviving partner/spouse or where no Will has been made but a property is owned as Joint Tenants, then it will automatically pass to the surviving owner on death and again be assessed for payment of long-term care costs. The outcome of both scenarios is that the assets of the first to die may not be available to be passed onto children or other beneficiaries. How does a Property Protection Trust work? Wills are written including a Property Protection Trust, which leaves the share of the property ‘in Trust’ for the chosen beneficiaries, usually the children. The Trust also protects the interests of the survivor, by allowing them to live in the property until death or, if required, until he/she cohabits or remarries. The rules of the trust also allow the survivor to sell the property and buy another should they so desire. Should the survivor need long-term care the local authority cannot include the share of the property held in trust in their assessment as it is owned by the trustees of the trust. On the death of the survivor the share owned by the trust is passed to the beneficiaries. If the property is own as Joint Tenants then the ownership must be changed to Tenants in Common. Owning your property in this way means that you can “gift” your share to whoever you wish in your Will. A Property Protection Trust would be created in both Wills to handle the ownership of each share of the property. Points to remember: As this is a Will Trust, nothing happens until first death so there is nothing to stop the client selling, renting, raising capital against the property or remortgaging. Another benefit of the trust is that if the survivor goes on to remarry, he/she cannot leave the whole of the property to their new spouse, as a portion is already owned by the Trustees. Where the property is a rental property rather than the principal place of residence then the “life interest” in the property equates to the right to draw the rental income rather than the right of occupancy. Where more than one property is owned it is possible to have different trusts dealing with each property. The trust is “neutral” for Inheritance Tax (IHT) meaning that it shouldn’t be used if the primary concern is inheritance tax mitigation. This means: The value of the share held in trust still forms part of the estate of the survivor for IHT calculations, even though the asset itself doesn’t If the client is unmarried then if the value of the share of the property gifted into trust exceeds the prevailing Nil Rate Band, then IHT will be payable on the gift If the client is married then, as the life tenant is the spouse, the spousal exemption still applies and the surviving spouse will still have twice the prevailing Nil Rate Band available to be claimed on their death If the survivor terminates their life interest and survives for seven years then the share of the property held in trust drops out of their estate for IHT calculations.   To find out more about PPT and other Trusts just call us on 01522 500823.

10 reasons your clients need a Will

        Having a will is arguably one of the most important things your clients can do for themselves and their families. The top ten reasons for your clients to have a will are: Your client decides how their estate will be distributed. It helps give clarity to family members and removes confusion. Your client can clearly state who will take care of their children (if minors). With no will then a court may make the decision instead, appointing either family or a state-appointed guardian. It will speed up the probate process (which happens for all estates) and clearly informs a court how your client would like their estate to be divided. With no will then the court will decide on their behalf. Minimise estate taxes. The value of what is given away could reduce the value of estate taxes that will be due. They can appoint an executor who will ensure all affairs are in order – they just need to ensure it’s someone they trust. It enables the client to clearly state who will inherit and who will not inherit from their estate. With no will, individuals could make claims to the estate against the clients wishes (such as an ex-spouse). A will allows your client to specify gifts or donations to charities or individuals. A will gives clarity and will help to avoid legal challenges of entitlement. Your client can change a will at any time to suit the circumstances in their life. It’s simple and easy to do now to avoid confusion and unhappiness later on.   Providing a will writing and estate planning service to your clients is easy with BTWC. We can work with you in a number of ways to help you meet your client needs and increase your opportunities for income growth. Just call us on 01522 500823 to see how we can help you and your clients.

Is a Family Settlement Asset Trust the Right Solution For You?

