The Smart Way to Buy at a Property Auction

Property auctions can be an exciting and potentially lucrative way to secure your next home or investment property. With the fast pace and unique rules, getting caught up in the Moment and making hasty decisions is easy. However, with the right approach, buying a property at auction can also provide great opportunities. To help you navigate this process successfully, here’s a quick list of the dos and don’ts of buying at auction.

Essential Do’s

1. Do Your Homework

• Inspect the Property. If possible, try to see the property more than once and check it out at different times. This approach will not only give you a greater understanding of its condition, but you will also better appreciate ambient noise levels and natural light. Attend open houses to get a feel for the layout and flow.

• Reviewing the Property Pack is a critical step. The pack is a comprehensive document and a treasure trove of information detailing the property’s legal status, boundaries, planning permissions (or restrictions), and any known issues. Instruct a specialist property lawyer to meticulously review this pack with you so you fully understand the implications.

• Research the Area. Don’t just focus on the property itself. Look into the neighbourhood’s amenities, schools, transport links, crime rates, and future development plans. An in-depth analysis will give you a clearer picture of the property’s potential long-term value, which is crucial for making a sound investment decision.

• Get a Survey. A professional survey is recommended and essential when buying a property at auction. A surveyor can identify hidden defects, structural issues, or potential costly repairs that might not be obvious to the untrained eye.

2. Set a Realistic Budget

• Maximum Bid. Before you start bidding, set a firm budget and stick to it. Your budget should cover the potential hammer price, auction fees, legal fees, and stamp duty land tax. Furthermore, you should factor in any potential refurbishment or repair costs that the property survey might uncover, such as a new roof or plumbing issues.
• Secure Financing. If you rely on a mortgage, get pre-approved by your lender. Pre-approval will give you a clear idea of what you can afford and ensure you can move quickly if your bid is successful.

3. Prepare for Auction Day

• Registration. Arrive early and familiarise yourself with the auction process and rules.

• Bidding Strategy. Plan your bidding strategy. Decide on your opening bid, increments, and maximum limit. Consider if you’re comfortable with a slow and steady approach or making a bold move to scare off other bidders.

• Stay Calm. Auctions often stir up emotions. Don’t let the excitement cloud your judgment or lead you to overbid. 

Key Don’t’s

1. Don’t Bid Blind

The legal complexities of auction purchases can be overwhelming. A thorough review of the property pack is essential. A lawyer will advise you on potential issues or risks.

2. Remember Additional Costs

The winning bid isn’t the final price. Account for auction fees, stamp duty, legal fees, and any potential repair or renovation costs. Remember, additional costs can significantly increase your overall budget.

3. Remember the Auction Terms

Read the auctioneer’s terms and conditions carefully. Understand the deposit requirements, payment deadlines, and special conditions that could affect your purchase. This understanding is crucial to avoid surprises or misunderstandings during the auction process.

4. Please Don’t Get Caught Up in the Moment

It’s easy to get swept up in the excitement of an auction. Stick to your budget, avoid impulse bids, and be bold and walk away if the price exceeds what you’re willing or able to pay. 

Our Advice

Buying a property at auction can be a smart way to find a great deal. However, having the correct information and support is critical to a successful purchase. We’re here to answer your questions and guide you through the auction process. If you’d like to discuss buying a property at auction or have any other property-related questions, please get in touch with us today. We’re here to help.

Charitable Giving in Your Will

Making a Will isn’t just about distributing assets to family; it’s an opportunity to support causes you care about and leave a meaningful legacy. By including a charitable gift in your Will, you can make a lasting impact on the world while potentially reducing inheritance tax for your loved ones.

Making a Difference: Key Considerations

1. Provide for Your Dependents. Before considering charitable gifts, ensure your family and any financial dependents are well-provided for. Under the Inheritance (Provision for Family and Dependants) Act 1975, individuals who believe they haven’t been adequately provided for in your Will can claim against your estate. Open communication with your family about your charitable intentions can help prevent future disputes and ensure your wishes are respected. 

2. Understand the Inheritance Tax Implications (IHT). Charitable bequests are exempt from IHT, potentially reducing the tax on your estate. For example, if you leave 10% or more of your net estate to charity, the remaining taxable portion may qualify for a reduced IHT rate of 36%. However, consulting with legal and financial professionals is essential to understand how charitable giving can optimise your tax situation.

3. Communicate Openly with Your Family. Openly discuss your charitable wishes with your family well in advance. Explain your reasons for supporting specific causes and ensure they understand your intentions. This transparent communication can prevent misunderstandings and ensure your family supports your decision. 

4. Choose How to Give. There are two ways to leave money to a charity in your Will. You can specify a named charity or charities that will benefit or let the executors of your Will decide. Your gift can be specified as:

• Donation: A one-time gift of a specific amount or asset to a charity.
• Legacy: A gift left in your Will, typically a percentage of your estate or a specific sum.
• Charitable Trust: A more complex option that offers greater control over how your gift is used and can provide ongoing support for your chosen cause.

James’ Charitable Gift

In this example, James is a bachelor who passes away with assets worth £830,000, all in his sole name. In his Will, he leaves £50,000 to a registered charity and the remaining balance to his nephew, Simon, and niece, Laura. James’ debts (funeral expenses) amount to £5,000. He made no gifts during her lifetime, so his full nil-rate band (NRB) of £325,000 is available.

Calculating the Taxable Estate With Charitable Gift

Description	Value
Net Estate / Assets	£830,000
Nil-Rate Band	-£325,000
Debts	-£5,000
Charitable Gift	-£50,000
Taxable Amount	£450,000
IHT (36%)	£162,000
Simon & Laura Inherit	£613,000

Calculating the Taxable Estate Without Charitable Gift

Description	Value
Net Estate / Assets	£830,000
Nil-Rate Band	-£325,000
Debts	-£5,000
Taxable Amount	£500,000
IHT (40%)	£200,000
Simon & Laura Inherit	£625,000

While Simon and Laura inherited less (£12k), the charity benefited hugely by receiving a gift of £50k. Inheritance Tax has been reduced by £38k.

Important Considerations

Reduced IHT Rate: While James’s charitable gift exceeded the 10% threshold required for the reduced IHT rate, the nil-rate band already covered a portion of his estate, making the reduced rate inapplicable. The 36% reduced rate would apply in the following example:

Example: Let’s say your net estate (after deductions and reliefs) is £500,000.

• Nil-rate band: £325,000
• Baseline amount: £500,000 – £325,000 = £175,000
• 10% threshold: £175,000 * 10% = £17,500

To qualify for the reduced IHT rate, you must leave at least £17,500 to charity. The reduced rate applies to the portion of the estate exceeding the nil-rate band. If the estate’s value is below the nil-rate band, there will be no IHT to pay, even without any charitable gifts. The reduced rate applies to deaths on or after 6 April 2012.

Larger Estates: Couples with larger estates may lose the Residence Nil Rate Band (RNRB) if their estate exceeds £2 million. Including a charitable gift could help reduce the estate value below this threshold, preserving the RNRB and reducing IHT.

Deed of Variation: If James had left a smaller gift, Simon and Laura could have used a Deed of Variation to increase it within two years of James’s death, benefiting from the reduced IHT rate.

Our Advice

Donating to or leaving a legacy for a charity is a rewarding way to make a difference and support causes you care about. However, these are complex legal processes and should be discussed with qualified professionals. They will explain your options thoroughly and structure your Will so the charity and family benefit the most.

Please contact us if you need advice on leaving a gift to charity, making or revising your Will, or any other related matter. Our specialist team is here to help.

Sun, Sea, and Succession: Protecting Your Assets Overseas

The allure of overseas property and investments is undeniable. Many people expand their financial horizons beyond national borders, whether it’s a charming villa in Tuscany, a beachfront condo in Florida, or a portfolio of international investments. However, this global outlook also necessitates an international approach to estate planning.

Why Your Overseas Assets Need Special Attention

Owning assets overseas introduces a layer of complexity to your estate. Different countries have distinct laws governing inheritance, property ownership, and taxation. You must account for these nuances to avoid significant problems when administering your estate after you’re gone.

