Navigating Inheritance for Blended Families

Key Considerations

Blended families are becoming increasingly common, presenting unique estate planning challenges, especially when children from previous relationships are involved. If you’ve remarried or entered a new partnership, careful planning is crucial to ensure that your assets pass fairly and smoothly to all your loved ones. According to the 2021 ONS census, 1.1 million UK children live in stepfamilies, highlighting the importance of expert legal advice and clear communication to respect your wishes and provide for everyone.

Common Challenges

Balancing the needs of family members and avoiding conflicts is a key challenge. Common issues include:

Unequal Inheritances: Fair distribution among biological children, stepchildren, and a new spouse can be a complex issue.

Ex-Spouse Claims: Former spouses may have financial claims; therefore, seeking legal advice is advisable. 

Conflicting Priorities: A surviving spouse’s ideas on asset use might conflict with the interests of children from previous relationships.

Intestacy Laws: Dying without a Will triggers intestacy rules, which often don’t suit blended families. While surviving spouses or civil partners have rights under the Inheritance (Provision for Family and Dependants) Act 1975, stepchildren typically don’t inherit unless they are adopted or financially dependent. 

Updating or Making Your Will

To protect your loved ones, update your Will regularly. Remarrying or entering a civil partnership automatically revokes your existing Will, potentially leaving assets to unintended beneficiaries. Without a valid Will, cohabiting partners have no automatic inheritance rights, regardless of their living arrangements or whether they have children. Review, update, or create a Will to clearly specify your beneficiaries. 

Tailoring Your Will

Although there’s no single solution for blended families, various strategies can help ensure fair asset division.

Simple Cash Division: If your estate exceeds the family home’s value, you might divide the remaining assets between your surviving spouse and children from a previous marriage. Alternatively, leave the house to your spouse and other assets to your children, allowing your spouse to keep the property.

Life Interest Trusts: This trust allows your spouse to reside in the family home and benefit from income generated by other trust assets after your death. They cannot sell or transfer the property, and children inherit the capital when your spouse passes away. The main concern is that children might have to wait many years for their inheritance.

Discretionary Trusts: This flexible approach allows trustees to decide when and how to distribute income or capital, adapting to changing circumstances. For example, they might withhold assets from a remarried spouse or fund a child’s education. Beneficiaries may not receive equal shares, but the aim is a fair distribution. It’s essential to select trustees carefully and include a letter of wishes.

Owning Your Home as Tenants in Common

Holding property as tenants in common (not joint tenancy) can benefit blended families. Unlike joint tenancy, which automatically passes the property to your spouse (‘sideways inheritance’), tenants in common allow you to specify your shares and designate beneficiaries, such as children from previous relationships. A lawyer can help you change your ownership arrangement. 

Tax Implications

Consider the tax effects of asset division. An English-domiciled surviving spouse is an exempt beneficiary for Inheritance Tax (IHT). However, children are not. If children receive more than the £325,000 tax-free allowance plus the £175,000 residence nil rate band, 40% IHT may be payable on the excess. While tax should not be the only consideration, its impact can be significant. Appointing impartial executors and trustees, possibly a professional solicitor, helps to manage the estate and trusts fairly, especially when conflicts may arise. 

Our Advice

Blended families require careful and thorough estate planning. By updating your Will, honestly discussing your plans with your family, and seeking expert advice, you can ensure your wishes are honoured and your loved ones are looked after. Please contact us if you need further information or advice about making a Will or estate planning in general. We are here to help.

Gifting Your Home?

Understand the Tax Traps

Parents often consider gifting their home to their children during their lifetime. They hope to manage their estate and reduce future tax bills. However, this seemingly generous act involves complex tax implications, especially for Inheritance Tax (IHT) and Capital Gains Tax (CGT). Understanding these nuances is crucial to avoid unforeseen financial burdens for everyone involved.

The Inheritance Tax Minefield

When parents gift their home but continue to live in it, they often fall under the “Gift with Reservation of Benefit” (GROB) rule. The GROB rule is a key anti-avoidance measure from HMRC.

What is a GROB?

If you gift an asset but still benefit from it, HMRC treats the gift as if it never truly happened for IHT purposes. For a family home, this means that the property’s full value will still be considered part of the parents’ estate upon their death. This calculation applies regardless of how long ago the gift occurred, completely negating any IHT planning.

Can you avoid it?

One potential option for children to avoid the GROB rule while their parent continues living in the home is to pay a full market rent to their parents.  This rent must be genuine, commercially realistic, regularly reviewed, and adequately documented. The significant downside is that the children, as new owners, will be liable for income tax on this rental income. They also assume landlord responsibilities, such as gas safety checks and other maintenance tasks.

The Seven-Year Rule (for other gifts)

For gifts not subject to GROB rules (genuine outright gifts where the giver gives up all benefit), the “Potentially Exempt Transfer” (PET) rule applies. If the giver survives for seven years after making the PET, the gift becomes entirely IHT-exempt. If they die within seven years, the gift may become taxable. A tapering reduction in the tax rate applies if death occurs between three and seven years after an individual makes the gift. Importantly, the seven-year rule does not apply if GROB rules are engaged.

Capital Gains Tax

While parents might aim to avoid IHT, their children could face a significant CGT bill when they eventually sell the property. This scenario is especially true if the home was not the children’s principal private residence.

Principal Private Residence (PPR) Relief

Usually, selling your only or main home means any gain is exempt from CGT under Principal Private Residence (PPR) Relief. However, when parents gift their home to children, and the children do not live there as their primary residence, this relief typically doesn’t apply to the children’s later sale.

The Problem

For CGT purposes, the “gain” is the difference between the property’s market value when gifted to the children and its eventual sale price. If the property’s value significantly increases over the years the parent lives there (which is not uncommon), this gain can be substantial. Consequently, the children, as legal owners, become liable for CGT on this profit.

The ‘Trust’ Exception for PPR Relief

There is a less common but vital exception for PPR relief, especially when a property is gifted but a parent continues to live there: holding the property in a trust.

In certain circumstances, if a trust holds a property, and a beneficiary (such as a parent) has the right to occupy it as their primary residence under the trust’s terms, the trustees can claim PPR relief when they sell the property. This arrangement differs crucially from outright personal ownership. Key points to note include:

1. Types of Trusts

PPR relief applies to certain trusts. These trusts include “express trusts” (deliberately created, usually in writing, with clear intentions) or even “implied trusts” (which arise through legal principles, for example, based on financial contributions or shared intentions, even without formal documents).

2. Time Limit

Importantly, for PPR relief to apply in a trust context, the trustees must submit a claim to HMRC within four years of the end of the tax year when they sold the property. Failing to claim within four years from the end of the tax year of the sale typically means HMRC will reject it, regardless of the claim’s underlying validity.

Furthermore, trustees must actively claim PPR relief. This situation differs from individual owners, who often receive PPR relief automatically.

3. Evidencing the Trust

It’s vital to be able to prove a trust’s existence, especially an implied one. Possible evidence includes letters or the original solicitor’s paperwork from the transfer of the gift, which would show the parents’ continued right to occupy.

Other Important Considerations

Gifting your home is a significant decision with broader implications than just IHT and CGT. Consider these points:

1. Loss of Ownership

Once gifted, parents no longer own the property. They lose control over it. The property could also be at risk if the children face financial difficulties, divorce, or if family relationships deteriorate.

2. Care Home Fees

Local authorities can (and do) challenge gifts explicitly made to avoid care home fees under “deprivation of assets” rules.

3. Stamp Duty Land Tax

An outright gift with no money changing hands generally doesn’t trigger Stamp Duty Land Tax (SDLT). However, if children take over an outstanding mortgage or make a financial contribution, SDLT may be applicable. 

Our Advice

The complexities of gifting property to children highlight the absolute need for specialist legal and tax advice before any transfer happens. Relying on assumptions or incomplete information can lead to significant, unexpected tax liabilities and legal issues. A qualified legal professional and tax advisor can assess your specific situation, explain the intricate rules, and help structure the transaction in the most tax-efficient and legally sound way.

If you need advice or further information about gifting or other estate planning matters, such as wills or trusts, please don’t hesitate to contact us. We’re here to help.

Navigating A Remortgage

When to Bring in Legal Expertise

Remortgaging your home can be a smart financial move, potentially securing a better interest rate, releasing equity, or changing your mortgage terms. However, as you explore your options, a question we are often asked is: Do you need to engage a lawyer for this process?

The short answer is that it depends on your circumstances; however, in most cases, a lawyer is indeed essential. You will almost certainly need a legal professional if you are:

Switching Lenders

This is the most common scenario. When you transfer your mortgage from one bank or building society to another, the new lender requires legal checks to ensure that your property provides sufficient security for their loan. Your lawyer will oversee the transfer of the legal charge on your property.

