Monthly Archives: July 2018

What now for the contestants of Love Island?

By | Divorce, Estate Planning, Trusts | No Comments

Last night’s final saw Jack Fincham a stationary sales man from Essex and his girlfriend Dani Dyer the daughter of TV ‘Hardman’ Danny Dyer leave Love Island with £50,000 in their bank and a romance which has had the public supporting since they coupled up on the first opportunity. They have moved on to become boyfriend and girlfriend and even have Jack offer Dani to come live with him once they have left the island (without asking his mum at the time).

Love Island for those who have not watched it is effectively Big Brother but about dating. The contestants varied from Alex a doctor from A&E to Hayley a model who thought that Brexit meant we wouldn’t have any trees left. The show is not without controversy with Ofcom receiving over 2500 complaints about how the show edited footage to cause drama in the villa.

The purpose of the show, aside from providing entertainment for the public, is to help the contestants find love. There are some very important things to know about relationships when considering wills and trusts and the effects that happen with relationships.

Not all the contestants found love and sadly, not all people in life will find ‘the one’. Two thing that can be guaranteed in life are death and taxes!

Jack and Dani were strong favourites to win after coupling up on the first opportunity and not looking back since. What is next for the couple? Ladbrookes are offering odds of 2/1 for them to get engaged this year. Last year’s contestants Jess and Dom after being swept up in romance got married live on Good Morning Britain not even a year after hooking up on the island.

With marriage comes complications and benefits from an inheritance point of view. If you were to have a will before then it would become invalid following a marriage. An advantage of marriage is the benefit of a dual inheritance tax allowance of £650,000 (provided they gift their estates to each other). With last years winner’s Kem and Amber, worth approximately £750,000 and £600,000 respectively, this could help keep the taxman away from their estate. With them both breaking up and not being married upon Kem’s death his estate will only benefit from a single tax allowance of £325,000. This would leave £425,000 which will be taxed at 40% which means his beneficiaries could miss out on £170,000.

If they were married and Amber was to die, then Kem would have received her estate of £600,000 tax free as they were married. The same rules also apply to civil partnerships.

With Jack and Dani having 1,600,000 and 2,100,000 Instagram followers each they are the couple of marketers dreams and will have a huge cash influx through promoting clothes, health and lifestyle products and maybe even pens in Jack’s case. This, alongside all of the paid work on TV and in local venues, will have the couple worth more then they could have possibly imagined. There are many trusts that the couple could look into putting their assets in for a wide range of circumstances, including tax planning and unscrupulous beneficiaries. It doesn’t matter on the size of your estate, or what you have. Everything you own has some value and making sure that upon death it goes to the right person is something that you should think about. With the tragic death of Sophie Gradon from Season 2 it shows that even the young are in need of a will or trust.

After death a Will or a trust can ensure that your assets go to who you want them to, with the vast majority of the couples from Love Island breaking up it shows that relationships change, and your will or trust should change to suit your relationships at the time of your death.

If you want any more information on how you can protect your assets and ensure it goes to who you want it to give the SWW Trust Corporation a call on 01522 581 570 for a free confidential chat.

The Grant Application

By | Estate Administration, Registering land | No Comments

Once you have all valuations for the assets and liabilities in the estate as at the date of death, you have everything you need to begin putting together the application to obtain the Grant of Probate or Grant of Letters of Administration.

The Grant of Probate or Grant of Letters of Administration (collectively known as Grant of Representation) is the legal document issued by the Court (Probate Registry) providing the Executors, Administrators or Personal Representatives of the estate with the legal authority to deal with the deceased’s estate.

A Grant is not always required and there are some instances where the administration of an estate can be carried out without obtaining a Grant. For example:

  • Where a property is held in joint names (joint tenants) and passes by survivorship to the other joint owner(s)
  • Where there are joint bank accounts and only a death certificate is required in order to have the deceased’s name removed from the account and transferred into the survivors sole name
  • Where the amount in any solely held bank accounts is small (banks and building societies have limits as to the value of assets that they will release without seeing a Grant)

There is a common misconception that you if you have a Will, a Grant of Probate will not be required, which is certainly not the case. The need for a Grant is dependent upon the types of assets in the estate and the value of those assets.

Where there is any property owned solely by the deceased or where they own a specified share in a property (as tenants in common), then a Grant will always be required in order to sell or transfer that property/share of that property

What does being a Trustee involve?

