How to witness a Will during lockdown

The rules around the correct witnessing of a Will are strict. If they are not complied with, the Will is not valid and relatives and loved ones may miss out on the inheritance that was intended for them.

The requirements for signing a Will are set out in the Wills Act 1873. The person signing the Will must do so in the presence of two or more witnesses who are also present at the time or must confirm to the witnesses that the signature is theirs.

The person signing must do so themselves or someone else can sign for them, in their presence and at their direction.

The two witnesses must each attest and sign the Will or acknowledge their signature in the presence of the testator.

This generally means that at least three people will be present together, signing the same document at the same time. With restrictions and precautions because of the pandemic, the Ministry of Justice has put new temporary rules in force.

New rules for the witnessing of Wills

With an increase in the number of Wills being made during 2020, the Ministry of Justice introduced legislation in September 2020 allowing the video-witnessing of a Will. It applies to Wills made on or after 31 January 2020 and is currently expected to apply for two years, until 31 January 2022.

Wherever possible, a Will should still be witnessed in the ordinary way. If this is not an option, then video witnessing can be considered.

Video witnessing of a Will Two witnesses must watch the testator sign and they should be able to clearly see him/her signing, but this can be done via live video link. Where possible, the process should be recorded and kept, case of any subsequent dispute.

The Will’s attestation clause will refer to the document being witnessed remotely and can also specify whether a recording has been made.

Before signing, the witnesses should be shown the Will via the camera, although they do not have to see the contents. It should be checked that they can see each other and the testator and that they will be able to see all parties signing. Ideally the two witnesses will be present together, but if this is not possible, then they can also be in separate locations.

Once the testator has signed, the Will should be sent to each witness for them to sign, preferably so that they sign within 24 hours of the testator, so ideally not relying on the postal service. Again, the testator and the other witness should see a witness signing.

Who can witness a Will?

The usual requirements for a witness to a Will apply, meaning that the following people cannot be a witness:

  • The spouse or civil partner of the testator
  • A beneficiary of the Will
  • The spouse or partner of a beneficiary
  • Someone who is under 18
  • Someone who is blind or partially sighted
  • Someone who does not have the mental capacity to understand what they are signing

If you would like to make a Will but you are concerned about how to have it witnessed, we will be happy to advise you.

For press enquiries and further information on your own wealth management plans you can reach out via the contact form or schedule a call via the Calendly widget (30 min initial enquiry option) below:

 

People prompted to make a Will by the Covid-19 pandemic

As the pandemic pushes the annual death rate above average, research has found that it has prompted people to make a Will.

A survey entitled the UK Wills, Trusts and Probate Market Report 2020 conducted by market research consultancy IRN Research found that of those with a Will, 4 per cent had made it because of the coronavirus situation.

The survey calculated that as 36 per cent of adults have a Will in place and the adult population of the UK is 53 million, then a total of around 19 million have a Will.

The main reason cited by most people for making a Will was simply peace of mind, with 67 per cent giving this answer. Next was ensuring that their estate would be distributed as they intended after their death at 49 per cent. For 36 per cent of those questioned, they made a Will to secure the future of their family, with 35 per cent making a Will when they had children.

In fact, there are many good reasons to put a valid Will in place, including the following.

To ensure your estate goes to those you wish to benefit from it

If someone dies without a Will, then their estate passes under the Rules of Intestacy to close family members. For example, if someone is married and has children, then the first £270,000 of their estate, plus all of their personal possessions will go to their spouse together with half of the remainder of the estate. Their children will share the remaining half of the estate equally between them. This could result in your children receiving less than you would like them to have.

To avoid the sideways disinheritance trap If someone has children and then marries for a second time, there could be a risk that their children will lose out. A marriage automatically invalidates a Will, meaning that the new spouse could inherit the bulk of the estate. It is then open to them to leave it to their children, as well as a risk it could be spent, for example, in care home fees.

To provide for your children

As well as leaving your estate to your children, you can also appoint a guardian for them if they are under the age of 18. If you do not make a Will, then it would be for the Court to decide where they should live.

To set up a trust

A Will can be used to set up a trust, which can be used for a variety of reasons. You can put money for your children into a trust until they reach the age at which you would like them to inherit.

You can also put your share of any jointly owned property into a trust, giving your spouse or partner a life interest in your share so that they can live there for as long as they want, but so that the proceeds of sale after they no longer need the home will pass to other beneficiaries, often children. 

