This is Why You Should Never Make a Will Without Taking Legal Advice

Making a will without the benefit of professional legal advice is an excellent recipe for strife between your loved ones after you are gone. That was sadly so in the case of a cancer sufferer who had no understanding that, when she signed her will, she was disinheriting her two beloved children.

About two and a half years before she succumbed to the disease, the middle-aged woman signed a will which had been drafted for her by her younger brother using a template downloaded from the internet. Save for her collection of books, she bequeathed him the entirety of her estate, which was worth almost £400,000. The will represented a radical departure from a previous will by which she had divided her estate equally between her children.

After the children challenged the will’s validity, the brother contended that it was a perfectly straightforward case in which she had simply changed her mind for good reasons, as she was fully entitled to do. He had faithfully carried out his sister’s instructions in drafting a very clear and straightforward will, the terms of which she could not have failed to understand.

There was no dispute that the will was lawfully executed and that she had the mental capacity required to make it. However, in upholding her children’s challenge, the High Court found that, having taken no legal advice, the woman fundamentally misunderstood what the effect of the document would be.

Her intention was that her brother, acting as her executor, would receive her estate and then apportion it between the children so as to reflect a disparity in lifetime gifts they had received from her. She failed to grasp that the effect of the document was to disinherit the children and give the entirety of her estate, bar her books, to her brother to keep for his own purposes.

The Court had no doubt that she deeply loved her children, who, despite their faults and foibles, were her pride and joy. She was grateful for her brother’s support as she fought tooth and nail against her illness, but he had not replaced her children in her affections. Even after she signed the will, she continued to make reference to the children’s upcoming inheritance.

The Court observed that there were aspects of the document, and the background history leading up to its execution, that excited suspicion. It found on the evidence that she lacked knowledge and approval of the will’s contents and particularly its effect. In restoring the children’s equal inheritance, the Court directed that the previous will should be admitted to probate.

Parking Fine Imposed on Private Landowner Triggers High Court Test Case

A fine imposed on a householder for parking her Land Rover on her own land put the conflict between private ownership and public access to the road network in high relief and provided the subject matter for an important High Court test case.

For many years the householder had regularly parked her car on a strip of pavement outside her home. The strip, which she and her husband owned, lay between their front hedge and the road. She was incensed when a local authority parking warden put a ticket on her windscreen, but her appeal was rejected by a parking adjudicator. The penalty was also confirmed by another adjudicator on review.

In upholding her challenge to that outcome, the Court rejected the local authority’s argument that the strip was deemed to have been dedicated as a public highway because members of the public had enjoyed access to it, as of right and without interruption, for 20 years or more. The reviewing adjudicator had made an error of law in concluding that such public access was not interrupted by the frequent presence of the couple’s parked cars on the strip.

The Court found that the strip could also not be viewed as a road to which the public has access, within the meaning of the Road Traffic Regulation Act 1967. During each of the 13 years in which the couple had owned their home, they had parked cars on the strip about 200 times, thus regularly impeding public access.

Had it been necessary to do so, the Court noted that it would have found that any implied licence that members of the public had to access the strip had been inoperable on the day the ticket was issued, due to the presence of the Land Rover. The local authority was directed to cancel the parking ticket.

SDLT on Mixed Use Property

With Stamp Duty Land Tax (SDLT) charged differently on residential and non-residential property, the disposal of a mixed-use property can lead to tax consequences that may affect the value you receive on sale.

Recently, the Chartered Institute of Taxation and the Stamp Taxes Practitioners Group agreed new guidance with HM Revenue and Customs (HMRC) on the classification of property in some common cases where there is mixed use of the premises.

HMRC have decided that the prior guidance that if the property is marketed as residential, it will be a residential property for SDLT purposes should not apply. Instead the test will be if the property is used or suitable for use as a residential property at the date of sale.

If a building is demolished or derelict, it will not be regarded as being ‘in use or suitable for use as a dwelling’, and where such a building is being reconstructed, the position will be decided on the facts: the work has to be significant – there is no ‘golden brick’ rule.

Lastly, where there is a mixed residential/non-residential use, the SDLT status of the property will depend on the facts – a ‘home office’ will be residential, but a self-contained business office (e.g. a surgery) or area let separately is likely to be classified as commercial. The test here is whether an identifiable use of an area precludes use of that area for any other purpose.

Always take professional advice before putting a property on the market.