By | Estate Administration, Trustees and Executors | No Comments

Because trust funds do not belong to the Trustees personally, as they are holding the funds for the beneficiaries, the law places heavy duties and a high standard of care upon Trustees. Being a trustee is not a responsibility that you should take lightly as there is a lot you need to know as well as a lot that you have to do to fulfil your responsibilities

In many ways the duties on Trustees are onerous and a lay person should give careful consideration to accepting an appointment as a Trustee.

The principal duties of a Trustee are as follows:

• To take reasonable care in exercising their powers as a Trustee. The main duty is contained in Section 1 of the Trustee Act 2000

• To read and understand the trust instrument (i.e. the settlement or Will setting up the trust).

• To act fairly between beneficiaries e.g. In the case of a life interest trust, the trustees should strike a fair balance between immediate income return for the life tenant and capital growth for the beneficiaries after the life tenant’s death. In the case of a discretionary trust, the Trustees must fairly consider the interests of the beneficiaries and make a decision on reasoned grounds. Their decision must not be bought about through malice or discrimination against any one particular beneficiary.

• To comply with the terms of the trust: the Trustees will be liable for breach of trust if they do not comply with express terms of the trust and the law relating to the trust. The beneficiaries may be able to take the Trustees to Court for compensation for a breach.

• To provide information and accounts to the beneficiaries on request.

• To act unanimously unless there is an express power in the trust instrument for decisions to be reached by majority.

• To act without reward: the general rule is that a Trustee cannot charge for his services, unless they are a professional Trustee.

• Not to make a secret profit from the trust e.g. by supplying goods or services to the trust through the Trustee’s own business.

If you want more information about Trusts and how the SWW Trust Corporation can help you then call 01522 581 570 to speak to one of our experts or email [email protected]

Severance of Tenancy

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Remember to Sever the Tenancy

Property Trusts and more specifically Life Interest Trusts are one of the more common type of trust put into a modern day Will. There is really no doubt that having a property trust in your Will is an extremely useful provision. Whilst the Trust ensures that your spouse can remain living in your home and receive any income once you pass away, it also ensures that your property is protected for your children for the future.

There are important things to remember when drafting a Will to include a Property Trust, which are crucial further on down the line. Namely, where there is a Property Trust included, a Severance of Tenancy will also need to be carried out, or the Trust will not take effect when you die and when your Will eventually comes into force.

Why is this?

Put simply, there are ultimately two ways of owning property, Tenants in Common and Joint Tenants. Most properties are owned as Joint Tenants initially, however, in order to set up this trust a property must be owed as Tenants In Common, which means that both parties own defined 50/50 shares in the property. Where a property is owned as Joint Tenants, there are no defined shares and subsequently, upon the death of one of the joint owners, the whole property automatically passes to the survivor by survivorship. Alternatively, with Tenants in Common, as both parties own defined 50/50 shares in the property, each may gift their share however they wish and leave instructions in their Will to that effect.

Where do the problems lie?

It is far more frequent that you may think, to reach the administration process once the first spouse passes away, with a Life Interest Trust in their Will, but to find that the tenancy was never severed, ultimately meaning that the Trust will fail.

There are ways of remedying the mistake, by way of Retrospective Severance, which is effectively a Deed of Variation treating the property as though it had been severed in the first place. However, this can be costly and of course incurs unnecessary costs from your estate.

It is also a frequent occurrence whereby a Will is drafted to include a Life Interest Trust and the tenancy is correctly severed at the time, but the parties then move to a new property and do not make a point of having the new property owned by way of Tenants in Common, rather than the more common Joint Tenants.

Ultimately, it is important to make sure that the correct provisions are in place whilst you are alive, in order to avoid extra costs and unnecessary action during the administration process when you die.

For further information on property ownership and severance of tenancy, you can visit the Government website by using the following link:

https://www.gov.uk/joint-property-ownership/change-from-joint-tenants-to-tenants-in-common

Distribution of the Estate

By | Estate Administration, Estate Planning, Gifts | No Comments

Distribution of the estate

Once you have collected in all estate assets and settled the estates tax affairs and any outstanding liabilities or disbursements, you will then be able to begin distributing the estate in accordance with the terms of the Will, or in line with the Rules of Intestacy.

Distribution of any estate assets should not be made prior to the expiry of the Statutory Notice to Claimants. This is where a notice is placed into the London Gazette and into a local newspaper and lasts for a period of 60 days. The purpose of this is to give any claimants or creditors 60 days to make a claim against the estate, after which time the estate will have some protection against any claims that may arise in the future. It is not recommended that the estate is distributed or finalised until after this 60-day period expires as it will protect the Executors/Administrators from any liability in the future.