To minimise the Inheritance Tax payable

By using estate planning, you can legitimately reduce the amount of Inheritance Tax your executors will be required to pay, meaning you can leave more of your assets to your loved ones.

It can be a complex area however, so taking professional advice is always recommended.

For press enquiries and further information on your own wealth management plans you can reach out via the contact form or schedule a call via the Calendly widget (30 min initial enquiry option) below:

 

Survey finds that three-fifths of UK adults do not have a Will in place

Financial services firm Canada Life says that 59 per cent of adults in the UK have not made a Will.

This means that some 31 million people have not chosen who to leave their estate to.

Who doesn’t have a Will?

The study found that  22 per cent of those without a Will are aged over 75. Of those aged between 65 and 74, 39 per cent have not written one.

The pandemic has had the effect of persuading younger people to start thinking about a Will, with 21 per cent of those aged 25 to 34 considering writing one and 12 per cent actually doing it. A larger group of 30 per cent updated their existing Wills.

Only 12 per cent of those questioned had a Lasting Power of Attorney in place prior to the Covid-19 outbreak, with 6 per cent saying that they had contacted a professional to put an LPA in place since the lockdowns began.

Similar figures applied to living Wills, specifying what decisions someone wants made when it comes to medical treatment. Before the lockdown, 13 per cent had a living Will, but a further 6 per cent had made a living Will during the lockdown period.

The advantages of making a Will

By leaving a Will, you can ensure that all of your estate and assets are left to those whom you want to benefit from them. If you should die without a Will, your estate will pass in accordance with the Rules of Intestacy. The Rules state that all of your personal belongings plus the first £270,000 of your estate will pass to your spouse, if you have one.

The remainder of your estate is then split into half, with one half going to your spouse and the remainder split equally between any children you may have. This can be problematic in the event of a second marriage, where children could lose out to a new spouse. A Will can easily remedy this, by leaving a new spouse a lifetime interest in an asset, with it ultimately passing to children.

When writing a Will, you can choose who you want to inherit and how much, as well as who you want to act as your executor to deal with the winding up of your estate. You may also want to leave property or money in trust, and you can specify this in your Will, as well as choosing trustees.

If you have children, you can select their guardians and leave money in trust for them until they come of age. If you do not leave a Will, then it will be for the court to decide with whom they should live.

By leaving a Will, you can be sure that your family will know your wishes for them after your death. A Will can also help your relatives avoid disagreements, particularly if you have discussed your decisions with them beforehand.

For your own estate planning needs, you can book a consultancy call with an expert via our scheduling window below:

 

A Legacy to Remember

In a climate of uncertainty, Thasha Aly ponders the surprisingly not-so-daunting prospect of writing a will. And the importance of leaving a legacy, no matter how small, for the ones you love.

I have a confession. Until recently, I hadn’t written a will. As a qualified lawyer, you think I’d know better, but life just somehow got in the way.

They say that the moment you experience a significant life event (or a “Yikes, I’m a grown up” moment), you should get things written down. So, if you move house, make a will. If you get married, sort your will. If you have a change in health circumstances, you’re embarking on a life-changing journey, or you’re about to have children, the will just makes sense.

Despite ticking most or all of these boxes, something was always holding me back from putting quill to parchment (how a proper will should be written surely? Inkpot at the ready!). It doesn’t make sense though. I’ve worked in the law, I’ve witnessed wills, I’ve even urged others to make sure they settle their own affairs – so, what about me?

I think there’s something so final about writing down how you want all your worldly possessions to be distributed once you shuffle off this mortal coil. It feels so horridly morbid to talk about the practicalities of death that we often just shy away from the inevitability of it all. Well, at least, I did. But with the difficult conversations of Covid-19 dominating nearly every household, and the discussions around mortality being more relevant than ever, it’s time I faced it too.

I’m very blessed to have a little boy who I want to provide for. I don’t earn a great deal, but what I do have, I would want to be at my family’s disposal. I want my son to have the option of going to university, or of living out to take on an apprenticeship if he wanted. To travel, to see things I never did. I know I’m incredibly lucky enough to have a husband who’d take care of him, but if what little I have can make life slightly more comfortable for the both of them, then why not?

A little legacy of love. That sounds good to me.

So…can I get a witness? (Or two).

Our guest contributor is Thasha Aly. Thasha was born and brought up in Kent, after her parents emigrated from India to teach here. She has worked in the law, the third sector and in special educational needs during her career. She and her husband live in London, and when she’s not running around after their toddler, she enjoys travel, learning, and eating (a lot).