Potential Pitfalls of Ignoring International Estate Planning

1. Conflicting Wills. Some countries demand a separate Will specifically for assets located within their borders. A Will valid in the UK might not be recognised or may conflict with local laws, leading to disputes and delays.

2. Forced Heirship Rules: In some countries, particularly in Europe, laws mandate that a portion of your estate be allocated to specific family members, usually children or spouses, regardless of your stated wishes in your Will. These regulations can disrupt your intended distribution and create tension among beneficiaries.

A recent example is the UK High Court case of Del Curto v Del Curto. The outcome underscores the complexity of cross-border estates and the potential for family conflict when assets are held in countries with forced heirship rules. In this case, the deceased, a wealthy Italian businessman, Davide Del Curto, was not a UK resident. Legal proceedings took place in Chile and Italy. Still, the High Court in London upheld an Italian tribunal’s judgment awarding Mr Del Curto’s illegitimate daughter, Rita, £11 million, despite his Will not providing for her. This case is a stark reminder of the importance of understanding and planning for forced heirship rules when you have assets abroad.

3. Probate Hurdles. Navigating probate in multiple countries can be a logistical nightmare. Each jurisdiction may have its procedures, timelines, and costs, resulting in significant delays and financial burdens for your heirs.

4. Cross-Border Confusion. When assets are scattered across the globe, determining which country’s law applies to each asset can be a complex legal puzzle. This uncertainty can fuel disagreements and prolong the settlement of your estate.

5. Tax Complications. Inheritance and estate taxes vary widely between countries. With careful planning, your beneficiaries could avoid unexpected tax bills, potentially diminishing the value of their inheritance.

Crafting a Strategy for Global Asset Protection

Proactive planning is critical. You can spare your loved ones unnecessary hardships by developing a strategy to manage all your assets, including those overseas.

Essential Steps 

1. Seek Specialised Legal Advice. Engaging legal professionals experienced in international estate planning is essential. They can guide you through the intricacies of various legal systems, identify potential pitfalls, and create a tailored plan that complies with relevant and current international regulations.

2. Consider Multiple Wills. In some cases, having separate Wills for different jurisdictions might be the most effective approach. This approach can streamline the probate process and avoid conflicts between legal systems.

3. Explore Ownership Structures. How you hold your assets can significantly impact your loved one’s inheritance. Depending on your specific circumstances, joint ownership, trusts, or other legal structures offer flexibility and tax advantages. Discuss these options with both legal and financial professionals for comprehensive advice.

4. Understand Probate Procedures. Familiarise yourself with the probate requirements in each relevant country. Establish who can act as executors, what documents are needed, and any potential deadlines or fees. For example, in the UK, an executor is usually named in the Will and is responsible for managing the deceased’s estate. The probate process in the US can vary significantly from state to state.

5. Anticipate Tax Liabilities. Work with your lawyer and a financial advisor to assess potential tax liabilities in each country. They will help you to develop strategies to minimise taxes and maximise the value of your estate for your beneficiaries.

Our Advice

International estate planning may seem daunting. However, with expert guidance, it’s manageable. By addressing the complexities head-on, you can enjoy peace of mind knowing that your overseas investments are protected and your wishes will be honoured, no matter where your assets may be.

Remember, succession law and tax regimes overseas differ significantly from the rules here. What you might think are apparent solutions (such as transferring a property to a child/children) can have unintended consequences. Sometimes, tax liabilities increase. So, professional advice and planning are essential to ensure your estate goes to the right hands at the right time.

Our specialist estate planning team has years of experience dealing with complex, cross-border estates. Please contact us if you would like to discuss this or any aspect of your Will or estate planning. We are here to help.

Your Will, Your Way: Ten Steps to Ensure Your Legacy Lasts

Let’s face it: writing a Will isn’t exactly at the top of anyone’s to-do list. It’s easy to put off, assuming we have plenty of time, or it’s simply an uncomfortable topic to confront. Yet, the reality is that over half of UK adults haven’t made a Will, potentially leaving their loved ones in a precarious situation if the unexpected were to happen.

Dying Without a Will – A Risky Gamble

Dying without a Will means the law decides who inherits your assets – not your wishes. Despite the trend for living together, the law hasn’t caught up for unmarried couples. Sadly, cohabiting partners can’t inherit in England and Wales without a valid Will. Distant relatives might inherit instead of close friends, and your minor children’s future could be uncertain.

Your Will, Your Way

A will isn’t just about distributing possessions. It’s a way to express your final wishes, covering everything from funeral arrangements to guardianship for your children. It allows you to make charitable donations, protect business interests, and ensure your loved ones are financially secure.

Ten Steps to Ensure Your Legacy Lasts

Drawing up your Will can be daunting, but it doesn’t have to be. To get started, consider these ten essentials:

1. List It All Out. Compile a detailed inventory of your assets (including digital), including property, bank accounts, investments, pensions, valuable personal belongings, and any business interests.

2. Seek Professional Guidance. Enlist the expertise of a specialist lawyer. They’ll ensure your Will is legally sound, and tailored to your specific circumstances.

3. Identify Your Dependents. Consider all individuals who rely on your financial support. This includes your spouse, children, stepchildren, or others who may need long-term provision.

4. Name Your Beneficiaries and Charities. Specify who will inherit specific assets or proportions of your estate, and remember to include any charitable donations you wish to make.

5. Plan for Contingencies. Life is unpredictable. Address scenarios like a beneficiary predeceasing you or becoming incapacitated. This avoids complications and ensures your wishes are carried out even in unexpected circumstances.

6. Choose Your Executors Carefully. Your executors are responsible for administering your estate and carrying out your wishes. Select trustworthy individuals or professionals who can handle this responsibility diligently.

7. Be Clear and Concise. Avoid ambiguous language to prevent misunderstandings or disputes. A solicitor can help. They will draft a Will that is clear, concise, and legally sound.

8. Understand the Tax Implications. Seek professional advice to understand the potential impact of inheritance tax on your estate and explore strategies to minimise tax liabilities.

9. Sign and Witness Properly. Your Will must be signed and witnessed according to legal requirements to avoid it being declared invalid.

10. Store Your Will Securely. Keep your will in a safe place and inform your executors of its location. That way, your wishes will be carried out smoothly and without delay.

Our Advice

We understand that making a Will can be uncomfortable. But it doesn’t have to be a scary or morbid experience. It is a process that brings peace of mind. Once your Will is finalised, you’ll likely feel a sense of relief knowing you’ve taken care of this important responsibility.

If you need assistance drafting or updating your Will or need a quotation, our specialist team of lawyers is here to help. Contact us today for a confidential consultation.

Probate Claims and the Ticking Clock

If you believe someone has unfairly left you out of a Will or you’re dissatisfied with your inheritance, you may have legal options. However, the recent case of James v Scudamore is a stark reminder that acting promptly is crucial in probate claims.

Understanding Probate Claims

When someone passes away, their estate goes through a legal process called probate. Probate claims are legal challenges to the distribution of an estate or its administration.

Essentially, there are three main ways to challenge a Will:

1. Challenges to the Validity of a Will. These claims argue that a Will is invalid due to a lack of mental capacity, undue influence, or forgery. Generally, no limitation period applies to these claims, but undue delay may weaken your case.

2. Inheritance (Provision for Family and Dependants) Act 1975 Claims. These are claims for ‘reasonable financial provision’ from the estate. They are typically made by spouses, children, or those financially dependent on the deceased. ‘Reasonable financial provision’ is a legal term that refers to the amount of money or property that a court considers fair and necessary for the claimant’s maintenance. These claims are subject to a strict six-month time limit from the date of the Grant of Probate.

3. Absence of or Improper Estate Administration. This involves claims where there’s evidence that the executors haven’t appropriately acted or failed to administer the estate according to the Will or intestacy rules (the rules that apply when someone dies without a Will). Once again, these claims have no strict time limit, but acting sooner is always preferable.