Changing Property Ownership (Transfer of Equity)

If you’re adding or removing someone from the mortgage and the property deeds (e.g., due to marriage, divorce, or a new partner), it is essential to consult a lawyer to amend the legal ownership.

Releasing Equity

Suppose your remortgage involves borrowing a larger sum against the value of your property. In that case, legal processes are necessary to ensure that the new loan is secured and complies with relevant regulations.

Dealing with Leasehold Properties

Leasehold properties entail further complexities regarding ground rent, service charges, and lease terms. All of these necessitate a solicitor’s expertise.

Complexities or Uncertainties

Any issues with the property title, boundary disputes, or unusual circumstances surrounding your property will necessitate the advice of a lawyer.

When You Might Not Need a Lawyer

There are a couple of situations where you might not need a legal professional:

Product Transfer with Your Current Lender

If you’re simply staying with your existing lender but switching to a new mortgage rate or deal (e.g., moving from a fixed rate to another fixed rate with the same provider), this is often just an administrative adjustment. Your lender usually handles this internally, and it typically doesn’t involve new legal work.

Borrowing More from Your Current Lender (Further Advance)

If you are borrowing additional funds against your current mortgage agreement with the same lender, without altering the fundamental terms or ownership, legal work may not be required.

Even in these “no lawyer needed” scenarios, it can still be beneficial to consult one. They can offer valuable expertise, review the terms, and ensure your interests remain protected.

The Remortgage Process

Once you have established you need legal advice for your remortgage, the process begins with anti-money laundering checks to verify your identity. Next, your lawyer will contact your existing lender to obtain your current mortgage details and a redemption statement. This confirms the outstanding balance and any early repayment charges that may apply. For leasehold properties, your lawyer will carefully examine the lease terms to ensure they comply with the new lender’s requirements.

Once your new lender issues a formal mortgage offer (after valuation), the next stage is to review the terms and conditions. Some new lenders may request property searches to identify any potential issues. These are similar to those conducted when you first purchased the property. In some cases, a quicker search indemnity policy can be implemented instead.

Your lawyer then prepares the new mortgage deed for your signature and conducts bankruptcy searches to satisfy the new lender’s requirements. On the completion day, mortgage funds are requested from your new lender and used to pay off your old mortgage. Finally, your lawyer will register the new mortgage with the Land Registry, updating the legal title for your home.

Timescales

A standard remortgage can take between four and eight weeks from the time you apply. However, this can vary depending on several factors:

• Some lenders are quicker than others.

• If the property is leasehold, or there are issues with the title, or complicated ownership structures, these can prolong the process.

• Being proactive or responding quickly by providing documents and information to the legal team and lender can positively impact the timeline.

• Using a reputable mortgage broker can expedite the process by helping you find the right deal and manage the application.

If your current fixed-term mortgage is nearing its end, it’s a good idea to start the remortgage process about 12 weeks before it expires. This will help you avoid your lender automatically switching you to their potentially higher Standard Variable Rate (SVR).

Our Advice

Some straightforward product transfers may not require legal assistance. However, enlisting the services of a legal professional is generally a wise move for most remortgages. If you need support or advice regarding the remortgaging process, please don’t hesitate to contact us. We’re here to help.

Don’t Let Your LPAs Gather Dust

Why Regular Reviews are Crucial

You’ve made a responsible decision. You’ve planned for the future by creating a Lasting Power of Attorney (LPA) – or perhaps an Enduring Power of Attorney (EPA) if it was set up before October 2007. These vital legal documents allow you to appoint trusted individuals (your Attorneys) to make decisions on your behalf should you ever lose the mental capacity to do so. Importantly, this applies to both a Property and Financial Affairs LPA/EPA and a Health and Welfare LPA.

But once they’re signed and registered, is that the end of it? Not quite. Just like a Will, LPAs aren’t something you set aside and forget. Regular reviews are essential to ensure they remain effective, truly reflect your wishes, and provide the best possible protection.

Why is an LPA Review So Important?

Several key factors can impact the ongoing suitability of your LPA(s):

Legal Landscape

The law isn’t static. Over time, legal guidance and best practices surrounding LPAs have evolved. A review ensures your document(s) align with current requirements and provide the best possible protection.

Personal Circumstances

Life happens. Your financial circumstances may change, you may acquire new assets, or your relationships with family and friends may alter. What was appropriate when you created your LPAs may no longer be the case. For example, you might have different preferences regarding how your property and financial affairs are managed, or who should make decisions about your health and welfare.

Changes Affecting Your Attorneys

The individuals you selected as your Attorneys are central to your LPA. It is essential to consider their circumstances as well:

• Do your chosen Attorneys still have the mental capacity to make important decisions on your behalf?
• Are they still willing and able to take on the responsibility?
• Has your relationship with them changed in a way that might make them less suitable?
• Sadly, an Attorney may pass away. If your LPA doesn’t account for this, it could lead to complications.
• If an Attorney moves abroad, it might become impractical for them to act effectively.

Trust & Relationship Changes

Relationships can, unfortunately, break down. If your trust in an Attorney has diminished, it’s vital to address this to protect your interests.

Maintaining Flexibility and Adaptability

Your LPA must be sufficiently robust to handle unforeseen circumstances. A review enables you to ensure it remains flexible and adaptable to various situations that may arise.

Protection from Fraud

While LPAs are intended to protect you, reviewing them ensures they remain as secure as possible and reduces potential vulnerabilities to fraud, particularly if an Attorney’s circumstances have changed.

Protection for Your Loved Ones

An outdated or ineffective LPA can cause considerable stress and tough decisions for your family if they must step in without clear guidance. Regular reviews help to ease this process.

Peace of Mind

Ultimately, ensuring your LPA is current, legally valid, and accurately reflects your true wishes offers invaluable peace of mind for you and your family. 

What Happens During an LPA Review?

A review does not necessarily entail drafting completely new documents. It presents an opportunity to:

1. Confirm that your selected Attorneys remain the most suitable individuals.
2. Ensure that your instructions and preferences remain relevant for both your Property and Financial Affairs and your Health and Welfare.
3. Ensure the LPA(s) remain both legally sound and effective.
4. Discuss any changes in your personal or financial circumstances that could affect their operation.
5. Consider any new wishes you might have concerning your future care or financial management.

Our Advice

Think of your LPAs as living documents. Your Lasting Power of Attorney(s) are powerful instruments. They safeguard you and your future. By taking the time to review them periodically, you ensure they continue to fulfil their intended purpose, providing peace of mind for both you and your loved ones.

If you have existing LPA(s) or an EPA and would like to discuss their suitability, or if you are considering establishing one, please do not hesitate to contact our specialist team. We’re here to help.

Practicalities of Keeping Your Conveyancing Moving

Moving home is often cited as one of life’s most stressful events, and a significant part of that stress can arise from the conveyancing process. While your lawyer plays a crucial role in navigating the legal complexities, there are practical steps you, as the client, can take to help ensure things keep moving forward.

Everyone wants their move to be as seamless as possible. Proactive communication and a collaborative approach are central to a successful and smooth transaction. Here, we examine some sensible and actionable steps that may be helpful.

ONE: Be Prepared from the Outset

One of the most common causes of delay is a lack of readily available information. Taking the time to gather essential documents early can genuinely make a significant difference.

It’s helpful to locate essential documents such as deeds, guarantees for any work carried out on the property (e.g. damp proofing, new windows, or boiler installations), FENSA certificates, and any planning permissions or building control certificates. Additionally, consider your property’s history. Have you had any disputes with neighbours? Are there any informal agreements regarding boundaries or access?

Being open and honest about these details prevents surprises later. If you’re purchasing with a mortgage, having an agreement in principle in place before making an offer shows your readiness and can accelerate the initial stages.

TWO: Communicate Clearly and Promptly

Effective communication underpins a seamless transaction. Although your lawyer will keep you informed, your timely responses are equally important.

Responding promptly to queries is always appreciated. Your legal team will likely send you forms and request information, so completing and returning them as soon as possible is key. If you’re unsure about anything, ask for clarification instead of delaying your response. It’s also crucial to keep your lawyer informed if your circumstances change – for instance, your contact details, financial situation, or if there are updates regarding your mortgage. Notify them immediately.

While it’s natural to feel eager, refrain from unnecessary chasing; excessive contact can sometimes distract the legal team from the task at hand. Trust that they are progressing your case and will reach out when they have an update or need something from you.

THREE: Understand the Process (Without Becoming an Expert)

Having a fundamental understanding of the conveyancing stages can help you appreciate why certain steps take time and when your input is needed.

Your lawyer should provide you with an overview of the conveyancing process; familiarising yourself with the timeline can help manage your expectations. It’s also wise to be patient regarding searches. Local authority, environmental, and water authority searches are a critical part of the process, but their turnaround times are often beyond your lawyer’s direct control.

