July, 2014

No Will? Rules Changes From October 2014

Intestacy laws, those that govern where your estate will go if you die without a will, are being updated and come into force on the 1st October, 2014. Depending upon your circumstances, they will either have a dramatic affect on your estate (the money and property you leave behind) or will make almost no difference to you, but which? The new rules are from the Inheritance and Trustees’ Powers Act 2014 (ITPA 2014) and include details of how your intestate (no valid last will and testament) estate is to be distributed and how Trustees will be able to distribute income and capital to the appropriate beneficiaries. The changes apply only to individuals who are domiciled in England and Wales, when they die, and do not apply to Scotland or Northern Ireland at this time. First; the intestacy rules Deceased, married, but without issue (children, grandchildren etc.) Current rules: spouse, civil partner, parents and siblings may all share New rules: spouse or civil partner inherit all absolutely Deceased, married, with children Current rules: spouse inherits all chattels absolutely, plus a life interest in possession in half of the statutory legacy (£250k) New rules: spouse inherits all of the personal movable property plus half of the statutory legacy (£250k) absolutely A life interest means that you get use of it during your lifetime, but are expected to pass it on when you die. Absolutely means you get it all now -without exception; completely; wholly; entirely. How ‘chattels’ will now be defined Personal items which are called personal property in law, replace the word ‘chattels’ and the old Administration of Estates Act, 1925. Here is the way in which the description will change: Current definition of ‘chattels’ carriages, horses, stable furniture and effects (not used for business purposes), motor cars and accessories (not used for business purposes), garden effects, domestic animals, plate, plated articles, linen, china, glass, books, pictures, prints, furniture, jewellery, articles of household or personal use or ornament, musical and scientific instruments and apparatus, wines, liquors and consumable stores, but do not include any chattels used at the death of the intestate for business purposes nor money or securities New definition of ‘chattels’ Tangible movable property, other than any such property which—consists of money or securities for money, or was used at the death of the intestate solely or mainly for business purposes, or was held at the death of the intestate solely as an...

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Is it Right to Steal from Your Parents?

Many grown up children are given the opportunity to look after their parent’s financial (and perhaps welfare situations) when those parents are getting closer to the time when they may not be able to make those decisions alone. Does this provide the opportunity for children to steal from their parents? A Lasting Power of Attorney is the legal document where an individual gives someone else, or a number of people, access to all of their finances so that actions can be taken for the benefit of the person giving away the power. Unfortunately, some receivers of the power see this as an opportunity to take money from bank accounts and other financial institutions, and use it for their own pleasures. This is morally and legally against the wishes of those giving away the facility to manage the funds, to people they trust. A recent case, reported in the Daily Mail, saw a court to hear how a daughter stole £70,000 of her father’s life savings after he was moved into a care home. The daughter received a suspended jail term, but has claimed all along that her father did not object to how she used his money. Is this the same as giving her the money now? Nevertheless, the £100,000 of life savings should have been spent on care fees (as per the legal agreement) and when the money ran out to pay the fees, the local authorities were involved in an investigation, which led to the court appearance. The judge said that there was a public interest in maintaining the integrity of a power of attorney. When people lose the ability to control their own affairs, others must manage their money for them. This raises a number of questions, which can be seen clearly in the comments left by individuals who have different opinions about the daughter’s actions. Would the father have wished the daughter to have spent the money on herself? Mandy of Birmingham, said; Last year my mother in law went into a home and I had power of attorney. Although my hubby and I were struggling financially not once did we ever take any of her money as it was not our money and even if she said she didn’t mind she was not in the right state of mind to make such a decision. When she passed away nothing was owed to anybody and...

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