The Importance of Acting Promptly

There’s a good reason for strict deadlines for Inheritance Act claims. The law aims to balance the interests of beneficiaries who expect to receive their inheritance with those who may have a legitimate claim. Delays invariably lead to complications. Often, assets have been distributed before a claim is filed. Naturally, this makes it harder to resolve disputes.

However, acting quickly is advantageous even in cases with no strict time limit, like challenges to the Will’s validity or estate administration claims. Delaying action can lead to difficulties gathering evidence, witnesses becoming unavailable, or the estate being significantly altered.

Unjustified Delay in James v Scudamore

The recent case of James v Scudamore and others [2023] EWHC 996 (Ch) is a cautionary tale, highlighting the dangers of waiting too long to act. In this case, the claimant, Martyn James, challenged his father, Ivor’s Will, claiming it was not properly prepared.

Ivor’s original 1998 Will left Christine with a life interest in Ivor’s marital home. On her death, the Will stipulated that Ivor’s two sons, Martyn and Raymond, would inherit the property. However, the 2002 codicil changed her life interest, leaving the property to Christine.

Ivor died in June 2010, and Christine obtained a grant of probate, distributing the assets in 2011. Martyn believed the 2002 codicil was not validly executed. While he took legal advice in 2013, he waited seven years until 2020 to challenge its validity. By then, key witnesses (including Christine) had passed away.

When the High Court heard the case in 2023, Judge Matthews ruled against Martyn, saying his delay in bringing the case made it unfair to change the Will now. Additionally, the judge questioned the truthfulness of the son’s claims.

Key Takeaways

1. Don’t Delay. If you believe you have a valid claim, seek legal advice as soon as possible. Even in cases without strict time limits, acting promptly strengthens your position.

2. Gather Evidence. Collect relevant evidence, such as financial documents, correspondence, and witness statements, to build a strong case.

3. Consider Mediation. Probate disputes are emotionally and financially draining. However, mediation can offer a quicker, more amicable resolution, potentially saving you time, money, and emotional stress. It’s a constructive way to find a solution that respects everyone’s interests.

Our Advice

Probate disputes can be complex and emotionally challenging, but understanding your rights and the available legal avenues is crucial. If you have concerns about the distribution of an estate or its administration or are unsure whether you may have a claim, we strongly encourage you to seek expert legal advice as soon as possible. This will provide the necessary guidance and support to navigate the process effectively.

Our experienced team can provide expert guidance throughout the process, including exploring mediation. Please don’t hesitate to get in touch. We’re here to help.

What Your Dream Home Might Be Hiding

Buying a house is a dream for many, an exciting time and the start of a new chapter for most. However, your dream home could hide many unpleasant surprises beneath the fresh paint and manicured lawn. This is where property searches come in – the unsung heroes of the home-buying process.

The Crucial Role of Property Searches

Property searches are comprehensive investigations into a property’s history and surrounding area, designed to uncover potential issues that could turn your dream home into a nightmare. These issues range from unapproved building works and environmental hazards to legal disputes and financial liabilities.

Unveiling the Hidden Truth

1. Local Authority Searches: These searches delve into local council records, revealing planning permissions, building regulations, and potential contamination risks. They’ll tell you if a noisy industrial complex is planned next door or if the land your home sits on is contaminated.

2. Environmental Searches: These assess the risk of flooding, ground stability issues (subsidence), and the presence of landfill sites or other environmental hazards. Imagine discovering your new home is in a flood zone or built on unstable ground.

3. Water and Drainage Searches: These confirm your property’s connection to mains water and sewerage, who’s responsible for the pipes, and whether public drains run under it. This is crucial, as drainage issues can lead to costly repairs and potential health hazards.

4. Additional Searches: Depending on the location and property type, you may need mining searches to check for any mining activities that could affect the property’s stability, chancel repair liability searches to determine if you’re liable for church repairs, land registry searches to confirm ownership and any potential disputes, and more. These specialised searches can reveal hidden liabilities that could significantly impact your ownership experience.

Location and Property Type Matter

The searches you need can vary significantly depending on the property’s location and type. Older properties, those in specific areas (like mining regions), or those with unique features may require additional, specialised searches.

Expertise Advice

Navigating the complexities of property searches can be overwhelming. This is where experienced property lawyers help. Their expertise can save you time and money by identifying the most relevant searches, explaining legal jargon, and highlighting potential risks. Should any issues arise, they can negotiate with the seller or even advise against the purchase if the risks are too high.

Think of property searches as an insurance policy for your investment. While they might seem like an added expense, they can save you from unexpected and costly surprises later. Neglecting these searches could lead to legal disputes, financial losses, or even health hazards if the property is unsafe. Not conducting these searches is akin to buying a car without checking its history or driving it first. It’s a risk you want to avoid taking with such a significant investment.

Don’t Let Your Dream Turn into a Nightmare

Buying a property is a significant financial and emotional commitment. Don’t let hidden issues turn your dream home into a nightmare. Understanding the importance of property searches and seeking professional advice is key. It means you’ll be well-prepared to navigate the process confidently and protect your investment.

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

Mistakes Executors and Administrators Must Avoid

Losing a loved one is never easy. And when you’re named as the Executor in their Will (or the court appoints you as Administrator if there’s no Will), the burden of settling their estate can feel overwhelming. The responsibilities are significant, and the legal implications are real.  Mistakes during this process can lead to personal liability, substantial financial loss for the estate, and even conflict among grieving family members. So, what are the common mistakes that Executors and Administrators make, and how can you avoid them?

1. Misunderstanding Fiduciary Duty

As an Executor or Administrator, you have a legal obligation to act in the estate’s and its beneficiaries’ best interests. This means making sound financial decisions, being transparent with beneficiaries, and avoiding any actions that could benefit you personally at the expense of the estate. Open communication is critical to maintaining trust and avoiding conflicts.

2. Incorrectly Handling Taxes

The tax implications of an estate can be complex, especially if the estate includes foreign assets or complex investments. Different types of assets may have different tax treatments, and failing to calculate and pay taxes correctly can result in penalties and interest charges for which you may be personally liable. Seek professional advice to navigate this tricky area.

3. Failing to Identify and Collect All Assets

This includes everything from bank accounts and investments to digital assets like cryptocurrency, online accounts, and intellectual property. Overlooking even a tiny asset can shortchange the beneficiaries and lead to legal problems later. Be thorough and consider professional help to ensure you uncover everything.

4. Improperly Distributing Assets

All debts, taxes, and estate expenses must be paid before distributing assets to beneficiaries. Rushing this process can lead to personal liability if you distribute assets prematurely, and more must be left to cover outstanding debts.

5. Conflicts of Interest (Even the Appearance of One)

If you are also a beneficiary, being extra cautious is crucial. Even the perception of a conflict of interest can damage trust and lead to legal challenges. Be transparent with all beneficiaries and consider seeking independent legal counsel to guide your decisions.

6. Wasting or Mismanaging Assets (“Devastavit”)

Legally known as ‘devastavit’, this occurs when a Personal Representative mismanages or wastes estate assets through negligence, reckless decisions, or personal use of estate funds. This can include selling assets below market value, making risky investments, or using estate funds for personal expenses. If you take these actions, you can be personally liable for any losses the estate suffers.

7. Neglecting to Keep Meticulous Records

Maintain detailed records of every transaction, decision, and communication related to the estate. This documentation is not just a formality but a crucial safeguard. It can protect you if any questions or disputes arise later on, providing a clear and transparent account of your actions.

Our Advice

While serving as an Executor or Administrator is an act of love and responsibility, it doesn’t mean you have to go it alone. We understand that dealing with a loved one’s estate can be stressful. Seeking professional help is not a sign of weakness but a wise decision that can provide invaluable guidance, alleviate stress, and ensure the process is efficient and compliant.

A qualified lawyer specialising in estate administration can provide invaluable guidance, ensuring the process is efficient and compliant and protects you from personal liability. They are regulated by the Solicitors Regulation Authority (SRA) and carry professional indemnity insurance, offering you further peace of mind.