FOUR: Be Realistic and Flexible

Conveyancing, by its nature, involves multiple parties and can sometimes encounter unforeseen hurdles. Therefore, it’s sensible to expect the unexpected. While we strive for efficiency, issues can arise, such as problems with survey results, chain collapses, or legal queries from the other side. A flexible mindset can help navigate these bumps. Additionally, consider chain length; generally, the longer the property chain, the more complex and potentially slower the transaction. Being aware of this can help you set realistic expectations.

Our Advice

Whether you’re buying or selling a property, being proactive and communicating effectively is essential. Clear and open communication ensures that all parties involved are on the same page, resulting in a smoother and more efficient conveyancing experience.

If you have any questions about the conveyancing process or would like a fixed price quotation from us, please don’t hesitate to contact us. We’re here to help.

Understanding Loss of Capacity Without an LPA

When a loved one’s mental capacity declines, it’s incredibly tough. If they haven’t set up a Lasting Power of Attorney (LPA), the next step often involves the Court of Protection. We frequently discuss this with our clients, so here’s a clear look at the Court’s role and what deputies are responsible for in these sensitive situations.

The Court of Protection

The Court of Protection is a specialist court in England and Wales. It’s dedicated to safeguarding the interests of individuals who struggle to make their own decisions due to mental capacity challenges. This includes overseeing their finances and making choices about their health and living conditions.

The Court plays a vital role. It ensures vulnerable individuals receive necessary support and protection from potential exploitation. Ultimately, the Court aims to empower individuals to live fulfilling lives while upholding their rights and welfare.

Its responsibilities include:

1. Assessing Mental Capacity: The Court first confirms whether an individual genuinely lacks the capacity to make their own decisions. The law presumes they have capacity unless proven otherwise.

2. Making Specific Decisions: The Court can issue orders for immediate, one-off issues where no LPA exists. This might involve approving the sale of a property to cover care costs or consenting to specific medical treatment.

3. Appointing Deputies: This is a primary role of the Court when there’s no LPA. A deputy is appointed if ongoing decisions regarding finances, property, or welfare matters are needed.

4. Overseeing and Supervising: The Court supervises deputies to ensure they always act in the best interests of the individual they represent.

What Are Deputies?

The Court of Protection appoints deputies to make ongoing decisions for individuals who lack mental capacity. Typically, deputies are family members or close friends. However, if no appropriate family member is available or the financial circumstances are intricate, the Court may appoint a professional deputy.

There are two main types of deputies:

1. Property and Financial Affairs: This deputy manages the individual’s money, pays bills, oversees bank accounts, handles investments, and manages property. This is the most common type of deputyship.

2. Personal Welfare: This deputy makes decisions regarding the individual’s healthcare and living arrangements. The Court tends to be more cautious when appointing these deputies. This caution arises because many of these decisions are usually made by medical professionals and family members in accordance with the Mental Capacity Act.

A Deputy’s Important Responsibilities

Being a deputy carries significant responsibility with serious legal duties. All deputies must follow the rules outlined in the Mental Capacity Act 2005.

Deputies must:

1. Act in the Person’s Best Interests: This is the most crucial rule. Every decision a deputy makes must prioritise the best interests of the individual they represent. This involves considering their previous wishes, feelings, beliefs, and values, importantly in conjunction with members and professionals.

2. Encourage Participation: Deputies should promote the person’s involvement in decisions as much as possible, even if their capacity is limited.

3. Keep Good Records: Deputies must keep precise records of all decisions and expenses. These details are included in the annual report submitted to the Office of the Public Guardian (OPG).

4. Keep Finances Separate: A financial deputy must always ensure that the individual’s money and assets are kept entirely distinct from their own.

5. Obtain a Security Bond: Most financial deputies must secure a security bond. This type of insurance protects the person’s assets from any financial errors made by the deputy.

6. Provide Annual Reports: Deputies must submit a yearly report to the OPG, outlining their actions and the individual’s financial situation. The OPG oversees deputies to ensure they fulfil their responsibilities correctly.

Using Professional Deputies

While family members often assume the role of deputy, a professional deputy can sometimes be a more suitable choice. This may be due to the following reasons:

1. The person’s finances are very complicated (for example, they’ve received a large sum from a personal injury claim).
2. There’s no suitable family member available or willing to be a deputy.
3. Family disagreements could make managing affairs difficult.

Furthermore, professional deputies, often solicitors, offer an impartial, knowledgeable, and experienced approach. They are regulated and held to high standards, ensuring decisions are always made purely in the individual’s best interests, without personal bias.

Our Advice

Dealing with a loved one losing capacity is challenging, especially without a Lasting Power of Attorney (LPA). Our firm offers compassionate legal guidance to families. Our specialist lawyers can help you explore your options, whether applying to become a deputy, assisting with deputy duties, or advising on the Court of Protection’s role in safeguarding your loved one.

Please contact us if you are concerned about a loved one’s capacity or lack of an LPA. We’re here to help.

Beyond The Show Home

Essential Tips for Buying a New-Build Property

Purchasing a new-build home presents a world of exciting possibilities, from selecting your ideal decor to being the very first occupant and enjoying the peace of mind that comes with fewer immediate repair concerns and lower maintenance costs. However, navigating the new-build market does pose some unique considerations for the buyer.

Buying Off-Plan or In-Construction

The allure of buying a new build off-plan can be significant. Seeing your chosen plot evolve from outline site plans to reality is exciting. Yet, it’s crucial to remember that plot location, finish, and even size variations can occur.

Only when the developer has completed the property, or it is at an advanced stage of construction, can you see these features on site. You can ascertain what furniture will fit, whether the outdoor space meets your expectations, and so forth. Thus, remember, when purchasing off-plan, to thoroughly review the property’s specifications and ensure they align with your current and future needs. For instance, are you planning to expand your family, or are you nearing retirement and the property may seem too spacious in a few years?

Additionally, consider envisioning the surrounding facilities and the overall mix of properties within the development. It is crucial to research the developer online. Independent reviews are an excellent starting point, and be sure to examine the Home Builders Federation New Homes survey results. Finally, request a realistic completion date for the entire development from the developers. If construction persists for an extended period after you move in, be prepared for the realities of living on an active building site.

Conveying a Newly Built Property

New-build properties frequently involve extra considerations, such as ensuring compliance with building regulations, verifying construction quality, reviewing warranty terms, and examining agreements with the builder or developer.

Completion dates can be more unpredictable because construction timelines frequently encounter delays. This affects the scheduling of the conveyancing process, necessitating careful negotiation and planning to coordinate the property’s legal and practical completion.

New-build properties frequently incur extra fees, like infrastructure charges and amenity contributions, all of which need careful consideration during conveyancing.

Overall, new build conveyancing requires a more comprehensive examination of legal documents, stringent compliance checks, and heightened awareness of issues specific to newly constructed properties. This results in a more intricate and nuanced process than conveyancing for an existing home.

Decoding Your Buyer’s Contract

You must dedicate ample time to read and thoroughly understand your buyer’s contract. This document may contain crucial clauses that could affect your financial obligations and restrict future alterations to your property or its grounds. Ensure you check the following:

1. Shared Facility Charges

You may need to contribute a service charge towards the upkeep of shared facilities, such as communal gardens or private roads. The developer must disclose these charges, and your legal documents should clearly outline them. Ensure you are fully aware of these potential additional costs, as you will need to factor them into your ongoing budget.

2. Type of Tenure

The tenure of your new home is a vital consideration. If your property is leasehold, you will likely be responsible for ground rent and a service charge. Leasehold status also generally means you will need consent from the landlord or management company before making significant alterations or subletting your home. Again, ensure you have thoroughly budgeted for these ongoing costs of ownership.

3. Drains, Sewers, and Roads

For new builds, the developer usually constructs the infrastructure serving the property, including roads, drains, and sewers. After a specified period, the Local Highways Authority and Water Authority should “adopt” responsibility for maintaining new roads or sewers, unless the contract stipulates otherwise.

An experienced lawyer plays a crucial role in ensuring that the necessary agreements are in place for this adoption and that they allocate funds to cover the cost of works should the developer cease trading. Without appropriate contracts, you, as the buyer, may be liable for maintenance costs until adoption. If the contract explicitly states that these services will remain private, you must be fully aware of the potential cost implications and liabilities involved.

Choosing the Right Ownership Structure

If you are purchasing your new build home with a partner or spouse, it’s essential to communicate this to your solicitor. They can then advise on the most suitable ownership structure: joint tenants or tenants in common. The documentation submitted to the Land Registry to register your ownership will reflect this choice.

1. Joint Tenant

Often chosen by married couples or cohabiting couples, this structure means both parties own the property in equal shares. Upon the death of one owner, their share automatically passes to the surviving owner(s), regardless of any Will provisions.

