Lasting Powers of Attorney refund by the OPG

Lasing Powers of Attorney refund scheme A refund scheme for those who have been overcharged for their power of attorney registration has been launched by the Ministry of Justice. The charge for LPA registration is only supposed to cover the cost of the service, but clients were over-charged up to April 2017, when the Office of Public Guardian cut their fee to £82. So for those that registered a Lasting Power of Attorney (LPA) between September 2013 and April 2017 then they can enquire about making a claim. Processes for a LPA become more efficient and the costs came down for the Office of the Public Guardian, but the fee to customers was not reduced down by the Ministry of Justice until April 1st 2017. There is now a refund scheme in place for any of your clients who may have been affected. It has been confirmed that the number of people who may have paid more than they needed to is approximately 1.7 million. Who can claim? A claim can be made if the LPA was made in England or Wales during the timescales above. A client may apply for a claim if they are either the ‘donor’ – the person who made the LPA, or if they are the ‘attorney’ who was appointed by the donor. But to bear in mind the refund must be paid back to the donor, and there can only be one claim per donor. The maximum refund, if the original fee was paid between April 2017 and September 2013, is £54 per power of attorney registered. Amy Peters, Head of Operations at BTWC comments “This is a very positive move by the Ministry of Justice. Clients will be refunded accordingly, but only if they apply online through the government website. Whilst this affects thousands of people it must be remembered that the registration for a LPA is now at the appropriate price and people are no longer affected. An LPA is still an important element for a lot of people when planning their future.” If you are acting for any clients who think they may be affected, then they can visit www.gov.uk/power-of-attorney-refund for more details and to make a claim directly. A Lasting Power of Attorney (LPA) is a legal document that lets your client (the ‘donor’) appoint people (known as ‘attorneys’) to make decisions on their behalf should they become unable to do this on their own. BTWC are not able to assist in making claims for the refund, but if you or your clients have any queries regarding setting up an LPA just contact the team who will be happy to help – 01522 500823.

Residence Nil Rate Band – what you need to know…..

Still unclear on what the Residence Nil Rate Band is about? Here’s what you need to know…..           What is the Residence Nil Rate Band (RNRB)? The RNRB is an additional allowance for inheritance tax. It applies in addition to the existing IHT Nil Rate Band (NRB), which is expected to be frozen at £325,000 until 2021. It’s intended to reduce further any IHT impacts for those with a family home that they wish to pass to their children. There will be a tapered withdrawal of the additional nil-rate band for estates with a net value of more than £2 million. This will be at a withdrawal rate of £1 for every £2 over this threshold. Implementation phased over 4 years The Residence nil rate band (RNRB) came into effect on 6th April last year, and will continue to be phased in until tax year 2020/21. It will be phased as follows: The current allowance for the 2017/18 tax year is £100,000 In 2018/19 the allowance increases to £125,000 This rises to £150,000 in 2019/20 It completes in 2020/21 at an allowance of £175,000   Who does it apply to? It is relevant for specifically for families and each parent who owns a property, or a share of a property, that they have lived in and which is left direct to lineal descendants such as children or grandchildren, step-children, adopted children and foster children. If the client owns more than one property then they can select which property to have the allowance against but must be able to prove they have resided there at a point in time. Transfer between spouses and partners As with the NRB, any unused percentage of the RNRB on the first death can be transferred to the estate of the surviving spouse or civil partner for use on their own death, regardless of when the first death occurred. Just to note if the first death was prior to the RNRB implementation on 6th April 2017 this transfer may still be applicable. It’s important to remember that, as with the NRB, executors must be able to demonstrate what happened to the first persons RNRB, usually via the Will and subsequent estate administration after the first death. Downsizing considerations In regards to RNRB downsizing can refer to moving to smaller properties, but also moving to a cheaper property, or even giving up ownership completely. But clients can still claim their RNRB allowance, but an adjustment will be made based on the value of the property that was sold and the new one. This is known as the ‘downsizing addition’. This element can take a more complex route depending on a number of circumstances and our Professional Executor Services would be strongly recommended if this is likely to be relevant. Many clients are still unaware of the RNRB, or know very little about how it can potentially benefit their families in the future. When looking at the future of their assets and Estate this is an important aspect for consideration and something that clients will no doubt need advice on.   Contact BTWC about how our Estate Planning and IHT services can help you ensure your client makes secure decisions for the future – call 01522 500823.  