Many of you will have seen the recent article from the BBC regarding the use of Trusts for the primary reason of avoiding care fees. This relates to a particular company actively promoting a specific type of trust advertised explicitly for the avoidance of care fees. As experienced and qualified practitioners will advise,  if there is clear evidence that the primary motivation for setting up a trust is for the avoidance of care fees, this would be challenged by a local authority under the grounds of ‘deliberate deprivation of assets’ and in all likelihood be overturned. The primary goal in Estate Planning is to ensure that the solution is right for the individual client and their overall circumstances. It’s also critical to ensure that planning is in place well in advance to protect and support families’ futures. What is a Family Settlement Asset Trust (FSAT)? This is a discretionary trust usually coupled with a life interest used to protect assets which may be property, cash, bonds and so on. It is usual for the settlors to reserve the right to use the assets (for example, occupy property) or have income from them. In these cases, such a right of occupation or right to income is know as a Gift with Reservation of Benefit. Why could an FSAT as a potential option for you and your family? Over 5% of males and 7% of females are diagnosed with dementia/Alzheimer’s These illnesses prevent sufferers from taking decisions. They lose capacity. This means that they cannot make decisions, sign documents, maintain property etc. Property may fall into disrepair and the individuals wellbeing can be detrimentally impacted as a result of their living conditions. Vulnerable Adults When a spouse dies, the survivor may become vulnerable following the bereavement of their life partner. They may struggle to make decisions alone that previously they would have taken jointly. However, with an FSAT the trustees can take decisions with regard to the property, its maintenance and repairs. The survivor is not alone. The Big Spender A surviving spouse may be reckless with money and indifferent to property up keep. In extreme cases they may get into debt or even bankruptcy and the family’s assets are swallowed up by creditors. With an FSAT, the assets are ring fenced within the Trust. The 2nd Marriage The surviving spouse may be persuaded to make a new will or may not even get round to making a new will on re-marriage at all. This means assets may go to the new spouse without taking into account the interests of the previous family. But with an FSAT, the re-marriage of a surviving spouse is irrelevant, the assets are protected and sideways dis-inheritance is avoided. Care Fees If a surviving spouse ultimately goes into care, the Trustees could opt to rent out the property and utilise the rental income to top up care fees providing more control to the family regarding the standards of care their loved one will receive. The last point is a critical one. The issue is not the avoidance of care fees but the management of care fees contributions, ensuring families remain in control of assets and are able to utilise them in the future should they choose and need to. The creation of any Trust requires careful consideration and Trustees should be aware of their duties and obligations regarding the careful, but not necessarily burdensome, administration of the Trust. This type of Trust goes hand in hand with other Estate Planning solutions such as Lasting Powers of Attorney. The FSAT is designed to protect the property during the settlors lifetime. The LPA is designed to protect the individual during their lifetime. Not all Estate Planning takes effect upon death and lifetime planning can have a significant impact on the wellbeing of loved ones lives whilst they’re still with us. If you would like to know more, get in touch enquiries@btwc.co.uk 01522 500823

Illott v Mitson Court Ruling – Upholding Testators Wishes

The widely reported Illott v Mitson case this week reached a final conclusion at the Supreme Court after a 10 year battle between three animal charities and a daughter excluded from her mothers £500,000 will. Heather Illott’s mother Milita Jackson left most of her estate to charities but nothing to her daughter when she died in 2004. When Mrs Illott originally appealed against the will in 2007 she was awarded £50,000 by a district judge. The sum was increased by the Court of Appel in 2015 – £140,000 to buy her housing association property and £20,000 structured to enable her to keep her state benefits. The court ruled that Mrs Ilott would otherwise face a life of poverty because she was on benefits and could not afford to go on holiday or buy clothes for her children. The charities sought to challenge this award and in a unanimous judgement, the Supreme Court allowed their appeal in a decision handed down on 15th March 2017. As reported by the BBC, before her death in 2004, Mrs Jackson wrote in a letter to lawyers: “I can see no reason why my daughter should benefit in any way from my estate. I have made it clear to my daughter… that she can expect no inheritance from me when I die.” She explicitly instructed the executors of her will to fight any claim Mrs Ilott might make after her death. The relationship between mother and daughter worsened when aged 17 Mrs Ilott eloped with a man her mother disapproved of, but who she remains married to. There were failed reconciliation attempts which were blamed on both sides. James Aspden, the solicitor acting for the three animal charities, said the Supreme Court had upheld a “vital principle”. “It reaffirms in a unanimous sense from the highest court in the land that principle that we’re all free to choose who will benefit when we die.” This case highlights the importance of having appropriate plans in place as there may have been a different outcome where the charities’ legacy was concerned if this had not been the case. Some commentators have suggested that this result could provide greater reassurance to testators knowing that their wills are less likely to be challenged. What will certainly be of interest will be how this ruling may influence the outcome of future challenges to wills. What are your thoughts on the Illott v Mitson Case – did the Supreme Court make the correct ruling? Let us know on enquiries@btwc.co.uk

We Live Together but We’re Not Married – What Rights Do We Have?