2. Tenants in Common

This option allows for unequal shares of ownership, which can be important if contributions to the purchase price vary. Importantly, with tenants in common, you can bequeath your share of the property to beneficiaries under your Will. 

Our Advice

Purchasing a new property is often the ideal (and exciting) choice. While the process can be complex, if you engage the support of an experienced legal professional, they will assist you in resolving any issues, meeting your lender’s requirements, and keeping your purchase on track. Please contact us if you’re looking for legal advice on your new-build purchase. We’re here to help.

The Case of Liam Payne and the Perils of Intestacy

Who Decides Your Legacy?

The recent and untimely death of Liam Payne serves as a powerful reminder of how fragile life can be and just how important it is to have a Will in place. Despite his enormous success and public fame, Liam sadly passed away without a valid Will, leaving an estate valued at over £ 24.3m. While close family, friends and fans mourn his loss, this tragedy also highlights something many people, regardless of fame or fortune, often overlook: the necessity of having a Will.

It’s easy to think that Will writing is only for the wealthy with sprawling estates. However, the truth is that having a valid Will is one of the most important things you can do to protect your loved ones, no matter the size of your assets. Dying without one, known legally as dying intestate, can create significant complications, stress, and even financial hardship for those left behind during an already challenging time.

Understanding Intestacy Rules: A Rigid Framework

In the UK, the intestacy rules determine how assets are shared when someone dies without a Will. In Liam’s case, the intestacy rules determined that his son would be the primary beneficiary. However, not having a Will likely created confusion (and great responsibility) for those close to him and those he might have wanted to provide for. Take his partner, Kate Cassidy. As an unmarried partner, the intestacy rules provide her with no automatic inheritance, regardless of the duration or depth of their relationship or any future plans. This situation could leave her vulnerable and starkly illustrates how the law often fails to reflect the complexities of modern relationships and individual wishes.

The Confusion and Challenges for Those Left Behind

The absence of a Will inevitably creates confusion and significant challenges, particularly for those who aren’t automatically recognised under the intestacy rules, such as unmarried partners. Unlike spouses or civil partners, they don’t have a legal right to inherit. Instead, because the intestacy rules don’t automatically provide for unmarried partners, they face the complex task of proving their eligibility to claim under the Inheritance (Provision for Family and Dependants) Act 1975 (the Inheritance Act).

This process can involve tricky legal discussions and sharing sensitive personal information, all while they are trying to cope with their loss. Navigating this process can prove costly and time-consuming, adding significant stress during an already heartbreaking period.

Furthermore, legal fees can drain their resources, leaving them financially vulnerable despite their close relationship with the deceased. The emotional strain of dealing with legal matters while grieving can be overwhelming; it forces them to fight for recognition and security at a time when they feel most vulnerable. And unfortunately, there’s no certainty about how an Inheritance Act claim will turn out, which can lead to even more heartache.

The Administrative Chaos

The absence of a Will creates further chaos for everyone trying to handle the estate. In Liam’s case, papers from the Court of Protection revealed his former partner and mother of his son Bear, Cheryl Tweedy and music industry lawyer Richard Mark Bray have been given a limited grant of representation until a general grant is made. Undoubtedly, this complicates and makes the management of the estate more time-consuming. Dealing with an intestate estate often results in higher legal costs due to the additional administrative work involved. Additionally, no clear guidelines exist about personal matters like funeral arrangements, specific gifts for loved ones, or charitable donations. This lack of clarity can lead to disagreements among family and friends already dealing with grief.

Why a Will Matters for Everyone

It’s clear to see from Liam Payne’s untimely death why drafting a Will is crucial for everyone, regardless of their net worth:

• Control Over Your Legacy: A Will allows you to explicitly state who you wish to inherit your assets, avoiding the rigid framework of intestacy and the uncertainty of potential claims.
• Protection for Unmarried Partners: A Will is the only way to ensure an unmarried partner is financially provided for, as they have no automatic rights under intestacy.
• Addressing Potential Dependencies: A Will allows you to make provisions for individuals who may be financially dependent on you, regardless of their legal relationship.
• Guardianship of Children: A Will remains the definitive way to appoint guardians for minor children.
• Streamlining the Legal Process: A valid Will generally leads to a smoother and less costly probate process compared to the complexities of intestacy and potential Inheritance Act claims.
• Mitigating Inheritance Tax: A well-structured Will can incorporate strategies to minimise or even reduce the amount of Inheritance Tax payable on your estate, ultimately preserving more of your wealth for your beneficiaries. Dying intestate means this opportunity for proactive tax planning is lost. 

Our Advice

Liam Payne’s death is a tragedy. But his situation is not uncommon. Other notable celebrities who died without a Will include Prince, Jimi Hendrix, Amy Winehouse, Pablo Picasso, and James Dean. Unfortunately, they left more than just their fame behind. Aside from their wealth, they provoked bitter family arguments, avoidable taxes, and numerous costly lawsuits.

Making a Will is rarely a task people are keen to sort out. Confronting family issues, thinking about the inevitable or worrying about the cost make the process seem unappealing. However, a properly drawn-up Will provides security and peace of mind for everyone you care about. You will be relieved knowing your affairs are in order and you have appointed someone you trust as your executor.

Please contact us for further information, advice from our specialist team, or an idea of the costs involved in making a Will. We’re here to help.

Generation Skip. Can Will Variations Help?

Losing a loved one is a profoundly emotional experience. As you navigate the practicalities that follow, you might be surprised to learn that even after someone makes a Will, there’s a mechanism that allows its terms to be altered. This is a Deed of Variation, and beneficiaries can use it as a powerful tool to redirect their inheritance for various reasons, including tax planning and facilitating generational skipping.

For many, the initial distribution outlined in a Will might not be the most suitable outcome for those who survive. Perhaps circumstances have changed significantly since someone drafted the Will, or a legacy may benefit future generations sooner and more significantly. Whatever the reason, a Deed of Variation offers a legitimate and effective way to reshape an inheritance within a specific timeframe.

What is a Deed of Variation?

In essence, a Deed of Variation is a legally binding document that allows beneficiaries of a Will (or those entitled under the rules of intestacy if no Will exists) to change who inherits what from the deceased’s estate. It essentially rewrites the Will in part, as if the deceased had made those changes themselves before passing away.

The Golden Window: Two Years Post-Death

Crucially, you must execute a Deed of Variation within two years of death. This time limit is critical for its legal validity and potential tax benefits.

Why Draft a Deed of Variation?

A Deed of Variation offers beneficiaries valuable opportunities to reshape the distribution of an estate. For parents, it provides a route to pass on their inheritance directly to their children in a tax-efficient manner, treating the gift as if it were originally theirs and potentially shielding it from inheritance tax on the parent’s death. Beyond direct gifts, it allows for the creation of trusts, granting greater control and flexibility in how someone manages assets for future generations.

Beneficiaries can also leverage a Deed of Variation to support causes they care about by redirecting assets to charity, which can simultaneously reduce the inheritance tax that the estate pays.

Furthermore, this legal instrument can be a powerful tool for resolving family issues arising from a Will. If the Will has unintentionally left someone out, existing beneficiaries can use a Deed of Variation to include them, offering a way to avoid costly and emotionally draining legal battles.

Important Considerations

While a Deed of Variation offers significant flexibility, it’s essential to be aware of the following:

1. The terms are legally binding once you execute the deed, and you can’t easily reverse them.
2. While people often use variations for tax planning, it’s crucial to understand all the potential tax implications of a variation, including Income and Capital Gains taxes. Expert legal and financial advice is essential.
3. A Deed of Variation is a complex legal document that someone must draft correctly and execute properly to be valid.
4. It may not be possible to vary a Will or intestacy rules due to the circumstances of the parties, this may be due to age, disability, benefits, bankruptcy, etc
5. It is important to check whose consent is required for a variation.

Our Advice

Navigating the complexities of will variations and their implications can be challenging. Everyone’s circumstances are different. However, please contact us if you need further information or advice about an inheritance or making a Will. We are here to help.

Achieving a Stress-Free Property Move

Buying or selling a house is a thrilling prospect, but let’s be honest, it can also feel a little daunting. Navigating the legalities and potential pitfalls can add unnecessary stress to what should be an exciting time. The good news is, whether you’re taking your first step onto the property ladder or moving onto a new chapter, there are proactive steps you can take to ensure a smoother, more stress-free move.

Tips for a Smooth Transaction

Buyers 

• Get Your Finances in Order: Secure a mortgage pre-approval before browsing properties. This shows sellers you’re serious and financially ready.
• Do Your Homework: research local market values using platforms like Rightmove and Zoopla to avoid overpaying.
• Assemble Your Dream Team: Work with a proactive estate agent and experienced property lawyer to safeguard your interests. 