Consider appointing a professional executor in your Will to relieve your loved ones of this burden. They have the expertise and impartiality to handle even the most complex estates, giving you peace of mind and confidence in the process. If you would like more information or advice about creating a Will, identifying suitable executors, or any other estate planning matter, please get in touch with us. We’re here to help.

Equity Release in Retirement

Equity release continues to gain popularity among older UK homeowners, often due to rising property values and the need for additional income in retirement. It allows them to tap into the value (equity) they’ve built up in their homes without selling. But it’s a significant financial decision with legal and financial implications. For instance, it could affect your eligibility for means-tested benefits and the inheritance you pass on to your loved ones. Here are a few pointers to explain what equity release means contractually and how it works in practice.

Beyond the Basics

Equity release secures a loan against your home, providing you access to cash without selling the property. There are two primary options:

1. Lifetime Mortgage

This involves borrowing against the value of your home, with interest accruing over time. You typically repay the loan upon death or when you enter long-term care.

2. Home Reversion Plan

This option involves selling a share of your home in return for a lump sum or regular payments. You retain the right to live there rent-free.

Key Considerations

1. Scrutinise the Contract

Equity release contracts are detailed and can be confusing. It’s essential to read them carefully and understand your agreement.  Understanding the contract is vital to making a good decision about equity release. Here are some key things to look out for:

• Find out what the interest rate is and if it could change. A higher interest rate means you’ll owe more money over time.
• Ask about any fees you’ll have to pay, like the cost of setting up the loan or getting your home valued.
• If you want to repay the loan early, find out if there are extra charges. These can be pretty high.
• Check to see if the contract includes a no-negative equity guarantee. This means that even if the value of your home decreases, you won’t owe more than what your house is worth. It’s a safety net that ensures you won’t end up in debt because of your equity release.
• Equity release can affect how much you leave behind for your loved ones. Find out how much of your home’s value they’ll inherit after the loan is paid off.

2. Seek Independent Legal Advice

Equity release can be a valuable tool to enhance financial security in retirement, but it requires a comprehensive understanding of the legal framework. Seeking independent legal advice, a legal requirement before signing any equity release agreement is not only advisable but empowers you to take control of your financial decisions. A solicitor will pay close attention to clauses regarding fees, interest rates, potential early repayment charges, and any restrictions on using funds, ensuring you fully understand the terms of the contract.

3. Look at the Long-Term Implications

As we’ve already mentioned, equity release can affect your eligibility for means-tested benefits and the inheritance you pass on to your loved ones. It’s crucial to engage in open and honest discussions with your family, understanding their perspectives and jointly assessing the long-term consequences of this decision. This collaborative approach not only provides support but also fosters a sense of connection during this process.

4. Choose a Reputable Provider

Choose a provider that adheres to the strict standards set by the Equity Release Council (ERC). The ERC is an industry body that sets standards and provides consumer protection for equity release. Research providers thoroughly and verify their credentials before proceeding.

Safeguarding Your Rights

As a homeowner, you are entitled to certain protections, and one of the most significant is the ‘no negative equity guarantee.‘ In fact, this guarantee is a fundamental component of any equity release contract. Essentially, it ensures that you will never owe more than the value of your property, acting as a safety net for your financial well-being. Moreover, it provides you with peace of mind and confidence, ultimately reassuring you about your financial future.

Our Advice

Equity release can seem like a simple solution. But awareness of potential downsides is essential. Hidden fees, rising interest rates, and impacts on inheritance are just a few things to consider. Specialist financial and legal advice can help you navigate these complexities and ensure you’re making the right choice. They can provide a comprehensive understanding of the legal and financial implications, help you compare different providers and products, and ensure you fully understand the terms of the contract.

As the ERC suggests, talk to your family, too, as they might have valuable insights. Furthermore, for additional information, advice, or a quotation, please don’t hesitate to contact us. We are always here to help.

Bank of Mum and Dad: A Blessing or Inheritance Curse?

The dream of homeownership is increasingly challenging, prompting many parents to become a “Bank of Mum and Dad” and offer financial support. While generous, these financial gifts can become an inheritance curse, leading to tax issues, family disputes, or resentment among siblings. This impacts not only future inheritance but also emotional well-being and fairness.

Presumption Against Double Portions

The “presumption against double portions” is a legal principle stemming from common law. It states that it’s unfair for a child to receive the same inheritance twice. If a parent gives a significant gift and then leaves a similar gift in their Will, others might challenge the Will.

The Potential Impact on Inheritance

Courts presume a parent wouldn’t favour one child, but this is rebuttable. The parent’s intention behind the gift is critical. Court cases illustrate this: 

Case Law Examples

Phillips v Cameron [1999] Ch 386. In this case, the son received substantial sums from his mother during her lifetime. The court considered deducting these gifts from his share of her estate. Ultimately, the court decided that the gifts were not advancements but rather acts of “pure bounty” or spontaneous generosity from the mother. The court took several factors into account. Including the mother’s affection for her son, her financial circumstances at the time of the gifts, and the lack of evidence suggesting she intended them to be part of his inheritance.

In Race v Race [2002] EWHC 1868 (Ch), a father made a Will granting his daughter the right to live rent-free in a pub he owned. Later, he gifted her half the pub. The court ruled that this gift was an advancement of her inheritance, as it fulfilled part of the provision in the Will. This meant that the value of the half-share in the pub would be deducted from her overall inheritance upon the father’s death to prevent her from receiving a “double portion.”

Barraclough v Mell [2005] EWHC 3387 (Ch) involved a father who gifted his daughter £20,000 to help her buy out her husband’s share in their family home. The court ruled that this gift was a “portion” and should be considered an advancement of her inheritance. A document signed by the father two months after the gift confirmed his intention. This case shows that even gifts not explicitly linked to inheritance can be considered advancements if the giver’s intent is clear.

Kloosman v Aylen & Ors [2013] EWHC 435 (Ch). In this case, a testator had made lifetime gifts to two of his children. After he died, the court ruled that lifetime gifts to children did not need to be considered when distributing the remaining estate, as there was evidence that the gifts were intended to supplement their inheritance. This case demonstrates the importance of clearly documenting your intentions, such as through a detailed Will or other legal documents, to avoid ambiguity and potential disputes.

Protecting Your Intentions

Ensure your intentions are clear by:

1. Talk openly with your children about your intentions regarding their inheritance. Being frank can help them understand your decisions, avoid misunderstandings, and potentially prevent disputes in the future.
2. Clearly outline your wishes in your Will. Specify whether lifetime gifts are additional or part of their inheritance.
3. Consult a legal professional specialising in estate planning. They can provide tailored advice and draft legally sound documents.

Our Advice

Don’t let a gift become a burden. The Bank of Mum and Dad can be a lifesaver, but navigating legal complexities is crucial. Understanding the presumption against double portions and taking steps to protect your intentions ensures your generosity is a blessing. Our experienced estate planning team can help you create a comprehensive estate plan. This will safeguard your assets and respect your wishes. Contact us today. We’re here to help.

Can I Keep My Will Secret?

Usually, a Will become public after a Grant of Probate is issued. However, to protect the “dignity and standing” of the late Queen, the High Court ordered Prince Philip’s Will to be kept secret for 90 years. Since then, following the judgment of the President of the Family Division in the case of Prince Philip’s Will, nine original royal wills, envelopes, and seals have recently been released for public access.

This begs the question: can an average person keep their Will secret? After all, you may not want everyone to know your estate’s details or who inherits what.

Privacy and Your Will

Your Will is a private document. Even if family members pressure you to disclose its contents, you’re not legally obliged to show anyone. Only named executors are entitled to read the Will.

However, you can’t keep the terms of your Will private after you die. When the Court issues the Grant of Probate, the authority of the executor(s) is confirmed, the estate is distributed according to the terms of the Will, and any Will registered with the Probate Registry becomes a public document.

