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Digital Assets And Your Will

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Most people are aware of the importance of making a Will to deal with physical assets. Relatively few of us, however, have probably considered what will become of our digital assets when we die.

What is a digital asset?

A digital asset is one that requires a password and username to access. For example, digitally-stored music collections, social networking sites, and online investment and banking accounts.

What to do?

It may be that dealing with your digital estate is as simple as updating your Will to include a digital assets clause. Thereafter, you should note down your passwords for safekeeping. If your Will is being held by Solicitors, it may be a sensible idea for you to provide them with a copy of this information that will be stored confidentially beside your Will. This is particularly useful if you have also appointed Solicitors as your executors.

Failure to plan for digital inheritance can cause problems as without usernames and passwords it can be very difficult for executors to access web domains, social networking sites and other online accounts. As the executors’ duty is to gather in and administer all of the assets of a deceased’s estate, it is important that they are armed with the necessary information to enable them to do so.

The challenge is therefore to keep the information up-to-date and hidden yet accessible when the time comes.  It is important to remember that you should not include details of your web-based accounts, passwords and user names in your Will. This is because a Will, once proved, becomes a document of public record and therefore potentially accessible by fraudsters.

For more information, please contact us for expert and friendly advice.

Living Wills, Advanced Decisions, Capacity and Care

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There is still a grey area in the UK with regards to Living Wills. These are non-binding documents and a person can put whatever they want in them. They can detail what care they would want if they were to become mentally incapable and can also include religious beliefs, what type of personal care they would want, and the people they would want to look after them.

Quite often, a copy of a Living Will is placed with an ordinary Will and also with the person’s GP. If there is a Living Will in place then any medical team should take it into account even though it is not legally binding.

An alternative would be to make a document called an “Advanced Decision” or an “Advanced Directive”. These documents must be written and signed and witnessed. They can contain instructions to refuse treatment. When making such a document, the person needs to be fully compos mentis and clear as to what they wish to achieve from the document. For example, it may say that the person would wish to refuse pain relief, interventions, needles etc. However, one should bear in mind that specific treatment cannot be requested and it is not possible to override a medical professional’s opinion.

Under Section 24-26 of the Mental Capacity Act 2005, Advanced Decisions can only refuse treatment. One of the criteria provides that no illegal actions, for example attempted or assisted suicide, can be included in the document. Understandably, it is illegal to assist anybody with suicide and if a person is believed to have encouraged or assisted another, then it is a crime and subject to 14 years imprisonment. Prosecution is more likely if a person is under the age of 18 years or if the assister has been paid.

An Advanced Care Plan is a central record of documents usually put into place by a hospital or care home. These are often put in place for a person who is terminally ill.

Palliative Care is for quality of life and life threatening illnesses. Again, these Plans can be put into place for end of life care or if a person is likely to die within 12 months of being diagnosed.

Whichever Plan is put into place, care should be taken when writing them. For example, a person may say that if they are diagnosed with Cancer he/she does not want to be treated. At the time of writing the Plan the person may not have Cancer but, say, in 5 years time, he/she has developed Cancer and has since married and has children, then these are totally different circumstances and he/she may not have the mental capacity to change the original Plan. Therefore, Living Wills or Advanced Decisions should be reviewed every few years to reflect circumstances and medical views.

A Lasting Power of Attorney for Health and Welfare is more flexible for planning and may be a better way of expressing wishes should a person become mentally incapable although, again, care must be taken as to the instructions contained in the document.

If a person lacks mental capacity and there is no Lasting Power of Attorney for Health and Welfare in place, then it may be possible to approach the Court of Protection for a Deputyship Order. However, the Court of Protection are reluctant to grant these types of Orders and may only do so when a series of decisions need to be made and it is the only way they can be dealt with.

For legal advice in completing Lasting Powers of Attorney for Health and Welfare or for Deputyship Orders, please contact one of the Private Client Department team at Adams Harrison.

Make a Will or Review your Existing Will

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A Will is a legal document confirming how you wish your assets (your estate) to be dealt with following death.

Every adult who owns assets should make a Will rather than rely on the Intestacy Rules (statutory provisions) where there is no Will.

What is worse than not making a Will? Leaving an out of date or incorrectly drawn up Will.

Even if you have already made a Will, this ought to be reviewed periodically and in particular if you or your family’s circumstances have changed and following new legislation.

Have you married since making your Will? Marriage automatically revokes a Will made prior to the marriage unless it has been made in contemplation of, but not conditional upon, the marriage taking place.

Have you separated or divorced since your Will was made? A review would be advisable.

Have you had children since you made your last Will? Or perhaps you have subsequently become involved in a business which should be catered for separately in your Will.