The 2014 ONS Government Survey calculated that whilst there are 22.5 million people living as a couple and married, there are a further 5.5 million people co-habitating but not married. More and more couples are choosing to live together and the laws for unmarried, cohabiting partners are not the same as those for married couples in that they have no automatic right to their partner’s income or assets upon separation. This means, making adequate provisions for unexpected circumstances during lifetime as well as upon death become more important than ever. What is a Cohabitation Agreement? At present, the only solution for cohabiting couples seeking legal protection is to enter into a Cohabitation Agreement, also known as a “No-Nup”. It is an Agreement which sets out who owns what and in what proportion. A Cohabitation Agreement documents provisions for children, and how you will divide your property and other assets should the relationship break down. It can also be used to clarify the day-to-day management of finances. BTWC has provided many such agreements over recent years and certainly has seen an increase in demand for such arrangements. Do you own a home together? The family home is often the main and most valuable asset of a relationship. Parties can hold a property as joint tenants, tenants in common, or in one party’s sole name. If purchasing the property as joint tenants, each person takes half of the equity upon separation. If one person passes away, the survivor inherits the whole property. If purchasing the property as tenants in common, the property is held jointly but as separate shares. If one person passes away, their share will only pass according to their Will. Where ownership of family property is in the sole name of one party, it is usually a sensible precaution to enter into a written Agreement to define and secure the financial interest of the non-owner who otherwise could be entitled to nothing. Do you have children? If you have children from your current or previous relationships, making adequate plans and provisions for them is paramount. Guardians should be considered along with ensuring any children are not unintentionally disinherited by the surviving partner on remarriage should they simply ‘forget’ to make a new will to take into account their change in circumstances. Pensions Occupational pension schemes often do not recognise cohabiting partners. A pension is only paid to a surviving unmarried partner if they can prove financial dependence on the scheme member. A specific nomination may also be required by the scheme member for the other party to benefit. Cohabiting partners also have no rights over state pensions. If you need further support to plan ahead, please contact enquiries@btwc.co.uk or call 01522 500823   Source: Naim Qureshi mondaq.com

Looking Ahead to 2017 with Beneficial Trust & Will Co

After a fantastic 2016 we’re looking forward to what 2017 has in store and our continuing work with our great network of Financial Advisers and Estate Planning Consultants. We’ve seen all of our partners grow their businesses during the last year and we have a number of exciting updates and initiatives planned for 2017 including; A FREE Spring Seminar providing updates to our members regarding legislative changes, professional updates and new business developments here at BTWC HQ. New Partnership launches will be coming soon to support our advisers to extend their range of services to clients. Updates to our range of Funeral Planning products and a continuation of our generous commission rates. 2017 BTWC Training Dates are now available for the year – you can request the schedule here. Our popular ongoing regular professional updates will continue with new series’ coming up regarding the Residence Nil Rate Band, News from the Courts, Estate Administration & Probate to name a few.   Want to show your clients how they can make a Will to suit their individual requirements? BTWC offers a comprehensive and tailored support service to our new and existing Estate Planning Consultants and Professional Adviser partners, providing sound advice through every step of the client advisory process. We are fully accredited by the Society of Will Writers and Institute of Professional Willwriters and our legal team are approved by the Solicitors Regulatory Authority. Our unique 1 day Estate Planning training has been developed with professionals such as yourself in mind and you can expect to cover aspects such as; The Law of Succession Assessing Mental Capacity Will Trusts & Lifetime Trusts Lasting Powers of Attorney Funeral Planning Estate Administration & Probate These fundamentals will quip you with the desire to support your clients in getting their affairs in order in partnership with Beneficial Trust & Will Co. Our next scheduled training date is: Wednesday 22nd February To find out more about working with Beneficial Trust & Will Co email enquiries@btwc.co.uk

BTWC Christmas Office Hours

  Merry Christmas from the BTWC Team. Take a look at our Christmas Office hours and contact details during the festive period.  