Sellers 

• Be Prepared: Gather essential documents, such as title deeds and surveys, to speed up the buyer’s due diligence and prevent delays.
• Price it right: Collaborate with your estate agent to set a realistic asking price to attract buyers.
• Honesty is Key: Disclose known property defects or potential issues to avoid disputes and build trust with potential buyers. 

Navigating Offers and Negotiations

Buyers 

• Make a clear offer detailing the purchase price and conditions.
• Negotiate for a fair price while aiming for a mutually agreeable outcome.
• Arrange for thorough property inspections and legal checks.

Sellers

• Review all offers, prioritising buyers with strong financial backing.
• Communicate your decision clearly, whether accepting or countering offers. 

Closing the Deal

Before finalising the sale, your property lawyer will review all legal documentation to protect your interests and identify potential issues.

Budget for the costs involved in buying or selling a property. These include mortgage or loan fees, valuation and surveyor’s fees, property tax (like Stamp Duty Land Tax), estate agent fees, removal costs, and legal fees. Request transparent cost breakdowns from all professionals involved.

Key Points to Remember for a Stress-Free Move

1. Communicate clearly with all parties.
2. Pay attention to detail when reviewing documents.
3. Take the time to understand all legal documents before signing.

Our Advice

Engaging a specialist property lawyer is essential in the UK’s complex property market. Their expertise can save time, money, and stress. By seeking professional guidance and following these steps, you can confidently navigate the property market and look forward to a smooth transition into your new home.

Please contact us if you would like to talk to one of our property team members or receive a quote for your conveyancing. We’re here to help.

Refusing an Inheritance

Understanding Disclaimers

The recent court case, White v Williams [2025] EWHC 115 (Ch), has highlighted a common problem in dealing with Wills: what happens when someone doesn’t want their inheritance? This case, involving the estate of the late Elfed Williams, highlights the potential for ambiguity and dispute when informal communications are relied upon to establish a beneficiary’s intention to renounce their entitlement.

White v Williams [2025] EWHC 115 (Ch)

A Son’s Unclear Intentions

Elfed Williams passed away on June 11, 2023, leaving behind an estate that became the subject of contention. David Leslie White, acting as the sole executor, found himself in a predicament regarding the distribution of the estate. The core issue stemmed from alleged informal disclaimers by Keith Elfed Williams, the deceased’s only son.

The executor, Mr. White, initiated a Part 8 claim in the High Court, seeking directions on how to proceed with the estate’s distribution. The root of the problem was that Keith Williams, estranged from his father, had engaged in various informal communications that suggested he wished to disclaim his inheritance. However, these communications lacked the formality typically required for a valid legal disclaimer, which led to the legal ambiguity that the courts were asked to resolve.

What is a Disclaimer?

In legal terms, a disclaimer is when someone officially refuses a gift they’ve been left in a Will. Someone can refuse a gift left in a Will, but they must do so before accepting any part. However, it must be clear, definite, and done within a reasonable time. If done correctly, it’s as if the person died before the testator (the person whose Will it is), which changes the estate’s distribution.

It’s important to know that simply saying “I’m not sure” or “maybe not” isn’t enough. It must be a clear “no.” Also, you can’t change your mind after taking something from the inheritance. That’s why acting quickly is crucial.

Why the Executor Sought Direction from the Court

Elfed’s Will included a clause (known as a substitution clause) that allowed the executor to redistribute any ‘failed’ gifts. This is a common practice in Will drafting. A gift usually fails if the named beneficiary dies before the person whose Will it is. However, in this case, the issue centred on whether Keith’s refusal to accept his father’s gift amounted to the failure of that gift.

Ruling

The court held that the natural and ordinary meaning of the word “fails” in the Will’s substitution clause extended to Keith’s (informal) disclaimer, even though it occurred before Keith’s death.

Our Advice

This case serves as a reminder that clarity and formality are crucial when creating Wills. Disputes – big or small – come at a high cost. Emotionally and financially. The legal fees incurred during this case reduced the final distribution to the beneficiaries. In the end, avoiding legal challenges through precise documentation and professional guidance helps ensure that the intended beneficiaries receive the maximum benefit from the estate. So, please don’t hesitate to contact us if you need legal advice regarding Wills or estate planning. We’re here to help.

Unpacking the Government’s Commonhold Revolution

What the White Paper Means for You

The Government’s recently released white paper outlining significant reforms to commonhold ownership signalled its intention to move forward with legislation as quickly as possible. The reforms aim to empower leaseholders and provide a viable alternative to the often-problematic leasehold system. This move sparked considerable discussion within the property sector. Since there are few commonhold developments, the structure generally confuses many purchasers and lenders. Here, we outline the key proposals, explain potential pros and cons and what the proposals are likely to mean in practice.

What is Commonhold?

For those unfamiliar with the term, commonhold is a form of freehold ownership in which individuals own their flats and share ownership of the building’s communal areas. This differs from the more common leasehold structure, where a leaseholder effectively rents the property for a fixed term. This structure eliminates the concept of a landlord and lease, instead transferring control to the residents through a Commonhold Association.

Key Proposals of the Government’s White Paper

The white paper will form the basis of a draft leasehold reform bill expected later this year. The proposed changes are designed to make commonhold a more attractive and accessible option. They include:

1. Revitalising Commonhold: The reforms aim to make it easier for developers to create commonhold properties and for existing leaseholders to convert to commonhold.

2. Improving the Existing Commonhold Model: Proposals include simplifying the current legal framework and addressing issues that have hindered its uptake in the past.

3. Empowering Commonhold Associations: The proposals seek to strengthen the role of Commonhold Associations and ensure they are well-equipped to manage their buildings effectively.

4. Addressing Existing Leasehold Issues: While the focus is on promoting commonhold, the white paper also discusses leasehold reforms, such as capping ground rents and simplifying lease extensions.

Advantages of Commonhold

The Government believes the new proposals will make commonhold the default tenure for new flats, providing homeowners with greater control and autonomy over their properties. While also ensuring robust property maintenance plans and mandatory reserve funds. With Commonhold Associations operating openly, it’s believed that the new structure will promote transparency and fairness, allowing all owners to participate in decision-making. Furthermore, commonhold properties will likely increase in value due to rising desirability. Finally, a commonhold structure eliminates the burden of ground rent payments, resulting in significant financial savings.

Disadvantages and Potential Challenges

The white paper highlights the complexity of the current commonhold model. It also notes the need for unanimous consent, often leading to lengthy and costly processes. As a result, unless the process is modified, developers may hesitate to adopt commonhold, citing perceived complexities and financial risks. Furthermore, the potential for owner disputes necessitates robust dispute resolution mechanisms, the details of which are currently unclear. Finally, lenders will need to adapt their lending policies to accommodate the expansion of the commonhold market.

Our Advice

The white paper marks a significant step toward reforming the UK’s property ownership landscape. However, the successful implementation of these reforms relies on the Government’s ability to address the significant potential challenges effectively.

The first draft of The Leasehold and Commonhold Reform Bill is due towards the end of 2025. Based on what has appeared in this month’s white paper, it remains to be seen whether developers, lenders and consumers will be firmly convinced commonhold is the way forward. Please contact us if you need further information or advice about any property-related matter. We’re here to help.

The Unforeseen Reality of Intestacy

Dying Without a Will

We often hear about the importance of having a Will, but what happens when life takes an unexpected turn and there isn’t one? It’s a scenario far more common than many realise. Here, the law steps in, but its framework—known as the rules of intestacy—can lead to outcomes that might surprise you.

The absence of a Will can significantly complicate the estate administration process and transform a period of mourning into a period of complex legal administration for the deceased’s family. In England and Wales, the Administration of Estates Act 1925, updated by the Inheritance and Trustees’ Powers Act 2014, dictates how the estate is divided. While these rules aim for fairness, they operate within a set structure that doesn’t always reflect the nuanced realities of modern families.

Modern Families, Complex Rules and Rising Disputes

Think of blended families, for instance. Remarriage and stepchildren introduce complexities that the straightforward intestacy rules struggle to address. Without a Will, children from previous relationships might find themselves unintentionally excluded, leading to painful disputes. It’s not just about spouses and children. Financial dependents who rely on the deceased may also find themselves in a precarious position, needing to invoke the Inheritance (Provision for Family and Dependants) Act 1975. In Scotland, ‘prior rights’ for surviving spouses or partners add another layer of intricacy.

Critically, the rise in these complex familial situations, coupled with the sheer number of individuals dying intestate, is a significant contributing factor to the increasing prevalence of inheritance disputes in the UK. The rigidity of the intestacy rules, designed for simpler family structures, often fails to accommodate the nuanced relationships of today, creating fertile ground for disagreements and legal challenges.

Probate Without a Plan

Now, consider the practicalities of administering an estate without a Will. The process, known as probate, becomes far more involved. Identifying and locating beneficiaries can become a detective-like pursuit, especially in families with distant relatives or complex histories. The estate administrator, typically a close family member, must secure a Grant of Letters of Administration, a legal document essential for managing the estate. This is not a simple form-filling exercise; it often requires meticulous attention to detail and a thorough understanding of legal procedures.

Dealing with Missing Beneficiaries

One of the most challenging aspects is the potential for missing beneficiaries. After the estate has been distributed, imagine discovering that a long-lost relative has a legitimate claim. This is where specialist ‘Missing Beneficiary’ insurance becomes invaluable, offering protection against unforeseen financial liabilities. If insurance isn’t an option, the administrator may need to seek court approval for distribution or pay the court any amounts due to a missing beneficiary. This process is both time-consuming and costly.

A Second Chance? Redistributing Assets Through a Notional Will

While the intestacy rules provide a default framework for estate distribution, there’s a provision that allows beneficiaries to alter the outcome. Within two years of the deceased’s death, those entitled to inherit can execute a Deed of Variation. This is a legal instrument that effectively redirects the inheritance. This process, sometimes called a ‘notional Will,’ offers a valuable opportunity to accommodate changing family circumstances.

The key to a successful Deed of Variation lies in unanimous agreement. All beneficiaries who stand to inherit under the intestacy rules must consent to the proposed changes. This requirement underscores the importance of open communication and a shared understanding of the family’s wishes. Legal guidance is crucial to ensure the Deed of Variation is drafted correctly and complies with all relevant legal and tax implications.

Our Advice

Ultimately, the best way to safeguard your wishes and protect your loved ones is to create a well-crafted Will. A Will is not just about distributing assets; it’s about providing clarity and peace of mind. It minimises the risk of family disputes, reduces stress during a difficult time, and ensures your assets are distributed according to your intentions. If you’re considering your estate planning options, don’t hesitate to contact our specialist team. We understand these matters can be sensitive and complex, and we are here to help.

The Alarming Rise of Property Fraud

Is Your Home at Risk?

The dream of homeownership is a cornerstone of British life. But what if that dream turned into a nightmare, not through leaky pipes or noisy neighbours, but through the insidious and devastating crime of property fraud? Sadly, this is a growing reality in the UK. So, homeowners need to be aware of the risks. Taking proactive steps can help protect your most valuable asset.

The Silent Thief

Property fraud involves criminals attempting to transfer ownership illegally. It often occurs through identity theft, where fraudsters impersonate homeowners and use stolen information to forge documents. They might also create fake title deeds or target empty properties, assuming a lack of quick detection. Another tactic involves mortgage fraud. Criminals take out fraudulent mortgages on the property and leave the homeowner with the debt.

Why the Rise?

Several factors drive the increase in property fraud. Criminals are becoming more sophisticated, leveraging technology and exploiting vulnerabilities. The digitisation of the Land Registry, while intended to streamline processes, also creates new opportunities for digital fraud. Economic pressures can also lead to desperate measures, driving individuals to commit such crimes.

The Devastating Consequences

Property fraud can have a catastrophic impact on individuals. Homeowners may lose their property entirely, facing the nightmare of a fraudulent transfer. Financial ruin can follow, with substantial debts and legal fees incurred while attempting to reclaim their assets. Such crimes cause immense and long-lasting emotional distress. Between 2009 and 2023, HM Land Registry prevented more than £340 million of property fraud. This clearly demonstrates the significant financial scale of these criminal attempts.

Practical Steps to Protecting Your Property

Here’s how to safeguard your property:

1. Register with HM Land Registry’s Property Alert Service to receive email alerts on property activity. There are currently more than 770,000 active property alert accounts across England and Wales, which shows growing awareness.
2. Keep Your Contact Details Up to Date: Ensure Land Registry can reach you.
3. Regularly Check Your Credit Report: Monitor for unusual financial activity.
4. Be Vigilant About Your Mail: Don’t let mail accumulate; watch for suspicious items.
5. Secure Your Identity: Protect personal information.
6. Consider a Restriction on Your Property Title: Add a layer of security.
7. Insure against fraud: Explore relevant home insurance options.
8. Seek Legal Advice: Get expert guidance from a property lawyer.

What to Do If You Suspect Fraud

If you suspect you’re a victim, immediately contact HM Land Registry to report the suspected fraud. Report the crime to Action Fraud, the UK’s national reporting centre. Seek legal advice from a solicitor specialising in property fraud to protect your rights and pursue recovery.

Our Advice

Your peace of mind is our priority. Our experienced property specialists provide expert advice and guidance on preventing and addressing property fraud. As a frontline safeguard in property transactions, we conduct robust anti-money laundering checks, verifying client identities and scrutinising transaction details to provide essential protection. Contact us today for a confidential consultation. We’re here to help.

Switching from Joint Tenants to Tenants in Common

Usually, couples who buy a house together do so as joint tenants. This means they both own the whole property, and ownership automatically transfers to the survivor when one dies.

However, circumstances may lead couples to consider changing ownership to ‘tenants in common’. And how you hold a property can have significant legal and financial implications. So, if you’re contemplating this change, it’s essential to understand the key differences between these ownership structures and the steps involved.

Understanding the Basics: Joint Tenants vs. Tenants in Common

Joint tenancy, commonly preferred by couples, means that all joint tenants hold the entire property equally. A crucial feature of this arrangement is the “right of survivorship.” This means that if one joint tenant passes away, their share automatically transfers to the surviving joint tenant(s), regardless of any will. As a result, you cannot leave your share of the property to someone else through your will.

In contrast, tenants in common allows each tenant to hold a distinct share of the property, which does not have to be equal among owners. There is no right of survivorship, enabling each tenant to designate how their share is distributed according to their will. This arrangement is often preferred by unmarried couples, friends, or family members who may have contributed different amounts to the property purchase or wish to pass on their share to specific beneficiaries.

Reasons to Switch to Tenants in Common

There are several compelling reasons to consider changing from joint tenancy to tenants in common.

1. Proportional Ownership: If you contributed a larger portion of the purchase price, you can reflect this contribution by holding a more significant percentage as a tenant in common.

2. Estate Planning: You may wish to leave your share of the property to someone other than the co-owner(s), such as children from a previous relationship.

3. Flexibility for Inheritance Tax Planning: This structure can offer enhanced options for managing inheritance tax.

4. Relationship Changes: In cases of separation, you may prefer a clear division of assets, which can be easily achieved through tenants in common.

5. Business Assets: Properties that serve as business assets are often held as tenants in common.

Severing a Joint Tenancy

To change from joint tenancy to tenants in common, you must “sever” the joint tenancy. There are several ways to sever a joint tenancy, including:

• Written Notice: Serve a written notice to the other joint tenant(s) indicating your intention to sever the tenancy. Ensure that you serve the notice properly and keep evidence of service.

• Mutual Agreement: The most straightforward method of severing the tenancy is for all joint tenants to agree in writing to do so.

• Specific Actions: Certain actions, such as selling or mortgaging your share, may also automatically sever the tenancy.

• Court Order: A court order may be necessary if disputes arise.

After severance, it’s crucial to register the change with the Land Registry to update the property’s title. This involves completing the SEV form and providing the relevant supporting documentation.

What if Someone Disagrees?

Even if one joint tenant disagrees, they have the legal right to sever the joint tenancy by giving all joint tenants a written notice clearly stating their intention. As documentation, retain proof of service, such as a recorded delivery receipt. You will also need to notify the Land Registry of the change in ownership.

Our Advice

While severing a joint tenancy yourself is possible, we strongly recommend seeking professional legal advice. Both ownership arrangements have risks and benefits, which a qualified lawyer will ensure you understand before making any decisions. If you are considering severing your joint tenancy, contact us today. We’re here to help.

Tying the Knot and Tying Up Loose Ends

Inheritance Tax and Your Spouse or Civil Partner

For many couples, marriage or civil partnership celebrates love and commitment. However, beyond this emotional bond, we often overlook vital legal and financial implications, especially inheritance tax (IHT). Understanding these implications is essential for ensuring your assets pass to loved ones as you wish and for easing potential financial burdens during difficult times.

Clients often remain unaware of the significant IHT benefits available to married couples and civil partners. Let’s explore why “I do” truly matters.

Valuable Spousal Exemption

The “spousal exemption” lies at the heart of IHT advantages for married couples and civil partners. Here’s how it helps:

1. No IHT on Transfers: When one partner dies, any assets left to the surviving spouse or civil partner are generally exempt from IHT, regardless of value.

2. Transferable Nil Rate Band (NRB): If you don’t fully use your NRB (currently £325,000) when you die, you can transfer the unused portion to your surviving spouse or civil partner. This effectively doubles their NRB to £650,000.

3. Residence Nil Rate Band (RNRB): If you own your home and plan to leave it to direct descendants, you may qualify for the RNRB. You can also transfer this allowance to your surviving spouse or civil partner, potentially adding another £175,000, doubling to £350,000 if unused. 

Why This Matters

Unmarried partners face a 40% IHT on assets exceeding the individual NRB without the spousal exemption and transferable allowances. This profoundly impacts loved ones. As consumer advocate Martin Lewis stated, “Death is where marriage really counts.” His words highlight the financial security marriage or civil partnership provides.

Examples in Practice

Consider “Alex” and “Beth,” who have lived together for 20 years and have combined assets of £950,000. If Alex dies, their situation unfolds as follows:

Married or in a Civil Partnership

Because of the spousal exemption, Beth inherits Alex’s share of assets without immediate IHT liability. When Beth dies, her estate benefits from Alex’s unused NRB, allowing a combined £650,000 to pass tax-free. If they leave their home to direct descendants, they can combine their RNRBs for an additional £350,000. With thoughtful planning, they pass £1,000,000 without IHT.

Co-habiting or Unmarried

As a cohabitee, if Alex’s assets are £475,000, his estate faces IHT:

£475,000 – £325,000 (NRB) = £150,000.

£150,000 x 40% (IHT rate) = £60,000.

Beth receives £60,000 less than if they were married. She cannot access Alex’s unused NRB, so only her own NRB applies when she dies. This results in a £60,000 tax on the first death, avoidable through marriage, and potential further tax when Beth dies.

As Alex and Beth’s example illustrates, the financial consequences of being unmarried can be significant, highlighting the need to consider whether the current inheritance tax framework is out of step with modern relationships. Many couples choose not to marry, yet they are significantly disadvantaged regarding inheritance tax. This raises questions about the fairness of a system that prioritises marital status. As societal norms evolve, whether the law will adapt to reflect modern partnerships remains to be seen.

Our Advice

Navigating the world of inheritance tax can feel overwhelming, especially during emotionally charged times. While the spousal exemption offers significant financial protection for married couples and civil partners, proactive estate planning can significantly mitigate potential burdens for cohabitees.

Crafting a comprehensive Will is essential for everyone. However, alongside exploring a cohabitation agreement, a professionally drafted Will can solidify financial rights for couples who choose not to marry. Furthermore, utilising trusts offers a strategic approach to asset management, potentially reducing tax liabilities. Lifetime gifts (mindful of the seven-year rule) can further diminish estate value. Life insurance policies written in trust provide a financial safety net for surviving partners, and carefully considering joint property ownership is also vital.

Careful estate planning (including regular reviews) is crucial for everyone, regardless of marital status. Don’t leave your family’s future to chance. Please contact us if you have any questions about making a Will, IHT or any other aspect of estate planning. We’re here to help.

Choose Your Executors Wisely

An Executor’s Responsibility is Not to be Taken Lightly

Planning for the future is never easy, but it’s crucial to ensure your wishes are respected and your loved ones are protected. A key part of this planning involves appointing executors in your Will. Executors are responsible for administering your estate after you’re gone, which requires careful consideration. Choosing the right individuals is vital. Here, we explore some crucial aspects, including the implications of an executor losing mental capacity and the importance of appointing alternate executors.

The Role of an Executor

Executors manage your estate after your death. They are responsible for identifying and valuing your assets, from property and bank accounts to investments and personal possessions. They also pay any outstanding debts and ensure all taxes are paid. Finally, they distribute your assets to the beneficiaries you’ve named in your Will. This often involves dealing with legal matters, such as probate applications, potentially handling family arguments, and working with solicitors and other professionals.

Why Choosing Carefully Matters

The role of an executor is complex and time-consuming. It requires a high degree of organisation, financial acumen, and impartiality. Choosing someone unsuitable can lead to delays, disputes, and even financial mismanagement. You need someone you trust implicitly, who is capable and willing to take on the responsibility.

The Risk of an Executor Losing Capacity or Passing Away

Life is unpredictable. What happens if an executor you’ve appointed loses mental capacity due to illness or injury or passes away before or during the administration of your estate?  Either situation can create significant complications.

Loss of Capacity: If an executor loses capacity before the court grants probate, they can no longer legally act. The remaining executor(s) can continue. If there are no other executors, your family may need to apply to the Court of Protection to appoint someone to act as an administrator. This can be a lengthy and costly process. The same is true if an executor loses capacity after the court grants probate – the remaining executor(s) can continue, but otherwise, an application to the Court of Protection may be required. If an executor loses capacity before you die, you should choose another executor and amend your Will as soon as possible.

Passing Away:  If an executor dies, similar issues arise. Before probate, the remaining executor(s) can continue.  If there are no remaining executors, an application for letters of administration (essentially taking on the role of an administrator) is required. After probate, the remaining executor(s) continue.  Again, if no other executors remain, an application for letters of administration may be necessary.  If an executor passes away before you die, you should choose another executor and amend your Will as soon as possible.

The Importance of Alternate Executors

This is where the crucial role of alternate executors comes in. Appointing alternate executors in your Will is essential. You nominate individuals to step in if your primary executor(s) are unable or unwilling to act for any reason, including loss of capacity, death, illness, or simply a change of mind. Having alternate executors in place provides a safety net and helps ensure a smooth administration of your estate.

Choosing the Right People

Trustworthiness is paramount when choosing your executors and alternates. You need someone you absolutely trust to act in your best interests and the interests of your beneficiaries. Consider their capacity – are they mentally and physically capable of handling the responsibilities? Have you discussed the role with them? Being an executor is a significant commitment, and they must be willing to take it on. Can they act impartially, especially if there are complex family dynamics? While not always essential, having executors located relatively nearby can be helpful for practical reasons.

Review Your Will Regularly

It’s vital to review your Will regularly, especially if there are significant changes in your life, such as births, deaths, marriages, or financial circumstances. You should revisit your choice of executors and alternates during this review to ensure they are still appropriate and willing to act.

Our Advice

Drafting a Will and choosing executors are complex legal matters. We advise you to talk to an experienced lawyer specialising in Wills and probate. They can guide you through the process, ensuring your Will is legally sound, and your wishes are properly documented. Don’t gamble with these crucial decisions; make a plan.

For more information, please contact us today. We’re here to help.

 

Why You Need Lasting Powers of Attorney, Whatever Your Age

It’s easy to think serious illnesses or accidents only happen to others. But unexpected events can occur at any age, potentially leaving us unable to make decisions for ourselves. This is where Lasting Powers of Attorney (LPAs) become essential, and everyone, regardless of age, should consider them.

LPAs aren’t just for older individuals; impairment can occur unexpectedly. A sudden illness or serious accident can leave someone temporarily or permanently unable to manage their affairs. Planning ahead with an LPA safeguards your interests and those of your loved ones. 

Understanding the Two Types of LPA

A Lasting Power of Attorney is a legal document allowing you to appoint someone you trust (your “attorney”) to make decisions on your behalf if you cannot do so yourself.  Crucially, there are two types of LPA, and it’s essential to understand the difference:

1. Property and Financial Affairs LPA. This type of LPA allows your attorney to make decisions about your finances and property, such as paying bills, managing your bank accounts, selling your house, or handling your investments. With your permission, this LPA can be used even while you still have capacity.

2. Health and Welfare LPA. This LPA allows your attorney to decide about your health and welfare, such as consenting to or refusing medical treatment, deciding where you should live, and making choices about your daily care. This LPA can only be used once you have lost capacity. 

Why LPAs are Essential

Unexpected Financial Burden: If you are hospitalised and unable to manage your finances, your partner might lack the legal right to access your accounts, leading to missed payments and debts. A Property & Financial Affairs LPA would prevent this. 

Risks for Business Owners: A business owner’s incapacity could halt operations. A Property & Financial Affairs LPA allows appointed attorneys to manage the business seamlessly. 

Temporary Incapacity After an Accident: If unresponsive due to an accident, your partner may not have legal rights to make health decisions without a Health and Welfare LPA. This could delay crucial treatment or prevent your wishes from being followed.

Mental Health Crisis: A sudden, severe mental health crisis can leave someone unable to make decisions. A Health and Welfare LPA ensures a trusted individual can advocate for appropriate support and treatment. 

Terminal Illness and End-of-Life Care: LPAs, particularly a Health and Welfare LPA, help ensure your end-of-life wishes are respected, relieving emotional burdens on your family.

The Pitfalls of DIY LPAs

While creating LPAs yourself might seem cost-effective, legal technicalities can lead to invalid documents due to incorrect witnessing or other common mistakes. Therefore, it’s essential to approach this process carefully.

The Cost of LPAs vs. The Cost of Not Having Them

While there is a cost associated with setting up LPAs, it’s essential to consider the potential costs of not having them.  If you lose capacity without an LPA, your loved ones may have to apply to the Court of Protection for a Deputyship order. This process can be lengthy, expensive, and stressful.  It can also mean that decisions about your care and finances are made by someone you wouldn’t have chosen.  In contrast, the cost of setting up LPAs is a relatively small investment in your future security and peace of mind.  They are arguably even more important than a Will, as they deal with your lifetime rather than just your death.

Benefits of Professional Legal Advice

Lawyers specialising in LPAs can guide you through the process, ensuring the document is legally sound and reflects your wishes. They can:

1. Explain the different types of LPAs and help you choose the right one for your circumstances.
2. Advise on appointing attorneys and discuss the implications and responsibilities
3. Minimise the risk of errors and future disputes by drafting the LPAs correctly.
4. Ensure proper witnessing and registration. 

Our Advice

Planning for the future can feel daunting, but it’s one of the most loving and responsible things you can do for yourself and your family.  We’re here to help. Contact us for a consultation to discuss your needs, or check online for an instant quotation. It’s an investment in your peace of mind and the well-being of those you care about.

The Key to Your Dream Home

The Process of Buying a House

Embarking on the journey to homeownership in the UK?  While the idea of cosy evenings and decorating dreams is appealing, the reality involves careful planning and execution. Here, we’ve set out a clear roadmap, outlining the key steps to make your house purchase as smooth as possible.

Laying the Foundation

Before you start browsing property listings, get your finances in order. This isn’t just about securing a mortgage. It’s wise to understand the whole picture. Create a detailed budget that includes mortgage repayments, legal fees (solicitor costs, searches, Stamp Duty), survey costs, moving expenses, and potential renovations.

Obtain a mortgage agreement in principle to understand how much you can borrow, but also be realistic about what you can comfortably afford each month, especially with potential interest rate changes. Finally, have a clear plan for your deposit—know where it’s coming from and how readily accessible it is.

Property Search & Viewings

Now comes the exciting part! Start your property search. However, make sure you’re focused. Define your needs and wants—location, size, and property type—and stick to your budget. Viewings are crucial. Don’t just focus on aesthetics; consider the property’s overall condition, local amenities, and transport links.

Make an Offer & Negotiation

You found “the one”. So, it’s time to make an offer. This is where your research pays off. Consider the market value and comparable properties. Be prepared to negotiate, as sellers may not accept your initial offer.

Choose a Conveyancing Lawyer

A good conveyancing lawyer will be your ally throughout this process. They will handle the legal transfer of ownership and ensure everything is in order. Don’t just pick the first name you find; shop around, compare quotes, and look for a professional experienced in the field.

Arrange a Survey

A survey is essential for uncovering any hidden problems with the property. There are three levels of survey. Choose the right one based on the property’s type and your needs. Don’t just skim the report; take the time to understand its implications. Issues identified might give you leverage to renegotiate or even walk away.

Understand the Importance of Searches

Your lawyer will conduct various searches to reveal potential issues with the property, including Local Authority searches (planning permissions and building regulations), Water & Drainage searches, and Environmental searches (contamination and flood risk). Understanding the results is vital, as they can significantly impact your decision.

Review the Contract & Raising Enquiries

The contract is a legally binding document. Your lawyer will meticulously review it and explain every clause. Don’t hesitate to ask questions. This is your opportunity to raise concerns and negotiate changes before you commit.

Finalise & Review Your Mortgage Offer

Once your offer is accepted, it’s time to finalise your mortgage. Carefully review the terms and conditions, including interest rates, repayment schedules, and any early repayment charges, to ensure you understand your obligations.

Organise Insurance

Don’t leave this until the last minute. Arrange buildings insurance from the point of exchange, as you will be responsible for the property thereafter. Also, consider contents insurance to protect your belongings and life insurance or critical illness cover to safeguard your mortgage.

Exchange of Contracts

This is the point of no return. Once contracts are exchanged, the purchase becomes legally binding for you and the seller. You’ll pay your deposit, and a completion date will be set.

Preparing for Completion

In the lead-up to completion, your lawyer will finalise all the legal paperwork, including transferring funds and arranging to pay Stamp Duty Land Tax (Stamp Duty). Ensure you’re packed and ready to move!

Completion

The day has arrived! Legal ownership of the property transfers to you. Funds are transferred to the seller, and you will receive the title deeds and keys. Congratulations, you’re now a homeowner!

Post-Completion

After the excitement settles, there are still a few things to do. First, ensure that Stamp Duty is paid within the deadline and that the change of ownership is registered with the Land Registry. Then, start thinking about redirecting your mail, setting up utilities, and managing all the other practicalities of moving.

Our Advice

Buying a house is a significant undertaking, but it doesn’t have to be a nightmare experience. You can turn your dream into a reality with a better understanding of the process and professional advice. Our team of experienced property lawyers has helped many clients purchase a new home. Don’t hesitate to contact us for further information or advice about buying or selling a property or any other property matter. We’re here to help.

Court Upholds Mother’s Best Interests in LPA Decision

A Lasting Power of Attorney (LPA) is a vital legal tool that allows you to appoint someone you trust to make crucial decisions for you if you become unable to do so. This provides peace of mind for you and your loved ones. However, the recent case of Norfolk County Council v CA and others EWCOP 64 demonstrates the complexities that can arise, even within close relationships, and the vital role of the court in protecting vulnerable individuals.

What is a Lasting Power of Attorney (LPA)?

An LPA is a profound expression of trust and intention. By creating an LPA, you take proactive steps to ensure your wishes are followed, even in challenging circumstances. This might be due to illness, injury, or simply as part of planning for later life.

Types of LPA

There are two types of LPAs in the UK: Health and Welfare and Property and Financial Affairs. The Health and Welfare LPA empowers a trusted individual to make critical decisions regarding medical treatment and care arrangements. At the same time, the Property and Financial LPA enables your chosen attorney to handle your financial matters, like paying bills or managing your assets. Given an attorney’s substantial influence on your life and well-being, choosing the right person is a deeply personal and significant decision.

The Norfolk County Council v CA Case

This case involved CA, a 79-year-old woman diagnosed with dementia, and her daughter, DA, who held both Health and Welfare and Property and Financial Affairs LPAs for her mother.  The case wasn’t simply about a disagreement regarding CA’s care; it involved serious allegations of abuse and coercive control by DA, including instances of physical abuse.

These allegations extended to DA’s ex-husband, who was also involved in the mistreatment of CA.  Norfolk County Council brought the case to the Court of Protection, seeking orders under the Mental Capacity Act 2005 and the court’s inherent jurisdiction to protect CA.  Mrs Justice Arbuthnot made findings of fact regarding the allegations of abuse, concluding that they had occurred.  The court then assessed CA’s capacity, determining that she lacked the capacity to conduct the court proceedings, make decisions about her care, and manage her property and affairs.

However, crucially, the court found that CA did have the capacity to make decisions about contact with others and to enter into or revoke an LPA.  As a result, the judge made an injunction under the High Court’s inherent jurisdiction, with specific conditions in place to protect CA from further harm.  This case highlights the critical importance of safeguarding vulnerable adults from abuse, even when a family member holds an LPA.

Key Takeaways

The Norfolk County Council v. CA case highlights several vital points.  Firstly, it demonstrates that the existence of an LPA does not automatically guarantee that the donor’s best interests are being served.  Secondly, it highlights the different levels of capacity.  Someone may lack the capacity for certain decisions but retain it for others, as was the case with CA.  Thirdly, it emphasises the court’s power to protect vulnerable individuals from abuse and ensure their well-being even when an LPA is in place.  Transparency and accountability are fundamental. Attorneys should maintain meticulous records of their decisions and actions. This transparency fosters trust and clarity and prioritises the donor’s best interests. The Court of Protection also emphasises the importance of supporting the donor’s independence as much as possible.

 What Should You Do?

If you’re contemplating the creation of an LPA, take the time to select your attorney carefully. It’s essential to have open and honest conversations about your wishes and confirm that they understand the gravity of their role.  Discussing your plans with other family members can also be helpful. A well-crafted LPA reflects your values and desires, so consider seeking legal advice from experienced lawyers who can guide you through the process and ensure that your document is customised to your unique circumstances.

Moreover, remember you have options if you ever feel uneasy about an attorney’s actions. Contact a solicitor for advice and reassurance. They can help clarify your concerns and guide you through any necessary steps, including the potential involvement of the Court of Protection if warranted. Don’t hesitate to act if you have concerns about someone’s safety.

Our Advice

We appreciate how overwhelming and emotional the process of creating a Lasting Power of Attorney can be. If you have any questions or concerns about LPAs or attorneys or need support navigating this vital process, please do not hesitate to contact us. We are here to help.

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