That said, when a Grant of Probate isn’t required, the Will can remain private. While it’s common for beneficiaries to ask to see a copy of the Will, it’s at the discretion of the executor(s) whether they provide one, and they are only entitled to information related to them.

Secret Trusts

A secret trust can be used to conceal the identity of a beneficiary. Two types of secret trust exist a half-secret and a fully secret trust. A fully secret trust makes no mention in the Will whatsoever; a gift to a person is made in the Will on the understanding that the person passes it on to an unnamed beneficiary. This agreement is made outside the Will entirely.

A half-secret trust names the trustee in the Will but does not give the trust’s terms, including the beneficiary.

While secret trusts can be useful for maintaining privacy, certain criteria must be fulfilled. Furthermore, unless the trust is set up correctly, the secrecy surrounding this type of trust will likely complicate matters for your executors. It may lead to disputes and delays in administering your estate.

Also, if the person holding assets in a secret trust dies or loses capacity before communicating the terms of the trust to anyone else, or written evidence isn’t easily available, there will likely be issues. Recent case law has also shown a difference between intending to create a trust and informally expressing wishes in the hope that they’ll be carried out.

Role of Discretionary Trusts

Often, the motivation behind setting up secret trusts is a moral obligation. In this context, one option is to make a Will leaving assets in a discretionary trust. In terms of privacy, A discretionary trust can include several beneficiaries, giving the trustees discretion on who should benefit and when.

Letter of Wishes

As mentioned earlier, a letter of wishes can offer privacy and is often used with discretionary trusts. Drafted alongside your Will, it provides additional context and guidance to your trustees on how to make decisions.

While not legally binding, a letter of wishes remains confidential. This is helpful for including sensitive information. It’s also easier to change or update than a Will.

However, your Will must be drafted correctly, especially if trusts are involved. A letter of wishes should not contain anything that could conflict with the contents of your Will. After all, it may create a strong moral obligation for the executors to follow its contents, but it’s not legally binding.

So, in summary, while it’s frequently recommended as an accompaniment, the Will itself (including appropriate trusts) should do the heavy lifting for your estate planning.

Updating and Keeping Your Documents Safe

Alongside your Will, a letter of wishes should be reviewed and updated regularly to account for any changes in personal circumstances – or preferences.

Of equal importance is where you keep these documents. Quite apart from the safety aspect (risk of damage and so on), it’s vital that your executors can easily find your Will and letter of wishes. In 2019, Lloyds failed to pass on over 9,000 Wills of deceased customers, leading to hundreds of families distributing assets incorrectly. This alone highlights why knowing where the Will is held is so important.

You have a few options for storing your Will, such as keeping it at home or with your solicitor. The best choice depends on your circumstances.

Any letters of wishes should be stored with your Will. Furthermore, it’s crucial not to attach them physically, as this could invalidate the Will. Keep these documents together. Your executors and trustees need them to understand and fulfil your wishes.

Finally, consider registering your Will with the National Wills Register for a small fee. This can help ensure your Will is found and followed after your death.

Our Advice

Creating a Will involves many important decisions. Our specialist team has extensive experience drafting Wills, letters of wishes, trusts, and other estate planning documents.

We also assist those responsible for administering estates. In addition, we act as professional executors and trustees for clients who prefer an independent expert. Contact us for more information or advice. We’re here to help.

What Happens if an Executor Dies?

The unexpected death of an executor can introduce a significant level of stress and emotional burden into the probate process, particularly during an already emotionally challenging time. However, what happens if an executor dies, including when the death occurs, can significantly impact how the estate is managed moving forward.

Understanding the Administration of Estates Act 1925

The Administration of Estates Act 1925 (AEA 1925) is the legal foundation of estate administration in England and Wales. It outlines the procedures for asset distribution, appointing personal representatives (executors or administrators), and settling debts and taxes. Crucially, the AEA 1925 also addresses the legal steps to take if an executor dies, including appointing administrators, following the chain of representation, and distributing assets when an executor cannot fulfil their role.

Example 1: Executor Dies Before the Will-Maker

If the executor passes away before the person who made the Will (the testator), the following steps depend on whether an alternate executor was named:

1. An alternate executor is named. The alternate seamlessly assumes the role, ensuring a smooth continuation of the probate process.

2. No alternate executor is named. If there is no alternate and the sole executor passes away, a beneficiary can apply to the court to appoint an administrator. While this ensures the estate is handled according to the testator’s wishes, it’s important to note that the process can be time-consuming and may cause significant delays, underscoring the need for proactive estate planning. 

Example 2: Executor Dies After the Will-Maker, But Before Probate Is Granted

In this example, probate, the legal process of validating a Will and granting authority to the executor, has yet to begin.

1. There is a sole executor. As in the previous example, if the sole executor dies, a beneficiary must apply to the court for an administrator.

2. There are multiple executors: The surviving executor(s) can continue the probate process and estate administration without interruption.

Example 3: Executor Dies After the Will-Maker and After Probate Is Granted

With probate granted, the executor holds legal authority over the estate. However, their death at this stage can lead to complications.

1. Sole executor. If the deceased executor left a will, a “chain of representation” may be employed, allowing the executor named in their will to step in. Otherwise, an administrator must be appointed.

2. Multiple executors. The remaining executors continue administering the estate as initially planned.

Our Advice

Planning is key! While the law provides solutions when an executor dies, proactive planning can save time and avoid potential disputes. Naming multiple executors in your Will creates a backup plan, ensuring the process can continue if one cannot act.

Regularly reviewing your Will is not just a task but a responsibility. Life circumstances change, and it’s crucial to ensure your Will remains updated, including confirming the named executors are still willing and able to serve.

If you’re considering making or amending a Will, our specialist lawyers can help. They have many years of experience advising clients on Wills, trusts, and probate matters. Please contact us for further information or advice on this or any other related issue. We’re here to help.

Navigating Probate Delays

The loss of a loved one is a difficult time, and the legal process of probate can add an extra layer of stress. Probate, the court-supervised process of administering a deceased person’s estate, can often be long and complicated, leading to unwelcome delays during an already emotionally challenging period.

Although there have been some improvements, the Ministry of Justice (MoJ) and HM Courts & Tribunals Service (HMCTS) still face criticism for delays and inefficiencies in the probate process.

Indeed, senior politicians have joined professional bodies in raising serious concerns that these issues create financial hardship for grieving families in the lead-up to the general election.

However, understanding the common pitfalls and taking proactive steps to navigate these delays can make the probate process smoother and less stressful.

Common Causes of Probate Delays

Several factors can contribute, but the most common include:

1. Incomplete or Incorrect Documentation. Complete and meticulously check all forms. Submit all necessary documents, such as the Will, death certificate, proof of identity and address, property deeds, and financial records. Incomplete or inaccurate information unnecessarily lengthens the process.

2. Family Disputes. Disagreements among beneficiaries about the validity of the Will or the distribution of assets can lead to lengthy legal proceedings. Open communication and, if necessary, mediation help to resolve family disputes.

3. Complex Estates. Probate could become intricate if the deceased had substantial assets, foreign holdings, or business interests. An experienced probate lawyer can effectively navigate these complexities.

4. Difficulty Locating Heirs or Assets. If beneficiaries are challenging to locate or the full extent of the deceased’s assets is unknown, it can significantly impede the probate process. Maintaining organised records of assets and beneficiaries during the deceased’s lifetime is highly beneficial. 

Gathering Essential Documents

Before initiating probate, pull together the following essential documents:

1. The Original Will. This outlines the deceased’s wishes, including the distribution of their assets.
2. Death Certificate. This provides official proof of death, an essential requirement before the process can begin.
3. Proof of Identity and Address. This is needed for the individual who handles the probate (not the deceased’s details).
4. Inventory of Assets and Liabilities. Compile a comprehensive list of the deceased’s assets and debts.
5. Financial Records. Gather bank statements, investment accounts, and other financial records that clearly show the deceased’s financial situation.
6. Deeds and Titles. These provide required proof of property ownership, vehicles, and other valuable assets.
7. Tax Documents. Recent tax returns are crucial in assessing the estate’s tax liabilities.
8. Insurance Policies. Gather life insurance policies and other relevant policies like home or car insurance.