Before any distributions are made, it is also recommended that you obtain identification for each beneficiary (generally photographic ID and proof of address will suffice), so that you can confirm and prove that each beneficiary is exactly the individual referred to under the Will or entitled under intestacy.

  • This is particularly important where any beneficiaries are referred to by ‘nicknames’ under the Will or where beneficiaries have become married, meaning that their name will differ from that in the Will.
  • This will avoid any uncertainty and will prevent distributions being made to the wrong individuals, as the Executor/Administrator will ultimately be liable should this be the case.

Any specific gifts or pecuniary legacies set out in the Will should be distributed first.

  • It is recommended that any payments of pecuniary legacies to any beneficiaries should be made by either cheque or bank transfer. This is because these are both traceable and can be referred to and proven at a later date should any queries arise.
  • You should ideally get some form of receipt from each beneficiary to confirm that each has received their correct entitlement from the estate.
  • If there are any gifts or legacies due to a beneficiary who is a minor it is sometimes possible to pay their legacy to their parent or guardian, who can provide receipt on their behalf, depending on the wording of the Will. Alternatively, where this is not possible, funds will need to be held upon Trust for any minors until they are old enough to provide valid receipt.

At this point, any property that has not already been sold, or any property specifically gifted in the Will, can be transferred into the name of the beneficiaries.

  • It is recommended that you seek assistance from a professional to transfer any property to any beneficiaries.

If there is direction in the Will that assets should be held in Trust, then you will need to arrange for the assets to be transferred to the control of the Trustees and execute the relevant documents to reflect this.

  • Unfortunately, the drafting and setting up of any Trusts is a reserved activity and you will need to contact a professional for advice and services in respect of this.

Finally, before any distributions are made to any residuary beneficiaries, you should put together estate accounts.

  • The estate accounts should outline all assets and liabilities in the estate, along with any payments that have been received or payments made, during the course of the estate administration
  • The accounts are required so that each residuary beneficiary may see the exact extent of their entitlement from the estate
  • Once completed, each residuary beneficiary and any other Executors should receive a copy of the accounts and approve them (it is advisable for each beneficiary to provide you with their written approval of the accounts).
  • Only when the accounts have been approved should you make any final distributions to the residuary beneficiaries. Again, you should ensure that you distribute any funds by way of a cheque or bank transfer so that any payments are traceable, and you should obtain a receipt from each beneficiary to confirm that they have each received their correct entitlement under the estate.

Once all distributions have been made and all matters have been finalised for the estate, you should ensure that all documentation and paperwork in relation to the administration is kept in a safe and secure place.

In line with the General Data Protection Regulation (‘GDPR’) all sensitive personal data relating to beneficiaries or any other living people which may be held on file, should be securely destroyed or deleted if there is no longer a justifiable reason for retaining it.

It is advisable not to destroy any original documentation as it may be that you will need to refer back to the paperwork in the future. It is good practice for Professional companies and legal bodies to keep and store files and paperwork for a minimum period of 7 years, in line with HMRC guidelines, so this may be something to consider.

If you have any questions or would like more information please call 01522 580571 to speak to one of our experts

Why Work With the SWW Trust Corporation?

By | Estate Administration, Estate Planning, Probate, Professional Trustee, Trustees and Executors, Trusts | No Comments

It is important to know what the benefits of working with the SWW Trust Corporation are.  There are significant benefits of choosing to work with us as you will see in this article.

We can help with the creation of the trust and liaise with the settlor to ensure that appropriate powers and duties are given to the Trustees, and register the trust with Inland Revenue & Customs Forms. We can help with the ongoing administration of trusts, including preparing annual accounts and completing the yearly tax return as well as the 10-year anniversary return. We can also put you in touch with independent financial advisors with experience of advising on trust investments.

We can advise Trustee on their powers and duties under the trust instrument or under statute. We can act as Professional Trustees and relieve you of the risk the role entails, and we can help bring trusts to an end when required because our business is built exclusively on providing Trustee and Executor services, you’ll get the very best service and advice available. Unlike solicitors or banks, we are specialists not generalists. Because this is all we do you can be assured you are receiving the highest level of service available.

Executorship in particular can involve a great deal of time, effort, stress and even financial costs. All of which can be overwhelming for an individual. You can place your trust and confidence in the SWW Trust Corporation. From the very first phone call our advisors are specially trained to be professional but empathetic with your circumstances. You will be allocated a personal estate manager who will work closely with you and your family throughout the process who will ensure you receive the service that suits you.

As a corporation, we will always be on hand to offer our services as an Executor or maintain the integrity of a Trust throughout its lifetime. No private individual can offer the same perpetual service. Choosing a close friend or family member as an Executor or Trustee runs the risk of subjectivity and opinion creeping in. By appointing an impartial body like The SWW Trust Corporation you can avoid any possible conflict of interests.

For all of this and peace of mind the SWW Trust Corporation can make your life easier while taking care of all the legalities in which we specialise with compassion and professionalism.

Failure of Gifts: Abatement and Ademption

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When making a Will, there are various types of gifts that a testator may wish to include: general, specific and demonstrative legacies. Before considering the effect of failure of gifts in a Will, it is important to identify each of the types of legacy available to a testator.

A general legacy, as the name suggests, comes out of the testator’s estate generally, and does not specify a particular item or class. This includes pecuniary legacies – general gift of funds from an estate “I gift the sum of £500.00”. By comparison, a specific legacy identifies a particular item “my Rolex watch”. Finally, a demonstrative legacy outlines a specific fund out of which the gift is to be made “I give £1,000 from my Lloyds Bank ISA”.

Quite often a significant amount of time passes by from a Will being written to the death of the testator and circumstances can change meaning that the testator’s estate is vastly different upon death. On some occasions, assets referred to in a Will may no longer exist or be owned by the testator, or the estate may have insufficient funds in which to settle all legacies in full. This will result in the failure of the gift by either Abatement or Ademption

Abatement

Abatement is the rule which applies where the testator’s estate is solvent, but unable to satisfy all legacies in full following the payment of any tax and administration expenses. As a result, the gifts in the Will are reduced in a certain order depending on the nature of the estate.

The order in which legacies in an estate abate are as follows:

  • The residuary estate abates first as this is everything remaining after the payment of all other legacies, tax and administration expenses
  • General legacies abate next, which usually means pecuniary legacies but also any demonstrative legacies where the designated fund has ceased to exist (as above, should the Lloyds Bank ISA no longer exist at the date of death)
  • Specific and demonstrative legacies abate last and all in proportion to one another

It is important to note that the order of Abatement is subject to any contrary intention by the testator in the Will.

Ademption

Ademption applies where the subject matter of the gift no longer exists at the date of the testator’s death. Any disposal of an intended gift – sale, loss or destruction will result in ademption.

The intended beneficiary of a gift which fails by ademption will have no automatic right to any cash equivalent where the subject matter was sold by the testator, or proceeds of an insurance claim if the asset was destroyed, unless there is an express provision by the testator in the Will.

The issues of Abatement and Ademption can provide complicated and frustrating for both Executors and Beneficiaries of an estate upon administration. The likelihood of any gifts failing by either Abatement of Ademption can be reduced greatly or avoided altogether by regular review and update of your Will to ensure that it accurately reflects your estate.

Who are your beneficiaries?

By | Attorneyship, Missing Will, Probate, Trusts | No Comments

It is extremely important that any named beneficiaries in a Will can be easily identified. An Executor must be able to say with certainty that an individual either is or is not a beneficiary under that Will. There are many things that you can do to assist your Executors and make your beneficiaries as identifiable as possible: 

  • Include each the full name of each beneficiary and where possible, their relationship to you as the Testator. Simply gifting “£1,000 to John Smith” with no explanation or obvious link to you as the Testator is not sufficient and will make it extremely difficult for the Executor(s) to identify a beneficiary when dealing with the estate.
  • Any names by which the beneficiary is also known may also be included “my friend John Smith, also known as “Jonny”.
  • Full addresses of each beneficiary should be included. Even where beneficiaries have moved after the Execution of the Will and where the address in the Will has not been updated to reflect this, it will provide useful as one of their last known addresses – any address is better than no address in helping to track down an individual.
  • Think about including a list of addresses to be stored with your Will – this will assist the Executors when required to contact beneficiaries.

There is no legal requirement to include specific details of individual beneficiaries in a Will, however, these will prove useful when contacting beneficiaries during the administration process once the Testator has passed away.

You should always bear in mind that ultimately, where there is uncertainty of who a legacy or gift is intended for in a Will, then that gift shall fail. It will then subsequently either fall to an alternative beneficiary, fall to residue, or in severe cases, mean that the estate is partially intestate.

What is a Grant of Representation?

By | Estate Administration, Probate | No Comments

Many people are familiar with the idea of the administration or probate process; however, most do not actually know what a Grant of Representation is, or that there are different types.

Ultimately, the Grant of Representation is a document sealed and issued by the Court, which provides the Executors or Administrators of an estate with legal authority to access, collect in and distribute the deceased’s assets.

Before issuing the Grant, the Court will look at two elements:

  • Whether or not there is any document which can be considered a testamentary document, capable of being admitted to probate or annexed to a Grant of Administration; and
  •  Who is entitled to a Grant of Representation of the deceased’s estate (regardless of whether there is any testamentary document).

Once issued, the Grant is effectively conclusive evidence of the terms of any Will and its execution, or that the deceased died without a valid Will. It is also confirms the authority of the Executors/Administrators to act.

There are also different types of Grant of Representation:

Grant of Probate

A Grant of Probate is issued only to an Executor appointed by a Will or codicil. Up to four executors can be named on a Grant of Probate and if there are more than this, power will be reserved to them. Any of the executors named in the Will are authorised to take out the Grant of Probate and deal with the administration of a deceased’s estate.

Grant of Letters of Administration with Will Annexed

This is issued under circumstances where the Executors of a Will appoint someone else to apply for Grant and deal with the estate on their behalf, because they cannot or do not wish to deal with the administration for any reason. A Grant of Probate cannot be issued because the appointed Executors under the Will are not the people applying for the Grant. In this instance, a Grant of Letters of Administration is issued with a copy of the Will annexed. This may also apply where the appointed Executors are minors and require someone else to apply for a Grant on their behalf.

Grant of Letters of Administration

A Grant of Letters of Administration is issued when there is no Will available or capable of being admitted to proof and the deceased therefore died intestate. The order of entitlement to apply for the Grant in these circumstances follows the same order of entitlement as under the rules of intestacy. A personal representative can be appointed to act on behalf of the beneficiaries, however, all of the entitled beneficiaries must generally consent to that person applying for a Grant.

 Generally, a Grant is required before any estate can be dealt with after death, however, there are some circumstances where a Grant may not be required. For instance, there is no need to obtain a Grant where any property is owned as joint tenants and will pass to a spouse or joint owner automatically by survivorship. When some liquid assets held, i.e. bank accounts, investments or policies, are below a specific value then there may also be no need to obtain a Grant. Some banks will release funds in an account up to the value of £50,000; on the other hand, some banks have a lower limit and anything above this means that they require sight of a Grant before they will release funds. This is, of course, purely at the discretion of the individual institution. There is also a common misconception that if you have a valid Will then there is no need for a Grant to be obtained. However, the need to obtain a Grant is ultimately dependent on the assets held by the deceased and the value of those assets, regardless of whether there is a Will or not.

What could be worse than losing a World Cup Semi-Final?

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England went out in dramatic fashion last night. The whole country was gripped watching Gareth Southgate’s young England team seek out a first World Cup final since we won it 52 years ago in 1966. Unfortunately, the adventure has come to an end. Millions of people felt devastated as Mario Mandžukić scored in extra time to end the dream of football coming home in 2018. There were scenes all around the country of people with their heads in the hands while some cried and others sat on their own reflecting on what could have been.

In life there are situations that far exceed the emotions felt when losing football and that is losing a loved one. To lose someone close to you is one of, if not the worst, feelings any person can endure. In times of grieving, emotions are high and no one, no matter what, can be fully prepared to face this heart-breaking ordeal.

What follows death can be a complex maze of legal and administrative processes, such as dealing with property, financial institutions and tax affairs whilst simultaneously taking into consideration the wishes of the deceased. All of this can be incredibly overwhelming and can seem to be impossible to handle with in a time of distress. This is something that people should not have to go through alone.

By instructing the SWW Trust Corporation you can have peace of mind knowing that you have an expert to guide you through each step of the process and ease the burden that comes with being an Executor, which is a position of great responsibility for anyone faced with this unfortunate task.

The SWW Trust Corporation work professionally and with compassion. We understand that no estate is the same and that behind all the work and legalities there are grieving families and friends. As a regulated, insured and audited company we ensure that everyone we work with has peace of mind when it comes to the final wishes of the deceased.

For more information on how we can help you call 01522 581570 or visit our website www.swwtrust.co.uk