 

For your estate planning needs session with an expert via our scheduling window below:

 

Can funeral costs be paid out of someone’s estate?

Paying for your funeral is oft overlooked, it’s something you should also be thinking of as part of your death planning. Don’t be in a position where your family has to set up a GoFundMe page to pay for funeral costs.

Paying for a funeral after someone’s death can be difficult if money has not been set aside for this purpose.

Funeral expenses can usually be paid for from the deceased person’s estate, but it may be necessary to wait until a Grant of Probate has been issued, which could take several months.

Average funeral costs

SunLife’s Cost of Dying Research 2020 found that the average cost of a funeral is £4,417. This figure is the average of a burial or a cremation.

Burials are more expensive than cremations, with an average cost of £4,975. Cremations were £3,858 on average.

In addition to this, there are usually send off costs for items like funeral notices, orders of service, limousine hire, venue hire, flowers and catering. The average spent on these costs was £2,306.

Payment by relatives

The SunLife report also found that 69 per cent of relatives had to pay some or all of the cost themselves, with the average contribution standing at £1,981. For 12 per cent of those who had to contribute, this caused a notable financial problem.

Paying funeral costs from the estate

Whoever organises the funeral and signs the contract with the funeral director is responsible for paying the costs initially.

In some instances, the deceased may have put a pre-paid funeral plan in place, in which case this will be used to cover the costs. If there is no plan, then it may be possible to ask the deceased’s bank to release funds to make payments. Before agreeing to this, the bank will usually require sight of both the deceased’s death certificate and itemised accounts from the funeral director and other contractors showing their fees.

Where funds are not released, relatives will usually fund the funeral themselves. The estate should reimburse all money later on, once Grant of Probate or Letters of Administration have been issued, provided that full receipts are provided for record-keeping purposes.

Payment of funeral costs takes priority over all other debts except those which are secured, for example, a mortgage.

In the event that there is not enough money to pay for a funeral, families receiving certain government benefits can apply for a Funeral Payment from the government’s Social Fund.

A probate solicitor will be able to apply for a Grant of Probate and deal with the winding-up of an estate on behalf of the estate’s executor or administrator, to include reimbursement of funeral expenses.

For your estate planning needs book a session with an expert via our scheduling window below:

 

 

5 estate planning misconceptions you should avoid

misconceptions

1. You need to be wealthy to consider having an estate plans

Rather you need to consider the value you place on the wealth you have and the potential claimants on it after you pass away.

A potential stake in a relatively modest estate consisting of a £500,000 property and £10,000 in savings is sizeable enough to want to protect for future generations. If you don’t have an effective estate plan in place your beneficiaries could face several life threats such as divorce settlement claims, financial mismanagement, creditor/bankruptcy claims, long-term care fees, and generational inheritance tax.

2. It’s like writing a will

We define ‘estate planning’ as follows:

Anticipating and arranging the management and disposal of someone’s estate either during their lifetime or after their death with due consideration given to challenges the estate may face during probate and also in the event of that person losing mental capacity during lifetime.

A will only considers what your wishes are at the point of death. However, prior to death your estate needs to be organised to ensure you’re not overly exposed to various taxes – not just inheritance tax. Your estate may include a business, a property portfolio, offshore investments, insurance policies and more. An estate plan will consider strategic gifting, structuring and even investing. It will always require a professional who recognises a joined-up approach is needed. A will is rarely enough.

3. It’s a waste of time and money as my family will do the right thing

1 in 3 Britons are relying on an inheritance to pay off their debt. We are living longer too but we also have increased dementia rates. Thus all indicating the financial pressures are like to increase significantly over the coming years.

Frankly, you don’t know what your family will do because you don’t know the type of pressure they will be under after you’ve passed away. If you think that’s unlikely to happen to you, consider the fact that over 12.6 million (24 per cent) people would seek to dispute the wishes of a loved one by going to court to challenge the bequests if they disagreed with the division of their estate based on research by Direct Line. Also consider the fact that in 2005 the High Court only dealt with 15 inheritance disputes, in 2016 they dealt with 116, and in 2019, it dealt with 188 cases.

4. You’re too young

Unless you know when you are going to die, you don’t know what the future is going to bring. What you do know is the level and type of wealth you have today and you should also be thinking about your estate plan just as readily as someone considerably older. Our clients tend to be from the age of 35, which is a good age to start thinking strategically about how you’d structure your business and future investments, which will in turn allow you to avoid costly mistakes you would’ve otherwise made.