Our Advice

Start the probate process as early as possible. Don’t delay. The sooner you start, the sooner you can finish. Be very careful with the details and keep all probate-related documents together. Create a timeline with important deadlines to help you stay on track.

You can go through probate without a lawyer, but having one can give you peace of mind. Probate lawyers know the rules and regulations inside out. They can make sure you meet all legal requirements and avoid costly mistakes.

If the estate is complicated, they can also help resolve family disputes and take some burden off grieving family members. Their expertise can save you time, money, and stress, allowing you to focus on what truly matters during this difficult time. If you need more advice or information about Wills, trusts, or probate, please contact us. We’re here to help.

Safeguarding Your Investment by Extending Your Lease

Leasehold properties are a common form of home ownership in the UK, especially for flats and apartments. However, a lease has a fixed term, and as this term gets shorter, the property’s value may decrease. This is where lease extensions come into play, allowing leaseholders to extend their ownership rights and safeguard their investments.

Benefits of Extending Your Lease

Extending your lease isn’t just about legal mumbo jumbo. There are several compelling reasons to consider extending your lease. Those at the top of the list include:

1. Maintaining your property’s value. As the remaining lease term shortens, the property’s value can decrease significantly. Extending the lease can help maintain or even increase the property’s market value.

2. Securing a mortgage or remortgage. Lenders get nervous about short leases. Extending yours gives you more options when you need a mortgage or want to remortgage with better terms.

3. Gaining peace of mind. Knowing you’ve got a long lease means you can relax and enjoy your home without worrying about time running out.

Legal Framework for Lease Extensions

The Leasehold Reform, Housing and Urban Development Act 1993 provides leaseholders of flats with the statutory right to extend their lease by 90 years, provided they meet specific criteria. The main criteria include:

1. Qualifying Tenant. The leaseholder must have owned the property for at least two years.
2. Long Lease. The original lease must have been granted for a term of more than 21 years.

Informal vs. Formal Options

There are two main routes to extending a lease:

1. Informal Lease Extension. This method involves direct negotiation with the freeholder (landlord) to agree on the lease extension terms. If both parties are willing to cooperate, this can be a faster and more cost-effective option.

2. Formal Lease Extension. If an agreement cannot be reached informally, the leaseholder can serve a formal notice on the freeholder to initiate the statutory lease extension process. This process is more regulated and involves a formal valuation to determine the premium payable.

The Lease Extension Process

Extending your lease can seem complicated, so getting advice from a legal professional who knows leasehold law is a good idea. Here are the basic steps:

1. Initial Valuation. A valuation determines the premium payable to the freeholder for the lease extension.

2. Serve Notice. The leaseholder serves a formal notice on the freeholder stating their intention to extend the lease.

3. Negotiation (if applicable). If an informal agreement is possible, negotiations take place to finalise the terms.

4. Valuation (if applicable). If an informal agreement is not reached, a formal valuation is conducted.

5. Lease Extension Granted. Once the premium is agreed upon or determined, the lease extension is granted, and the lease is extended by 90 years.

Our Advice

Extending your lease on a leasehold property in the UK is a crucial step in protecting your investment, securing a mortgage, and ensuring peace of mind. Our property team can guide you through the process, explain the legalese in plain English, and ensure you get the best deal possible. If you want to extend your lease or need advice about any property matter, please don’t hesitate to contact us. We’re here to help.

Disinherited Granddaughters Face Hefty Legal Bill

Frederick Ward’s five granddaughters, disinherited in his will, now face a large legal bill after losing their High Court case, Gowing v Ward. They had claimed undue influence, alleging their grandfather was coerced into disinheriting them after their father’s death.

Unravelling the Dispute

Frederick Ward’s estate became a point of contention after he made a new Will following the death of his son, Fred Junior. This new Will drastically altered the distribution of his assets, leaving the entire estate to Frederick’s surviving children, Terry and Susan. It excluded Fred Junior’s five daughters.

Believing their uncle and aunt had unduly influenced their grandfather, the granddaughters challenged the Will’s validity. The High Court was tasked with determining whether the new Will was a genuine reflection of Frederick’s wishes or the result of undue influence. This involved scrutinising the evidence, including witness testimonies and any documentation surrounding the creation of the new Will.

The High Court’s Verdict

Despite their heartfelt pleas, the High Court found no evidence supporting the granddaughters’ undue influence claims. The judge ruled that that Mr Ward was “entirely rational” and had testamentary capacity when he made the second Will in 2018 Will. Furthermore, he emphasised the minimal contact between the deceased and the grandchildren in his final years.

As a result, the court upheld the second Will and ordered the granddaughters to bear the burden of their legal costs, adding another layer of emotional and financial hardship to their loss.

Key Lessons and Implications

Gowing v Ward demonstrates the difficulties and potential for family strife when challenging a Will due to undue influence. Strong evidence of coercion is essential to overturn a Will; mere suspicion is not enough. Legal battles can cause lasting harm to relationships, and alternative solutions like mediation may be a better approach.

The case also emphasises the importance of legal advice when creating or changing a Will, especially for complex situations. Lawyers ensure proper documentation and can help prevent future disputes. They also must assess a client’s mental capacity and, if in doubt, seek a medical opinion. While such views are influential, they are not definitive. A lawyer’s testimony and file notes provide crucial context for the court to assess capacity.

Our Advice

Planning for the future can bring peace of mind to you and your loved ones. Our specialist wills, trusts and estates team can help you create a comprehensive estate plan that clearly outlines your wishes and minimises the risk of future disputes.

If you are concerned that your Will may be challenged after you die, or you are worried about the validity of a loved one’s Will, please contact us. We’re here to help.

How Revoking Your Will Can Affect You

Your Will is a vital document that outlines your wishes for the distribution of your assets after you pass away. But life circumstances change, and what you wanted ten years ago might reflect something other than your current priorities. In such cases, consider revoking or destroying your existing Will.

When Should You Revoke or Destroy Your Will?

There are many reasons why you should revoke your existing Will. These are some of the most common:

1. Change in Family Circumstances: Life changes such as marriage, divorce, the birth of children, or estrangement from beneficiaries can all necessitate changes to your Will. For instance, if you’ve recently divorced and want to remove your ex-spouse as a beneficiary, you may need to revoke your existing Will.

2. Acquisition or Disposal of Assets: Significant changes in your financial situation, such as inheriting property or selling a business, might warrant an update to your Will.

3. Impracticable Existing Will: If you think the terms of your current Will are no longer practical, revoking it becomes necessary.

4. Creating a New Will: A new Will automatically revokes any previous Will, ensuring your latest wishes are met.

How to Revoke Your Will

The Wills Act of 1837 governs how Wills are revoked in the UK. There are three recognised methods:

1. Making a New Will: Drafting a new Will is the most straightforward way to revoke a previous one. A well-drafted new Will typically includes a clause revoking all former Wills. This ensures clarity and avoids confusion. The process involves reviewing your current assets, considering your beneficiaries, and clearly stating your wishes for their distribution.

2. Creating a Codicil: A codicil is a legal document that amends an existing Will without revoking it entirely. However, if the codicil significantly alters the original Will, it might be considered a new Will, revoking the previous one.

3. Physical Destruction: You can revoke your Will by physically destroying it with the intention to do so. This can be done by burning, tearing it into pieces, or shredding it. However, this method carries some risks:

• The destruction must be intentional. Accidental damage or loss won’t revoke the Will.
• Having witnesses present during the destruction can help establish your intent if challenged later. These witnesses can attest that you destroyed the Will intentionally and not accidentally, which can be crucial in legal proceedings.
• If you have multiple Wills, destroying one might not revoke all of them, especially if the others have yet to be explicitly cancelled.

Cautionary Tale – Jones v Tracey & Ors

Is a lost Will revoked?