Do you need to consider the joint ownership of any freehold or leasehold properties? Do you own as joint tenants or tenants in common and what is the difference?

Would a review of your Will ensure your property could be safeguarded against possible future nursing home fees of a surviving spouse?

Furthermore, there are Inheritance Tax considerations insofar as there is a new Residence Nil Rate Band that may be applicable to your estate and might require a review of the terms of your existing Will to fully utilise this new exemption.

If you require advice in relation to making a Will or reviewing the terms of your Will, contact a member of Adams Harrison’s Private Client Department for expert and professional advice.

 

Melanie Pratlett

Partner

Head of Private Client Department

What Is A Deed Of Variation?

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You may be surprised to learn that it is possible to alter someone’s Will after their death, providing that any beneficiaries left worse off by the changes agree. The changes can be made by what is known as a deed of variation.

If someone dies intestate (without a Will) then the intestacy rules govern who inherits. A deed of variation can also be used to change the inheritance in the same way as if there was a Will.

There are various reasons why it may be a sensible idea to change a Will or redirect inheritance under the intestacy rules. These include:-

  • to reduce the amount of Inheritance tax (IHT) or Capital Gains Tax (CGT) payable
  • to provide for someone who was left out of the Will
  • to move the deceased’s assets into a Trust
  • to clear up any uncertainty over the Will

Deeds of variation are a useful inheritance tax (IHT) planning tool because any inheritance from an estate that is redirected to others will be treated as if the deceased made the gift. This means that the person allowing the redirection does not have to survive the gift by seven years in order for it to fall outside of their own estate and therefore not be subject to IHT. A common example would be a child who is to inherit from their parent’s estate. If the child is already financially sound then they may not require the inheritance which would only increase the size of their estate, giving rise to further IHT charges on their own death. In this situation, the child may wish to redirect the inheritance to their own children who could benefit from the money.

A deed of variation could also be used to alter the division of a Will to benefit a charity. Making such a change could potentially attract a lower 36% rate of IHT of the estate that is chargeable which would reduce the IHT bill.

It is important to know that a deed of variation must be made within two years of the date of death. Furthermore, once a deed of variation is signed it cannot be revoked so it is paramount that careful consideration is taken before entering into a deed of variation.

For more information, please contact our Private Client department for expert and professional advice regarding wills and probate issues.

Hayley Ford, Private Client Solicitor

Intestacy. What Happens If You Die Without Making A Will?

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It is incredibly important to make a Will to ensure that your estate passes as you intend.

In England and Wales, there is a statutory set of rules which apply if you die without leaving a Will (Intestate) when your estate will be divided according to this set of rules, irrespective of your wishes. Your spouse/civil partner may not automatically receive all of your estate.

If you have children, grandchildren or great grandchildren

Your spouse/civil partner will receive all your personal possession, the first £250,000 of your estate in your sole name and a half share of the remainder of your estate in your sole name over this value.

The other half of your estate over this limit will pass directly to your children.

All children are treated equally including adopted children but step children will not be included.

They will receive their inheritance when they reach the age of 17 or if they marry or enter into a civil partnership before they are 18.

If your estate is worth £250,000 or less, your children will receive nothing.

If you are not married/in a civil partnership, or you have divorced or ended your civil partnership, your children will inherit the whole of your estate.

If you have separated but are still married/in a civil partnership, your spouse/civil partner may inherit, even though you no longer live together.

If you have no children, grandchildren or great grandchildren

Your spouse/civil partner will receive all your personal possession and the remainder of your estate.

Any assets your hold jointly will pass automatically to the surviving joint owner and will not be subject to the Intestacy Rules.

Five Good Reasons To Make A Will In Your 20s

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Making a Will is commonly seen as something to do later in life. People in their 20s often think they do not need to make one but below are 5 good reasons to make a Will, whatever your age.

1. To make sure your boyfriend or girlfriend inherits

If you live with your partner but are not married, then your partner will not benefit under the intestacy rules. If you want your partner to benefit on your death, you will need to make a Will.

2. To provide for your pets

Household pets, such as cats and dogs, are covered by the legal definition of chattels (personal possessions) and so can be left in your Will in the same way as your other possessions. You can therefore include a legacy in your Will to leave your pet to a friend or family member.

3. To give your friends something to remember you by

Many people in their 20s have more student debt than assets but even if you do not own a house or have much money, you will no doubt own items that are important to you. Items such as jewellery, musical instruments and books can be left to your loved ones in a Will.

4. To deal with a jointly owned property

If you own a property with someone else, it could be sensible that you make a Will. This is particularly important if you own the property as ‘tenants in common’, which means that your share of the property does not pass automatically to your co-owner on your death (this would only happen if you own your property as ‘joint tenants’) . Under the rules of intestacy, your closest relatives will inherit your share (probably your parents.) Therefore, if you would like your co-owner to inherit then you must either make a Will or make sure that you own your property as ‘joint tenants.’

5. To leave money to charity

Many people choose to leave money to a charity in their Will. Even if you are strapped for cash, your modest donation might make a big difference to a charity.

For further information about making a Will, please contact a member of our Private Client department for expert and professional advice.

Charities and Your Will

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Christmas is seen as a time for giving so if you are thinking of making or updating an existing Will, have you considered leaving money to charity?

The Charity Commission has revealed that 35,000 people in England, Scotland and Wales who died in 2014 made donations in their Wills, benefiting more than 2,200 charities. Whilst this may seem like a large amount, more than 550,000 deaths were registered in England, Wales and Scotland in 2014. Working on these figures, it would therefore appear that roughly fewer than one in ten people leave money to charity when they die.

If you leave something to charity in your will, then it will not count towards the value of your estate. Furthermore, if you leave at least 10% of your net estate after any exemptions have been taken into account to charity, this cuts the rate of any Inheritance Tax you pay from 40% to 36%.

For more information, please contact our Private Client department for expert and friendly advice.

Digital Assets And Your Will

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Most people are aware of the importance of making a Will to deal with physical assets. Relatively few of us, however, have probably considered what will become of our digital assets when we die.

What is a digital asset?

A digital asset is one that requires a password and username to access. For example, digitally-stored music collections, social networking sites, and online investment and banking accounts.

What to do?

It may be that dealing with your digital estate is as simple as updating your Will to include a digital assets clause. Thereafter, you should note down your passwords for safekeeping. If your Will is being held by Solicitors, it may be a sensible idea for you to provide them with a copy of this information that will be stored confidentially beside your Will. This is particularly useful if you have also appointed Solicitors as your executors.

Failure to plan for digital inheritance can cause problems as without usernames and passwords it can be very difficult for executors to access web domains, social networking sites and other online accounts. As the executors’ duty is to gather in and administer all of the assets of a deceased’s estate, it is important that they are armed with the necessary information to enable them to do so.

The challenge is therefore  to keep the information up-to-date and hidden yet accessible when the time comes.  It is important to remember that you should not include details of your web-based accounts, passwords and user names in your Will. This is because a Will, once proved, becomes a document of public record and therefore potentially accessible by fraudsters.

For more information, please contact us for expert and friendly advice.

Changes To The Law On Wills And Intestacy

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The Inheritance and Trustees Powers Act 2014 came into force in October 2014 and made a number of changes to the law on wills and intestacy.

Intestacy arises when somebody dies without having made a Will. If you die intestate then the law will state what will happen to your Estate rather than you.

If your circumstances are not straightforward, for example, you may have children from a previous marriage, it is all the more important to make a Will.  If you do not have a Will in place, you should consider whether you would be happy for your estate to be distributed in line with the new Intestacy Rules.

In many cases, a Will is needed to restore balance between competing obligations and responsibilities for which a person is often seeking to provide when they write a Will.

For more information, please contact our Private Client department for expert and professional advice.

Daughter Rejected By Mother In Will Wins £164k Inheritance

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When Mrs Jackson died in 2004 she deliberately excluded her daughter from her Will and left her estate to animal charities with which she had little connection.  In a surprising decision the Court of Appeal has, however, awarded the daughter a substantial settlement from her mother’s estate. This case could prove to be a landmark ruling and will no doubt come as unwelcome news to anyone keen to disinherit a family member in similar circumstances.

The court heard that Mrs Jackson’s daughter, Heather Ilott, eloped at the age of 17 with her boyfriend and, as a result, her mother had never forgiven her. Mrs Jackson made her last will in 2002 with a letter to explain why she had disinherited her only daughter, referring to the fact she had walked out of her home in 1978 to live with her boyfriend.

When her mother passed away, Ms Ilott brought a claim under the Inheritance (Provision for Family and Dependants) Act 1975. This Act allows someone who was dependent on a person who has died to claim against their estate for ‘reasonable financial provision’ to be made if such provision has not been made for them in the deceased’s will. Ms Ilott successfully persuaded the Court that the absence of provision was ‘unreasonable’. This was surprising considering the two women had had no contact for years.

The factors which may have influenced the Court’s decision include the fact Ms Ilott is dependent on state benefits.  Furthermore, Ms Ilott was also totally excluded from the Will with one judge describing her mother’s decision as ‘harsh, unreasonable and capricious’.

If you are in any doubt about how to write a legally enforceable will then please contact us today and avoid any future problems.