5. It’s very expensive

The cost of not doing anything could be far more expensive. Consider the fact that 100% of your estate could be lost to financial mismanagement, or upto 50% lost due to divorce settlement claim. Furthermore, that same wealth having already been taxed for inheritance tax on your death would be taxed again for inheritance tax on your beneficiary’s death. Income tax is not paid on the same wealth twice if you gifted it to someone – but that’s not the case with inheritance tax – this is what we call generational inheritance tax.

Calculate your Estate Threat Score and receive a free 10 page strategy document:

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Dearly departed

When someone passes away in the family, it hits hard. Harder than you would ever expect. But once the trauma of announcing the news, conducting the funeral, and saying last goodbyes is over – you’re left with the second round of grief. Sorting through your loved one’s personal affairs and finances to work out ‘what’s next’.

It might be that your dearly beloved has been forthright in preparing his estate for his inheritors. Or (and as is so often the case), they might not have felt ready, or even found the time to prepare a will, let alone set up the necessary ‘pots’ for the family to rely upon. From my own personal experience, I am very lucky that my dear father had the foresight to plan ahead for his demise. Perhaps it was different for him. He was very unwell for over a decade, and with the whisper of loss always on the horizon, the grim reality of it all must have dawned on him long ago. But I’ve always wondered at how brave he must have been to face death head on, whilst still brimming with life. I don’t know if I could do it for my own children. Although, having seen the lengths Dad went to for us, I really hope I find that bravery in me one day.

Apart from Mum, none of us really knew how much Dad had prepared his estate for us until we all sat down with our newly appointed financial adviser. The documents had all been kept safely in their filing cabinets (giant grey monoliths that we consistently side-stepped for fear of being explained what was in them). Those cabinets teemed with reams of paper that we never fully understood the importance of, until this day.

We felt so reassured when we were told that Dad had thought to arrange as much as he could to make this horrible time somehow more manageable. Aside from the extensive joint will, there was life insurance, business cover, trusts for each of us, you name it. Our minds boggled a bit on hearing the explanations of how everything would work. And at the same time, we were tearfully at peace when we heard how the family home, and the business our parents had built up over the years, were now protected. Protected by various clever mechanisms Dad and his team had thought up. We truly never gave him credit for everything he thought of. But then, that’s so often the case for loved ones. We don’t see them for the stars that they are until their light is gone.

I think we all were so grateful that we didn’t have to sit there, whilst still in the throes of grief, and work out all the money and legal documents needed to just ‘carry on’ for now. Dad had taken away that exhausting stress for us. Just one of his many parting gifts. It gave us the space to breathe and plan the future, and to say our proper goodbyes in our own time. No probate breathing down our necks. No unnecessary calls back and forth with official bodies. It was all in place with a few signatures and registrations.

So I guess, thanks Dad, we miss you beyond words. You really did think of everything. I’m off to buy a filing cabinet. Because, I want to be just like you when I grow up…Love, Your Daughter (mother of two, 35).

Our guest contributor is Thasha Aly. Thasha was born and brought up in Kent, after her parents emigrated from India to teach here. She has worked in the law, the third sector and in special educational needs during her career. She and her husband live in London, and when she’s not running around after their toddler, she enjoys travel, learning, and eating (a lot).

 

For your personal estate planning needs, don’t hesitate to book a session with an expert via our scheduling window below:

 

 

Witnessing your will via video

The Ministry of Justice (MoJ) has announced that it has temporarily legalised the witnessing of wills by video, in an update to legislation that is over 150 years old.

The amendment recognises the challenges presented by the Coronavirus crisis of witnessing wills in person due to social distancing requirements.

Dispensation has been given to enable us to witness your will in a socially distanced way by

  • Witnessing the will through a window or an open door of a building or a vehicle,
  • Witnessing the will from a corridor or an adjacent room with the door open,
  • Witnessing the will outdoors from a short distance ie. the garden.

However in cases where it is impossible to witness the Will in person, this temporary measure will enable the witnessing by video

Commenting on the change, The Institute of Professional Willwriters, the membership body for wills and probate practitioners, has said

“We had been corresponding with MoJ between April and June regarding this matter and pushing for the government to relax the regulations. And whilst they indicated that the government had no plans to make any changes we are of course delighted that this change has been considered to be appropriate in all the circumstances, It will allow more testamentary freedom for clients and ensure that they are able to create effective Wills whilst in isolation or quarantine that will be recognised in law if witnessed via video conferencing.”