In Jones v Tracey & Ors, the dispute centred on the estate of the late Mr Turner. After the original document was lost, the validity of his Will was contested. Mr. Jones, named as the primary beneficiary in a copy of the will, asserted its legitimacy.

However, Ms. Cano, Mr. Turner’s sister, argued that the absence of the original Will indicated its revocation, which would result in her inheriting under intestacy laws. The court had to determine whether the presumption of revocation due to the missing Will applied or if the copy held by Mr Jones could be accepted as valid for the distribution of Mr Turner’s estate.

This case is a good example of why not dealing with revoking or destroying a Will, and seeking professional advice can have serious consequences.

Essential Considerations When Revoking or Destroying a Will

Ensuring your intentions are clear when you revoke your Will is crucial. If you opt for destruction, it’s best to do so in the presence of witnesses who can later verify your intent.

While the methods mentioned above are legal, consulting a specialist lawyer ensures you follow the correct procedure and avoid potential complications.

Once you’ve revoked your old Will, ensure your new Will is properly stored in a safe and accessible location. Many people choose to store their original Will with their solicitor. This ensures it is kept safe and means that if the original is lost or destroyed, a copy can be proven in court, which would be much harder if the Will were solely in the client’s possession.

Our Advice

Revoking or destroying a Will is a serious decision.  Understanding your options and the potential implications is crucial. For instance, if you revoke a Will without properly drafting a new one, your estate may be distributed according to intestacy laws, which may not align with your wishes.  While this blog provides a general overview, it’s not a substitute for professional legal advice.

If you’re considering making a Will or revoking your Will, our specialist lawyers have many years of experience advising clients on wills, trusts, and probate matters. Please contact us for further information or advice on this or any other related issue. We’re here to help.

Building Societies Step Up to Aid Victims of Philips Trust Collapse

The collapse of Philips Trust Corporation (PTC) in 2022 sent shockwaves through the financial lives of thousands of building society customers. PTC, responsible for managing numerous trusts holding assets totalling £138 million, fell into administration amidst allegations of mismanagement, leaving over 2,300 individuals facing the devastating loss of their life savings. However, several building societies have stepped up to provide financial aid to their affected customers in a positive turn of events.

Voluntary Aid for PTC Victims

Participating societies include Leeds, Newcastle, and Nottingham building societies, which have jointly pledged a multi-million-pound compensation scheme. The initiative aims to fully reimburse PTC victims for lost savings investments and contribute to property title restoration costs. The Building Societies Association (BSA) has welcomed this move and remains committed to supporting its customers during challenging times.

Legal Ramifications

The PTC collapse has affected the victims and sparked a broader discussion on legal considerations. Victims of the scandal have raised valid concerns about the lack of regulation for trust management companies and are calling for stricter rules to protect consumers in the future. This incident has served as a wake-up call. It highlights the need for individuals to conduct thorough due diligence before entrusting their assets to third-party providers.

While the voluntary compensation scheme is a positive step, the long-term legal ramifications of the PTC collapse are yet to be fully understood. Affected individuals are still seeking legal recourse to recoup their losses. Importantly, this incident could serve as a catalyst for regulatory changes, potentially strengthening consumer protection within the trust management sector.

Our Advice

This case reminds us of the risks inherent in financial investments—even those as seemingly secure as trusts. It underscores the crucial role of professional advice and thorough research in making sound financial decisions.

It’s important to understand that misleading promises often persuade many people to choose schemes like PTC. Unscrupulous companies often tout trusts as solutions for asset protection, for example, against care home costs. Avoiding probate fees, safeguarding inheritances, and reducing inheritance tax (IHT) have also been added to the list.

If you’re considering a Trust or have been impacted by the Phillips Trust Corporation situation, our Private Client Team is here to help. We provide expert guidance on tailoring Trusts to your needs and navigating the processes. Get in touch with us today. We’re here to help.

Critical Steps for a Smooth Property Transaction

Buying or selling a house is a significant milestone filled with excitement. However, there are often potential legal complications with any property transaction. Luckily, there are steps you can take to smooth the process – whether you’re the buyer or the seller.

Critical Steps for a Seamless Deal

For Buyers

• With mortgage pre-approval, a process where a lender reviews your financial information and determines the maximum sum they would be willing to lend you, you can demonstrate your financial readiness to sellers and streamline the offer process. With rising interest rates, pre-approval strengthens your position as a buyer.
• Empower yourself by thoroughly understanding the market. Conducting comprehensive research on platforms like Rightmove and Zoopla will equip you to make informed offers and avoid overpaying.
• Choosing a reliable team for the transaction is invaluable, especially in a slower or more volatile A skilled agent and experienced property lawyer will ensure your interests are protected.

 For Sellers 

• Gather title deeds, surveys, and maintenance records to facilitate the buyer’s due diligence process. Delays here can frustrate potential buyers.
• Consult your estate agent to help set a realistic price that reflects current market conditions. Overpricing can lead to properties sitting on the market longer.
• Comply with disclosure requirements and be forthright about known property defects or potential issues. Hiding problems can lead to costly disputes later.

Offer, Negotiation, and Due Diligence

Buyers

• Make a clear offer that includes the purchase price, preferred completion date, and any specific requests. It is also important to include contingencies, which must be met for the sale to go through.
• Negotiate strategically, especially in a cooler market – you may have more negotiation power. However, balance your interests with the seller’s to reach a mutually beneficial agreement.
• Inspect thoroughly, engaging professional surveyors to examine the property’s condition. Talk to the seller about any significant issues you uncover.
• A title search will verify the seller’s ownership of the property and check for charges or encumbrances on the property.

Sellers

• Review all offers but prioritise buyers with solid financials and pre-approval. This will minimise delays.
• Clearly outline any amendments to the buyer’s offer or accept it as is.

Closing the Deal

Your lawyer will meticulously review all the documents ahead of completion, including title deeds, surveys, and maintenance records, to ensure your interests are properly protected and to facilitate the buyer’s due diligence process. This step is crucial as it helps identify any potential issues or liabilities associated with the property.

Factor the costs involved in buying or selling a property into your budget. These include mortgage or loan fees, valuation and surveyor’s fees, property tax (such as Stamp Duty Land Tax), estate agents fees, removal costs and legal fees. Property professionals such as solicitors and estate agents are legally and ethically obligated to provide clear and transparent information about service costs (upfront), including potential disbursements or additional charges. For example, disbursements could include fees for searches, land registry fees, and bank transfer fees.

Additional Tips for a Smooth Transaction

Ensure your voice is heard throughout the process. Prioritise clear and open communication, pay meticulous attention to detail and always read and understand all legal documents before signing.

Our Advice

In the UK’s property market, using a specialist lawyer to buy or sell a property is wise. The conveyancing process, which involves the legal transfer of property ownership, is complex and involves significant sums.

If you’re buying a property together, seeking professional advice early can save you time and money in the long run. Experienced lawyers handle title checks, contracts, and financial transfers, protecting clients from mistakes and future problems and relieving the stress of a tense situation.

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

Choosing the Right Executor

It’s Not Just About an Executor’s Skills

When you write a Will, selecting an executor is one of the most critical decisions. This person has the crucial responsibility of overseeing the administration of your estate after your death. While competence is essential, other qualities matter a great deal when choosing your executor.

What An Executor Does

Executors carry out the wishes expressed in your Will. Their duties can include:

• Locating and securing assets by identifying all accounts, real estate, valuables, etc.
• Managing liabilities. This includes paying outstanding bills and taxes and resolving any disputes with creditors.
• Distributing property and assets to beneficiaries under the terms in the Will.
• Legal and administrative tasks, including handling probate court proceedings and filing necessary legal documents.

Key Traits an Executor Needs

• An executor handles an individual’s assets, including property, so they must be trustworthy. Potentially, this involves large sums of money. Executors must be honest beyond question for the protection of the beneficiaries.
• The administration of an estate involves meticulous record-keeping, paperwork, and deadlines. So, an executor must be organised, detail-oriented, and able to manage a complex process.
• Being an executor is a time commitment. They must have the time and mental bandwidth to handle the added responsibilities on top of their own life.
• If the terms of the Will are complex or there is potential for family disagreement, the executor must remain emotionally detached and strictly follow the written wishes.

Choosing the Right Executor(s)

As you’d expect, there’s no one-size-fits-all solution, but common choices include:

• A family member or close friend. However, they need a suitable skill set, and there’s a chance that being an executor could strain relationships within your family circle.
• Professional executor(s). Lawyers, accountants, or banks provide the right expertise and neutrality. Professional executors charge fees but can save money in the long run by preventing costly legal errors and maximising tax efficiency.
• Co-executors. Appointing multiple executors can ensure a division of labour and a balance of skillsets. However, it would be best if you considered whether the executors can work effectively together. 

Important Considerations

• Your chosen executor(s) must be willing and prepared to accept the responsibility.
• Consider potential tensions or conflicts between executors and beneficiaries. A neutral (professional) person(s) might be better in certain situations.
• Consider the geography. If an executor lives far away, this can create unnecessary logistical difficulties.
• Choose someone young and healthy enough to see the process through. 

Our Advice

Choosing an executor is a decision as important as making the Will itself. It’s much more than merely finding someone wise or good with numbers. Choosing the right person ensures an estate is handled efficiently, an individual’s wishes are respected, and their beneficiaries avoid unnecessary conflicts.

For more information or advice about creating a Will, identifying suitable executors, or any other estate planning matter, please get in touch with us. Our specialist lawyers will work with you to understand your specific needs and goals, offering personalised advice to ensure your assets are distributed according to your wishes and your loved ones are protected.

Court of Appeal Finds No Undue Influence in Will Dispute

Inheriting after someone close to you has died can be a bittersweet experience. However, when the terms of a Will seem unfair or unexpected, suspicions of undue influence may arise. Undue influence is when someone pressures or manipulates the individual into making a Will and leaving their assets in a specific (often unexpected) way. However, a recent case, Rea v Rea, in which the Court of Appeal overturned a High Court decision, finding no undue influence happened, highlights how complex Will disputes can be. While challenging a Will on these grounds is possible, proving that undue pressure has been applied is invariably daunting.

Rea vs Rea 2024

Background

This case is a stark reminder of how difficult it is to establish undue influence. Anna Rea, a woman who had previously divided her estate equally among her four children in a 1986 will, left her house (most of her estate) to her daughter Rita in a new Will drafted in 2015. This significant departure from the previous Will sparked suspicion in Anna’s sons, Remo, Nino, and David. They argued that Rita, who lived closest to their mother and handled some of her financial affairs, had unduly influenced Anna into changing the Will, particularly given Anna’s advancing age and reliance on Rita for specific daily tasks.

Initial High Court Judgment

The sons presented evidence that Rita was heavily involved in arranging the drafting of the 2015 will. They also pointed to their mother’s declining health and suggested her mental capacity may have been compromised at the time the new Will was signed. However, the High Court initially sided with the sons, raising concerns about the lack of documented reasons for the significant change in beneficiaries and the potential for Rita’s influence to have been undue.

Court of Appeal February 2024

However, the Court of Appeal overturned the High Court’s decision. The appellate judges found that the sons hadn’t presented enough concrete evidence to prove coercion.  While the court acknowledged the close relationship between Rita and Anna, they also highlighted the presence of a solicitor during the drafting of the 2015 Will.  The solicitor testified that Anna appeared to understand the Will’s contents and made her decisions freely. Additionally, medical records indicated that Anna possessed the mental capacity when the Will was made.  Ultimately, the Court of Appeal concluded that the sons hadn’t met the burden of proof, and the 2015 will was deemed valid.

Comment

This case illustrates the complexity involved in undue influence claims. Although the sons presented a narrative suggesting potential manipulation, more was needed to overcome the presumption of a valid Will, especially with evidence of independent legal advice present. This case highlights the importance of considering the testator’s relationship with the beneficiary and the presence of safeguards like a solicitor’s involvement during the will-drafting process.

Critical Aspects of Proving Undue Influence

The Deceased’s Voice is Absent

Sadly, the person best placed to explain their intentions is no longer around. Establishing their true wishes and whether outside pressure has influenced their decisions is difficult.

The Burden of Proof

The person contesting the Will must provide evidence to convince the court that it’s more likely than not that the individual making the Will was pressured.

Coercion, not Persuasion

Undue influence goes beyond mere persuasion. It involves a degree of coercion or manipulation that overrides an individual’s own choice. Courts consider factors like the testator’s vulnerability, the beneficiary’s dominant position, and the unnatural nature of the Will’s provisions.

Independent Legal Advice

A Will drafted by a solicitor experienced in estate planning strengthens the case for validity.  The solicitor acts as an independent witness, ensuring the person making the Will understands its contents and makes decisions freely.

Our Advice

Proving undue influence can be complex. Evidence is often circumstantial, and the deceased can’t testify. While undue influence remains an option to challenge a Will, the bar for proving the case is exceptionally high—and costly! In Rea vs Rea, the judgment highlighted the concern that the legal costs could exhaust the entire estate, leaving nothing for the beneficiaries.

Our specialist lawyers have many years of experience advising clients about Wills, trusts, and probate, including inheritance disputes. If you are concerned about a loved one’s Will or need advice on any other matter, please get in touch with us today. We’re here to help.

Using Life Interest Trusts to Safeguard Your Legacy

Ensuring your wishes are carried out after you’re gone can be tricky, especially for blended families. But using life interest trusts can safeguard your legacy. So, consider them alongside other potential strategies, such as lifetime gifts, but seek professional advice to ensure the trust functions as intended.

Creating Life Interest Trusts

A life interest trust is a legal arrangement that can be set up in a Will to manage the distribution of assets after death. It allows a person to provide for someone (like a spouse or partner) during their lifetime while ensuring their assets eventually go to other beneficiaries they choose. One or more trusted individuals are appointed to manage the trust and ensure the terms are followed.

Benefits for Blended Families

The concept of ‘certainty of destination ‘ is particularly important in blended families, where children from a previous relationship may be involved. A life interest trust with ‘certainty of destination’ ensures that on the death of a spouse, a pre-determined share of the asset (typically half the house) goes directly to named beneficiaries (usually children), bypassing any new partners the spouse might have in the future.

Safeguarding Capital

Life can be unpredictable. A well-drafted trust can include a clause safeguarding the asset’s value. If your spouse needs long-term care, only the income generated (rent from the house) can be used for these costs. The remaining capital (the house value) stays untouched, ensuring your children’s inheritance remains secure.

Example: John’s Plan

John has children from a previous marriage and is married to Sarah. He wants Sarah to live in their house after he’s gone, but his children will eventually inherit half of it. Here’s how a life interest in his Will,  trust helps:

• Sarah (life tenant) has the right to live in the house for life.
• John’s children (remaindermen) inherit half the house after Sarah passes.
• “Certainty of destination” ensures this half goes to John’s children, regardless of Sarah’s future marital status.
• “Capital protection” guarantees the house value. If Sarah needs care, only rent income can be used, preserving the inheritance for John’s children.

Deprivation of Assets

Local authorities in England and Wales assess an individual’s ability to pay for care. When someone chooses to reduce their assets (money, property, etc.) to avoid having them included in a financial assessment, this is known as ‘deprivation of assets’.

If a local authority concludes someone deliberately reduced their assets to avoid fees, they may still calculate the fees as if the person still owned the assets. However, Local authority interpretations and rules often vary. They will consider the timing and motivation behind the actions, and with a clear beneficiary identified under a ‘certainty of destination clause’, they may be less likely to view the trust assets as readily available to fund care costs.

Our Advice

Life interest trusts can be valuable in estate planning, especially for blended families. However, proper legal guidance is crucial. Specialist lawyers will ensure the documents are drafted correctly, the full implications (such as inheritance tax) are explained, and the trust is tailored to you.

Our specialist team has extensive experience advising clients about making Wills and setting up trusts. For further information, advice, or an instant quotation, please contact us on 0115 964 7740.

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