New Funeral Plan Range

            BTWC launch new Funeral Plan range Estate Planning services professionals, Beneficial Trust & Will Company (BTWC), are very pleased to be launching their new funeral plan range in partnership with Silver Clouds Funeral Planning. The new range covers a multitude of client requirements and some of the plans can be tailored to suit more unique needs. Competitively priced to help clients implement an affordable solution for the future, the plans range from meeting basic requirements through to comprehensive needs. BTWC support their adviser members by providing a range of Will Writing and Estate Planning products and are pleased to be able to offer trusted and affordable Funeral Plans for advisers to offer their clients. Amy Peters, Operational Director at BTWC comments “As Estate Planning specialists, creating our own BTWC Funeral Plan with a trusted partner such as Silver Clouds means that advisers and their clients can rely on us for a comprehensive service offering everything they need in one place. Our Pre-Paid Funeral Plan options are reflective of our ethos of providing trusted, flexible products for advisers, supported by a strong professional service team who can help with any enquiry. This new range reflects our commitment to providing the right products in our offering.” The range provides flexible payment terms, no restrictions on health, age or medical history and also includes a ‘transfer’ option, meaning a plan can be applied to any family member, including children and grandparents. The team at BTWC will provide support to advisers at any stage of the process to help provide their clients with the best solution for their needs. Silver Clouds Director John Graham, says “We are delighted to be working with BTWC in the provision of funeral plans to their clients.  BTWC are a well-established estate planning group with national coverage.  Together we have formulated a bespoke funeral plan proposition entirely white labelled to the BTWC brand which is both affordable and innovative whilst also being secure and compliant.  The feedback we have received so far has been encouraging and we expect sales to be strong.” You can see more details on the new Plans here. To find out more about BTWC’s Funeral Plans and other Estate Planning services just call  01522 500823 or email enquiries@btwc.co.uk.

8 factors to consider for GDPR

        As an IFA, broker or Estate Planner you may not have really considered General Data Protection Regulation (GDPR) so far (implemented on 25th May 2018). But it’s important to have an awareness of what’s involved so you can make changes if you need to do so. Here are 8 considerations of GDPR, many of these may already be in place and it could be that you simply need to tweak a few areas to strengthen them further: 1. Internal engagement Is everyone in your business appropriately aware of GDPR and committed to making the appropriate changes to ensure compliance? 2. Personal data What personal data do you hold as a business? Where does it come from? How is this data shared internally and with other third parties? Consider plotting out where your data comes from and how you ask for permission to use that data – are there any risks you need to address? 3. Recording of data How do you record the data? How do you update and amend it when required? Do you have the ability to fully delete the data across all records if requested to do so? Clean out any old data you don’t use, there’s no point in keeping it anyway. 4. Data security/breaches How secure is the personal data you have within your business? Is it stored in documents or within a system? Who accesses this data? Are there any restrictions in place? If you have a breach how quickly can you detect this, and report it? You may need to assess and identify any possible risk elements within your data processes and security. The reputational risk to your business could be huge! 5. Consent It’s important that customers have the choice upfront to consent to communications from you. You need to make them aware of how you intend to use their information. Consent cannot be inferred from inactivity or pre-ticked boxes, and you must make it easy for people to withdraw consent. You need to implement this consistently and be able to record customer choices. 6. Individuals rights Does your business allow for all the rights that individuals have? How would you delete personal data, or provide relevant data in an easy to use format? 7. Access requests Customers have the right to access the information you have on them, and you cannot charge for this service. You can however refuse a request if it is ‘manifestly unfounded or excessive’. You must inform the individual why you have refused within one month. All of this must be recorded and processed within the business for future auditing purposes. 8. Data Protection Officers You may need to consider appointing a DPO if you deal in large volumes of personal data, conduct regular and systematic reviewing of data on a large scale or if you are a public authority. You need to ensure you have someone who takes on the responsibility for your data protection compliance with the appropriate knowledge support and authority to support your business effectively. If you are not sure about your compliance in regards to GDPR it could be worth seeking expert legal advice.

Is a Family Settlement Trust an option for your clients?

        This best practice is adhered to by many professionals in the industry, but it is becoming more common for a local authority to challenge a trust on the grounds of ‘deliberate deprivation of assets’ and succeed in getting them overturned. That’s why it’s crucial a trust is set-up with the right intention and the clients is fully clear of their commitments and the impact on surrounding relatives. The primary goal in Estate Planning is to ensure that the solution is right for the individual client and their overall circumstances and planning well in advance to protect and support families is a critical aspect of this. What is a Family Settlement Asset Trust (FSAT)? This is a discretionary trust usually coupled with a life interest used to protect assets such as property, cash, bonds and so on. It is usual for the client (settlor) to reserve the right to use the assets in the trust (to continue to occupy property for example) or have income from them. In these cases, such a right of occupation or right to income is known as a Gift with Reservation of Benefit. When is a FSAT an option? Declining mental capacity  Over 5% of males and 7% of females are diagnosed with dementia/Alzheimer’s. Such illnesses often prevent sufferers from taking decisions due to their incapacity to do so. This means that they cannot make decisions, sign documents, maintain property etc. Property may then 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. 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. This 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 advanced preplanning is crucial to ensuring assets pass to the people of the clients choice, most have worked hard over many years and made regular national insurance contributions to ensure they are looked after later in life, so why should they effectively be taxed again! 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. For more details on the right Trust for your clients just contact BTWC on 01522 789473  