We must stress however that the guidance is clear that the preferred method of will witnessing continues to be in person and where possible this should be adopted.

And even in cases where wills have been witnessed via video, we urge the re-signing be completed in person as soon as is feasibly possible.

The amendment will remain in place as long as it is deemed necessary, provisionally until 31 January 2022.

We continue to offer telephone and video consultations as well as some home consultations provided a Covid-secure environment can be facilitated.

At ADL Estate Planning we work closely with our colleagues from several major practices to support them in ensuring their clients are provided with bespoke estate planning solutions. Should you be a professional or a potential client don’t hesitate to reach out via our scheduling window below:

 

What is the difference between a mirror Will and a mutual Will

Clients can often misunderstand the difference between mutual Wills and mirror Wills, despite them differing in their legal aspects.

When it comes to Will writing, many couples believe that only a single Will is required between the both of them. The reality is however, that everyone who chooses to make a Will must sign one separately, including spouses.

What is a mirror Will?

Mirror Wills are virtually identical Wills where one person in a couple leaves their estate to the other in the event of their passing away. In most cases, one spouse leaves everything to their spouse and then eventually to their children, with both Wills outlining this. The result being, that when one of them passes, the other is protected, and upon the second death, the children inherit the assets.

However, issues can arise if the second testator receives the estate of the first testator but then changes his or her Will and leaves his or her estate to different beneficiaries, such as a new spouse. In the event that the second testator changes his or her Will there is nothing that the disappointed beneficiaries can do.

What is the mutual Will?

This is a Will that is mutually binding, meaning that after one party dies, the remaining party is bound by the terms of the mutual Will. The purpose is often to make sure property passes to one’s children rather than to a new spouse (unlike a mirror Will). When the first of the two testators dies, without having revoked his or her mutual Will, the survivor becomes bound by the arrangement. The survivor is still permitted to execute a new Will, however the property which was left under the original mutual Will becomes subject to a constructive trust and the beneficiaries originally named are entitled to receive it irrespective of what the replacement Will says.

At ADL Estate Planning we work closely with our colleagues from several major practices to support them in ensuring their clients are provided with bespoke estate planning solutions. Should you be a professional or a potential client don’t hesitate to reach out.

Are Bitcoins covered in your will?

I invested a whopping £100 across Bitcoin and Litcoin a couple of years ago and I’m still £55 down. I didn’t trust it then and I don’t trust it now. I got caught with herd investment bug. Nonetheless, cryptocurrency is an increasingly popular method of online payment. It is best understood as a form of currency that exists as a digital asset, with no paper or coins. One of the main benefits is it is secured in such a way that it is near impossible to forge or double-spend.

Of all the cryptocurrencies out there, the most well known is Bitcoin, operate within blockchain technology. Blockchain is a method of ensuring the integrity of the data, essentially decentralising the storage of the data in a way which means that no single organisation or individual (like a bank) can have overall control.

While digital currencies are relatively new they still form part of your estate when you die. They’re classed as digital assets similar to frequent flyer points or gaming credits so you want to make sure they’re included in your Will.

There are two key things to consider about this digital legacy.

  1. You Will need to properly define Bitcoin or any other digital currency in your Will. If you already have a Will you Will need to check and make amendments if they are not covered.
  2. The other important factor to consider is how your beneficiaries are going to access your bitcoins. 

Passing on digital currency is more complex than passing on money stored in a traditional way such as a bank or savings account. Instead Bitcoins are stored in an encrypted electronic wallet. This wallet can be accessed only by an electronic key or password.

Unlike banks and building societies, cryptocurrencies do not store names and addresses against the electronic wallets, so aside from the electronic key there is no way to identify who a wallet belongs to.

It’s vital then to make sure that you keep a secure copy of the key for your executors. Without it, it will be virtually impossible for them to access the wallet and the money Will be lost. 

You could consider entrusting the key with a secure storage service, in a safety deposit box or with your executor or a trusted family member. The main thing here is that it needs to be someone you trust as you are handing them access to your money.

A professional Will writer can advise on all of this and make sure that your digital assets don’t get forgotten when writing your Will. For help with this or any aspect of Will writing, do reach out.

At ADL Estate Planning we work closely with our colleagues from several major practices to support them in ensuring their clients are provided with bespoke estate planning solutions. Should you be a professional or a potential client don’t hesitate to reach out via our scheduling window below: