The world's strangest laws

In France, it is forbidden to call a pig Napoleon!

Unmarried Couples

With the changes to Inheritance Tax leading most married couples to debate changing the provisions in their Wills (whether it be recommended or not) it is worth remembering the provisions relating to unmarried couples are completely different and that the new ‘sharing’ of nil rate bands DOES NOT apply.

It is essential that couples living together consider the financial implications of their circumstances. Partners need to consider carefully what arrangements they want to make regarding their home, its contents, the mortgage or rent and life assurance.

Partners should make such written arrangements and agreements as are necessary to define the position as clearly and accurately as possible. As part of this documentation it is essential that couples living together have Wills.

Areas for particular attention include:

1. A husband or wife who dies without a Will are intestate and the estate will be divided by the rules of intestacy. However, the survivor of an unmarried couple does not come within the intestacy rules and may be entirely dependant on the discretion of the Court for their protection.

2. Gifts between husband and wife during lifetime or on death are exempt without limit. The same exemption does not apply to unmarried couples. This can result in a significant inheritance tax liability on the separate deaths of the couple, and a sizeable reduction on the estate passing to surviving children.

3. The legal ownership of the home requires serious consideration so that an appropriate arrangement is made for the survivor’s continued occupation of the original property or alternative accommodation if the former is sold.

4. They must also consider guardianship for any children.

5. The remainder of the estate will also pass under the rules of intestacy meaning the survivor of the couple will inherit none of the personal chattels of the deceased.

6. Any court action taken by a survivor could be time consuming and stressful and there is no guarantee that the action will succeed.

“More and more people are living together either as man and wife (but not legally married) or as civil partners,” says Alan Porter of The Will Centre. “This can create real problems if a Will is not made to reflect their circumstances. We have seen instances at The Will Centre where real financial hardship has resulted because a Will has not been done. It’s such a shame when this happens as making a Will is not a difficult task.”

For further advice contact The Will Centre on 01752-607040 for details of how to avoid this avoidable situation.

Family Lawyers welcome Divorce Day

Every year UK family lawyers enjoy D Day (Divorce Day). This year it was on 7 Jan 2008. D Day is the day of the year where more divorces are expected to be filed than on any other day of the year.

The post-Christmas divorce boom, said leading family lawyers, comes as spouses begin the New Year with a fresh outlook. Christmas is a stressful time, and there is often too much alcohol. Then there are people who have been considering a divorce who will use Christmas as a time of reflection and January as a time to make hard decisions. Couples with children are more likely to wait for the end of the festive season before launching a petition.

If you decide to divorce your spouse (or civil partner) then they may still inherit from you while the divorce is going through! If you have an existing Will naming your spouse/civil partner then you need to change this immediately and not wait for the actual Decree Absolute to come through (this can take several years in some circumstances). Once the Decree Absolute is made your spouse/civil partner is treated as if they had died before you and cannot inherit from your Will. If you do not have a Will then your separated spouse/civil partner may inherit under the law of intestacy!

Alan Porter of The Will Centre says, “It is amazing that couples who split up do not even take the basic precaution of changing or making a new Will straight away. Most people split up because they have usually decided they don’t want to be with their previous partner any longer, yet they don’t take steps to make sure their assets go to their children instead or even their new partner. There have been instances where we have seen a separated partner inheriting from their previous partner and the deceased’s children losing everything.”

Call The Will Centre on 01752-607040 if you are subject to the D Day blues.

The danger of Home Made Wills!

There are two well known rules in this area of law. The first is that people who attempt to write their own Wills without obtaining professional advice are asking for trouble. The second is that a solicitor who acts for himself has a fool for a client. One solicitor who drafted his own Will provides a clear demonstration of both of these rules in practice!

In Anthony and another v Donges et al (Times July 22nd 1998) the testator (a solicitor) drafted his own Will in which he stipulated that his widow should receive:

‘such minimal part of the estate as she might be entitled to under English law for maintenance purposes’

The clause was clearly uncertain in its effect and suggested that the Court must decide the value that she was to receive. The only way of deciding the value of the gift was to make a formal application to the Court. An application was made but the judge refused to set the requested figure and declared the clause void for uncertainty. The judge stated that there was no way he could validly specify such an amount. He applied the rule in Re Hooker’s Settlement [1995] which prevents a judge being forced to become an arbitrator. Once it became clear that the Court was unable to set an amount, and there was no other way to establish the value of the inheritance, the clause was deemed as unenforceable. It was struck out and the Will was only effective in passing the residuary estate to the testator’s children.

The initial impact of this was that the widow received nothing however it was clear that she would be able to make an application under the Inheritance (Provision for Family and Dependents) Act 1975 and would receive a considerably greater share of the estate.

When drafting Wills issues such as this do arise, particularly where second marriages are bought into the equation. Clients can often be disappointed with the uncertainty and lack of freedom to make provisions in their Will that they wish to. This case certainly reinforces the need for clients to seek professional advice in making a Will….maybe this solicitor should have done the same.

The Will Centre offers a FREE ‘Home Made Will’ review service at its office. If you want to take advantage of this service then please telephone 01752-607040 to make an appointment.

Legal Battle Won to Inherit Farm!

A man won his legal battle to inherit a farm where he worked without pay for 25 years.

The 57 year old spent most of his adult life helping out on his cousin’s farm in Somerset. During that time he agreed not to take any wages on the understanding that he would inherit the land, which was worth £2 million, when his cousin died. A Will was made out to this effect but could not be found at the date of the death. In the absence of the Will other members of the deceased’s family claimed the estate. The case went to the High Court which recognised the man’s remarkable commitment to his cousin and awarded him the farm, the remainder of the estate going to other members of the family.

“Proper advice is needed when making a Will and also the Will needs to be kept securely”, said Alan Porter of The Will Centre. The anecdotal evidence of ‘lost’ Wills is legendary. “It seems crazy that people go to all that effort to make a Will and then leave it lying around! At The Will Centre we offer a storage facility for clients. Its better to be safe than sorry, besides by the time it becomes known that a Will is lost it’s far too late to make a new one!”

Thousands wasting almost £1 billion on Inheritance Tax (IHT)

Nearly £1 billion is being needlessly thrown away by individuals who fail to write life policies in trust. By writing such a policy in trust, where the proceeds of life insurance are excluded from the overall estate of the deceased, the IHT liability can be dramatically reduced. In addition, writing a policy in trust also ensures money is paid out quickly and to the right people. Otherwise, payouts will be subject to a lengthy delay, regardless of whether or not there is an IHT liability.

Any assets over the nil rate band (currently £300,000 for individuals or up to £600,000 for married couples and civil partnerships using the unused transferrable Nil Rate Band option) that are not in trust could be subject to IHT at 40%, the proceeds of which may have been immune from IHT if they had been held in a trust.

For example, take a married couple with £700,000 worth of assets, including a life insurance policy worth £400,000, which is not written in trust. On the first death, the assets would pass to the surviving spouse tax-free but on the second death, anything over £600,000 would be subject to IHT at 40% - the £100,000 above the threshold would be subject to a £40,000 IHT bill. However, if the policy had been written in trust, it is likely there would be nothing to pay.
Writing life polices in trust can be of considerable benefit to the person who is meant to benefit from the policy.

For a free financial review and advice on this please contact The Will Centre on 01752 607040.

HMRC expected to raise £3.89 billion from Inheritance Tax

The Treasury expect to bring in an extra £400million in Inheritance Tax (IHT) when compared to last year, according to figures released by the HM Revenue & Customs (HMRC). This is despite the recent proposed changes in IHT, whereby the unused portion of the Nil Rate Band (currently £300,000) can be transferred between spouses/civil partners. In total the Treasury is expected to receive £3.89 billion from the tax – an increase of 10 per cent on the last financial year, with the average family affected having to hand over £111,000.

For advice on how to reduce the amount of IHT payable, contact The Will Centre on 01752 607040.

Funny Wills . . .

Number 1:
An Irish Will: 'To my wife, I leave her lover, and the knowledge that I was not the fool she thought me; to my son I leave the pleasure of earning a living. For 20 years he thought the pleasure was mine; he was mistaken.'

Number 2:
Income from a cash bequest left to Jesus Christ should he make a second coming was handed to the Crown in 1997. The bequest, made by Ernest Digweed, stipulated that the income from his investments should be paid to the Crown after 21 years should the second coming not occur. The executors of the Will have three volumes of files containing many claims to the bequest. One of the most memorable was an American door to door salesman who felt he had a claim to the money since every time he knocked on someone’s door he was met by the phrase ‘Jesus Christ, not you again’!