Secure Your Family's Future: Understanding Wills, Taxes, and Options Planning

In this edition, we’re focusing our attention on our private client practice, busting some common myths around wills, navigating digital assets, understanding LPAs, and sharing some essential tax and probate advice.

We’ll also introduce you to Harriet Atkinson, who leads our private client practice and our new joiner, Ann Robson…??

Wills: why you need one and when to update it

Recent global events have focused people’s minds on ensuring their personal affairs are in order.? For many, this has led to them putting in place a will so they can ensure that their estates pass, as they would want, to their loved ones should something unforeseeable happen.?

However, there are still a lot of people, at all stages of life, who have yet to put in place a will, or think that it isn’t necessary because all their assets will simply pass to their spouse, or partner, on their death.? For those without a will, their estates will be governed by the Intestacy Rules which, for many, will not be in line with their wishes for the distribution and division of their estates.? Relying on the Intestacy Rules, or failing to take advice about their operation, can cause huge legal and tax issues for the families left behind.??

There are a number of misconceptions surrounding intestacy.? The principal ones are:

If you’re married, everything goes to your spouse.

This is not the case if your estate is worth more than ￡270,000 and you have children, as in those circumstances, a share will pass to your children.? This is not inheritance tax efficient (as the children, unlike a spouse, will not enjoy spouse exemption from inheritance tax), and if the children are minors, it means their share of the estate will be ring-fenced in trust (and therefore out of reach of the surviving spouse) until they reach 18.

If you’re unmarried, your partner will still inherit part of your estate.

Under the Intestacy Rules, cohabitees do not benefit.? A cohabitee who is not provided for on the death of their partner would need to bring a claim against the estate for provision.? This can be expensive, and the provision awarded to the cohabitee would be at the discretion of the Court.??

Foreign assets

Foreign assets may not be governed by the UK Intestacy Rules and require specialist advice/arrangements.

A will enables you to ensure that your estate passes as you would wish and in the most inheritance tax-efficient way.? It also lets you choose appropriate people as your executors and guardians of minor children.

Even if you have an existing will, it is sensible to review this every few years.? Life events such as having a child, getting divorced or acquiring wealth can result in the need to update your will.? If you marry, then your will is automatically revoked.

For a person with seemingly straightforward affairs, they might consider a DIY, or ‘off the shelf’ will.? These tend to be basic and drafted to fit a wide range of circumstances, and testators, and often lead to unexpected consequences or a will which is not valid.??

There is no substitute for taking bespoke advice to ensure that your family and financial circumstances are considered, and your will is appropriate for your situation.? Wills which are professionally drafted are rarely the same as each clients’ needs are different, and their wills reflect this.? At Bellevue Law, our cornerstone values, which have remained untouched since our founder, Florence Brocklesby, started the firm back in 2014 are to provide the highest level of client service and tailored advice based on an individual's circumstances. So if you haven’t yet written your will, or feel it is time to update your existing will, then please get in touch.

Making room for digital assets?

Cryptocurrencies have received much media attention in recent years, and the industry is now more aware of the need to consider succession to these form part of a person’s estate planning.? However, whilst most people don’t have non-fungible tokens or cryptocurrencies, most do hold ‘everyday’ digital assets, such as emails or social media accounts, and how these should also be dealt with as part of a person’s succession planning.? Digital assets inventories and legacy contacts are now often completed as part of the estate planning process and kept (securely) with a person’s will.

Understanding when you need a Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is a powerful legal document that gives a named individual the power to make financial or health and welfare decisions on another person’s behalf in the event that the latter becomes mentally incapacitated due to age, illness or injury.

So when do you need an LPA, and what form do LPAs take??

Drawing up an LPA is a good idea, even if you have no reason to believe that you will be mentally incapacitated in the near or medium-term future. Much like a will, it can provide peace of mind to know that, should anything happen to you, your affairs will be placed in the hands of one or more trusted individuals whom you can rely on to make decisions on your behalf and in your own best interests.

In addition to personal LPAs, there has been a steep rise in the popularity of business LPAs since the pandemic – this reflects the greater awareness among younger people, in particular, of the potential for incapacity and the impact that could have on business and personal affairs. The practical benefit of a business LPA is that it enables a business’s continuity, taking care of the company’s ability to pay staff, complete transactions and settle tax. But crucially, it will also help to safeguard a business if the owner loses mental capacity.

So whether you are seeking reassurance in terms of your personal affairs, or wish to safeguard the future of your business, an LPA may well be a sensible part of the estate planning process..

Tax and probate advice

Below, we share key information regarding inheritance tax, capital gains tax and the probate process.

Inheritance tax: affecting more ordinary people than ever before

Recently, HM Revenue & Customs (HMRC) reported that 41,000 people were liable to paying inheritance tax (IHT) in the 2022/23 financial year. This has soared 24% compared to 33,000 people the previous year, and is now the highest figure in 20 years.

With more and more ordinary people now affected by inheritance tax, and many estates now potentially taxable, it’s really important to get the right advice on structuring your finances as efficiently as possible.

Proper planning can help you understand the process, and structure your affairs in the most tax efficient way.?

Capital gains tax: how can you benefit?

The expected changes to capital gains tax didn’t happen in the Spring Budget and capital gains tax (CGT) rates are still lower than income tax rates (currently 28% for disposals of property; 20% for other disposals) so it’s important to think about CGT as a planning tool and take advice when disposals are made. For our clients, this is often when they sell a business when Business Asset Disposal Relief (formerly known as Entrepreneurs’ Relief) can help to reduce CGT to 10% on all gains on qualifying assets, subject to a ￡1m lifetime allowance.

Can I get emergency funds in probate delays?

The Probate Registry is currently operating extremely slowly with Grants of Probate taking around 4 months to be issued.? However, where there is an urgent need for a Grant to protect or preserve the estate until the full Grant of Probate is issued, you can apply for an interim Grant of Probate (called a grant ad colligenda bona) to do a specific act.

When and why would you need to use this? You might need a grant ad colligenda bona:

• If someone dies after they’ve exchanged contracts to sell a house and the sale needs to complete;
• If a business needs to be sold quickly before it depreciates in value;?
• Where an asset requires funds for its repair.

For advice on any and all matters relating to tax and probate, please do not hesitate to contact us.

Meet Harriet, our private client and tax work expert?

Harriet Atkinson specialises in private client and tax work with particular expertise in probate and the administration of estates. Harriet trained at leading London law firm Forsters LLP. She qualified into their private client department in 2005 and was head of the firm’s probate team before joining Bellevue Law.?

Harriet advises individuals and their families on a wide variety of private client matters including all aspects of probate, succession and tax planning, wills, trusts and powers of attorney. In the probate field, she has extensive experience of dealing with a range of estates, and is equally comfortable helping local families who need support administering estates at a difficult time and managing complex, high value and multi-jurisdictional estates.

"Harriet strikes just the right balance between efficiency and effectiveness on the one hand, and friendly and helpful on the other hand.? Professional with humanity and empathy."

Welcome to our new starter

We are pleased to announce that the Bellevue Law team has grown again! Welcome Ann Robson .

Ann is a senior employment lawyer with significant experience advising both employers and employees. Her expertise is extensive, covering every angle of employment law for clients in a range of different industries to include banking and insurance, technology, retail, professional services and media.

Ann is known for her commerciality and ability to provide clear, concise, solution based advice tailored to each client's specific needs. She is a skilled negotiator and litigator with extensive experience representing clients in the high court, county court, employment tribunal and appeal court proceedings, having started her career as a commercial litigator.??