Children: Protecting Your Greatest Asset

We all look forward to seeing our children grow up and blossom into adulthood but sadly this is not possible for some parents. Making provision within your Will as to how you would like your children to be bought up and by whom should the worst happen is of paramount importance. Appointing guardians within your will ensures that those you would like to take care of your loved ones are able to do so. A letter of wishes could also be kept with your will providing further guidance regarding aspects such as religion, schooling and people you would like them to be in contact with. Examples such as the following may be included; “I would like my children to be encouraged to continue with their music lessons” It’s important to note that a letter of wishes is not binding therefore you should consider choosing guardians who perhaps share your values. In relation to financial aspects, children under the age of 18 (minors) cannot receive a legacy until they reach 18 years. If a childrens trust is not included within a will, a Statutory Trust may prevail which can be restrictive such as providing a right to all income for the inheritance on attaining the age of 18 years old even if the testator had preferred the child to have the capital at a greater age. If Trustees are not specified or identifiable from the will then the courts may nominate representatives to act on the behalf of the children concerned in relation to the inheritance. When seeking to include a childrens trust in their will, you should consider; What age should the child inherit the capital? Who should look after the money for the children Should money be available for maintenance? What should happen if a child pre-deceases a parent? Should money be available to guardians?   The Trustees do not have to be the same as the guardians that you chose. You may find it preferable that the financial management be separated from the day-to-day upbringing of children. The two tasks require very different skills and may not always be found in the same person. We always recommend that you appoint a minimum of two trustees. If you would like to find out more please get in touch 01522 500823 enquiries@btwc.co.uk  

PRESS RELEASE: Raising Professional Standards in Estate Planning

We are delighted to announce that Beneficial Trust & Will Co Ltd are now fully accredited members of the Institute of Professional Willwriters (IPW) in recognition of our firm operating to the highest professional standards. The IPW was founded in 1991 as a self-regulatory body to safeguard the public from unqualified practitioners and unethical business practices and has become established as a professional body regulating and promoting the profession of will writing in England, Wales and Northern Ireland. All IPW member organisations are mandated to comply with the IPW Code of Practice which is approved by the Chartered Trading Standards Institute under it’s Consumer Codes Approval Scheme. This provides clients with further peace of mind that services are provided by a qualified and skilled team of Estate Planning practitioners carrying comprehensive professional indemnity insurance. We continue to value our Society of Will Writers accreditation and are one of the few firms within the UK operating dual membership of both leading organisations along with a legal team approved by the Solicitors Regulatory Authority. Director of Operations, Amy Peters commented “Clients can obtain Estate Planning and Will Writing services in a number of ways but compliance with a rigorous code of conduct such as that of the IPW and the Chartered Trading Standards Institute provides assurance that clients legal rights are clearly outlined and upheld. Unfortunately, we have seen less scrupulous traders attempt to enter this profession and it is our intention to be able to provide a clear route for clients to access services that are delivered to the highest professional standards. We are absolutely thrilled to have successfully completed the IPW compliance process and hope this goes to further display our commitment to the delivery of the highest customer service standards.” For more information please contact: Amy Peters, Director of Operations, BTWC Ltd 01522 500823/07818 087197 amy.peters@btwc.co.uk www.btwc.co.uk  Note to Editors Beneficial Trust & Will Co are a Lincolnshire based family run business established since 1999 specialising in Wills and Estate planning. We support a national network of Estate Planning Consultants and Financial Advisors to deliver a wealth of legal services solutions. We also provide free consultations and support to clients within the Lincolnshire area. Nationally, we are preferred estate planning services provider to the Royal Air Forces Association and are proud local supporters of Age UK Lincoln & Kesteven.

9 Reasons Why Not to Make a Will or Plan Your Own Funeral

Whilst making a Will is a fundamental part of planning for our futures, sometimes taking a humorous view supports clients to understand the consequences of not taking any action. One of our fantastic consultants came up with the below to help raise a smile about the reasons people give to not make a will. 1. I hate my children and want them to never speak to each other again after the battle over my estate   2. I hate my spouse/partner and want him or her to suffer the agony of attempting to probate my estate without a will   3. I think foster care is great and I want my minor children placed there whilst a court decides which greedy relative will get custody   4. I’m not sure about my funeral arrangements to I’ll let my family surprise me   5. My family doesn’t need the money so I want the government to take as much of my estate for taxes as possible   6. I’m happy to expect my family to pay my funeral, after all that’s what they’re here for   7. I’m happy for my hard earned money to be spent on paying for long term care costs   8. I don’t mind if my family have to take a loan out to pay for my funeral as long as I get a good send off   9. I have reliable information that I am never ever going to die   Want to show your clients why they SHOULD make a Will? BTWC offers full training and support on all aspects of Estate Planning. Contact us today and take the next step. Enquiries@btwc.co.uk 01522 500823