Cohabitation and inheritance rights

        Whilst there is an increase in the number of people who decide to co-habit together, the understanding of what happens to property and assets if one partner dies is still misunderstood. If you have a client who lives with their partner and they have decided they don’t wish to get married or enter into a civil partnership, then the assumption that everything will pass to them is incorrect. If no Will is in place making provision for each partner then there is no automatic right against the estate. If you have a client who is in the position whereby their partner owns most of the assets outright, if that partner were to die then the deceased’s estate would either pass under the terms of their Will, or if they don’t have a Will, the estate will likely pass to their next of kin under the Intestacy Rules. If your client and their partner have joint-ownership over their assets if no Will is made, under the laws of intestacy for unmarried couples, your client would be entitled to their half, but the other half would be shared equally between the deceased’s children (if there are any), so missing the surviving partner. Where there are no children, the estate would be split in the following order: surviving parents, the deceased’s siblings (or their children if the sibling has died), grandparents, aunts/uncles (or their children if they’ve died). This could mean your client may have to share their home with a family member. In the absence of any family members, the deceased’s estate would all pass to the Crown. Therefore making an updated Will to benefit each partner is vital to ensure that further down the line, each is protected and treated as wished, particularly in regards to their property and financial matters. If either partner has made a Will prior to the relationship forming, then it is just as important to get the Will reviewed and updated in order to guarantee the future allocation of assets Trevor Cross, MD, BTWC says, “Making a Will or updating their Will is the only secure way your client can ensure that their wishes for their partner regarding the distribution of property and assets is upheld and legal. As their adviser you have the opportunity to discuss their options with them, and outline the reality of the situation and guide them on the appropriate steps, all of which we can support you with.” For more information just contact us on 01522 500 823 or email us at enquiries@btwc.co.uk

Lasting Power of Attorney – The role of the Attorney

If you are providing a Lasting Power of Attorney (LPA) service to a client (who will be the Donor), then it’s important they and whomever they choose as Attorney(s) fully understand the role. The role of an Attorney could vary greatly and it’s essential that before agreeing, all aspects are carefully considered. It may be that the services of the Attorney are never required as the Donor never has that need, but in the event they do then the Attorney must understand what they are committing to. Being an Attorney is a legal agreement that must be registered with the Office of the Public Guardian (OPG) and be validated. An LPA may appoint two Attorneys, in which case they will need to work together on some decisions, as required in the LPA. Being an Attorney may require difficult decisions to be made for healthcare issues (should the donor be moved into residential care) or financial issues (dealing with taxes and payments on the donors behalf) and although some expense can be claimed, it is an unpaid role. If the chosen Attorney does not feel equipped to do the role or they may not have the capacity (in the event they are needed) then they should state so as soon as possible, as later on things can get complicated if the Donor no longer has the ability to mentally deal with changing Attorneys. As an Attorney, legal responsibilities include: Acting in the donor’s best interests and taking reasonable care when making decisions on their behalf. Acting in accordance with the terms of the LPA (see below). Helping the donor to make their own decisions where possible, rather than simply taking control. More detailed information about Lasting Power of Attorney responsibilities is available in the Mental Capacity Act Code of Practice. The Attorney will be required to sign a statement confirming they understand their legal responsibilities.   The Power of an Attorney does not allow for: Unlimited authority to make decisions on behalf of the donor The changing of the Donor’s Will Ill-treatment or neglect of the Donor To incur losses for the Donor due to poor ability to perform duties   If an Attorney is appointed under a Property and Financial Affairs LPA they cannot make decisions about Health and Welfare and vice versa for a Health and Welfare LPA. There could be further restrictions or wishes placed in an LPA by the Donor and these need to be taken into consideration before any decision is made. The Attorney can take advice o n a decision, such as a Financial Adviser or a medical expert, but decisions cannot be deferred to someone else. If need be the Court of Protection can become involved in the decision-making if the matter becomes complex. Triggering an LPA A Property and Financial Affairs LPA can be triggered whilst the Donor has mental capacity if stated within the LPA, for example if the Donor leaves the country for a long period of time and requires someone to act on their behalf in their absence. But for a Health and Mental LPA then only when the Donor no longer has mental capacity can an Attorney start making decisions. The Mental Capacity Act Code of Practice is a useful resource to point people in the direction of if required. BTWC provide support, training and full guidance on LPAs – just contact us now for more information 01522 500823

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