 

Can Planning Objections Amount to Harassment? Guideline High Court Ruling

Landowners intent on developing their properties can find it intensely annoying when neighbours resist their plans. However, as a High Court ruling made plain, the right to object to planning applications is one of the benefits of living in a democratic country where freedom of expression is taken seriously.

The case concerned a property set in an area of outstanding natural beauty, which had become the focus of acrimonious and intractable dispute. Over the years, its owner had made over 50 separate planning applications, many of which drew objections from other property owners in the area.

The owner, together with her husband, launched proceedings against four members of the local residents’ association, accusing them of harassment and claiming more than £1.3 million in damages. She contended, amongst other things, that their conduct was oppressive and unreasonable and that they were using the planning system as a device to upset her. Many of their planning objections were, she asserted, spurious, unmeritorious and improperly motivated.

For their part, the members vehemently denied those allegations and argued that the owner’s case represented an unwarranted intrusion into their human right to express themselves freely and an attempt to impede their entitlement lawfully to object to planning applications through the proper legal channels.

In refusing the owner’s application for a pre-trial injunction, the Court observed that, where spurious planning objections are spitefully and maliciously made with intent to cause distress, there may be a potential basis for judicial intervention. It emphasised, however, that the law should be slow indeed to impinge on precious freedom of expression rights and the entitlement to make genuine and meritorious objections to planning applications.

The owner was perfectly entitled to seek to develop her property and might be upset, frustrated or even angry at the opposition she had encountered. However, the Court could see no sensible or credible basis on which it could be maintained that the members’ objections were vindictive or devised to cause distress or otherwise inflict harm on the owner and her husband. There was no realistic prospect of establishing at trial that the members’ actions, whether individually or cumulatively, represented a course of conduct amounting to harassment.

The Court noted that, in a democratic society, the members were entitled to differ from the owner on the merits of her planning applications. If anything, the evidence clearly pointed to them having deeply held, sincere and genuine reservations about the nature and extent of her development proposals. It was the very purpose of the planning system to adjudicate such disputes in a regulated manner.

Wealthy Divorcee Hit Hard in the Pocket for ‘Delinquent’ Litigation Conduct

Those who attempt to lie their way to a favourable result in divorce proceedings are more than likely to be found out and hit hard in the pocket. That was certainly so in the case of an elderly entrepreneur who treated his ex-wife’s financial claims as if they were nothing more than an impertinence.

The English man and his American ex-wife, both in their 70s, were married for almost 30 years before they entered into a separation agreement in New York. The wife subsequently petitioned for divorce in England. Their divorce had yet to be finalised, but they had to date incurred about £1.8 million in legal costs.

Ruling on the matter, the High Court noted that the wheelchair-dependent husband was in poor mental and physical health. There was medical evidence that, although he was able to give oral evidence, his mental capacity to conduct his own case was compromised. That, however, did not deter the Court from describing his litigation conduct as abysmal.

He had treated the entire litigation as if it were an impertinence and a joke. His initial disclosure of his assets was deliberately false and he persisted in misrepresentation and lies to the very end. Given his persistent delinquency, the wife had not acted unreasonably in conducting a detailed forensic investigation of his finances.

The wife’s case that he had squirrelled away at least £27.4 million in hidden assets was not, the Court found, established on the evidence. The wealth to be distributed between them was thus confined to visible assets worth about £11.4 million. The Court noted, however, that it would be a travesty of justice were the husband not penalised financially for his delinquent litigation conduct. To mark the Court’s very strong condemnation of such conduct, he was ordered to contribute £200,000 towards the wife’s legal costs.

Taking into account the capital provisions of the New York separation agreement, the Court found it fair, just and reasonable that the wife should receive 65 per cent of the available assets and the husband 35 per cent. In order to achieve that division and a clean break between them, he was ordered to pay her a lump sum in excess of £1.6 million. The Court noted that the overall result of the titanic litigation was to reduce the husband’s net worth by more than £2 million.

Losing Capacity – Don’t leave it too late to get an LPA

Most of us will need to consider who will manage our affairs and look after us in our later life or, if and when we lose the ability to do this for ourselves.  It may be that we first have to consider this for our ageing parents or a family member.

Most people first experience the need for a Lasting Power of Attorney (LPA) because a friend or relative has lost capacity without making one.  If you lose mental capacity and have not made a Lasting Power of Attorney, your relatives, friends or even the local authority, can apply to the Court of Protection to be able to make decisions on your behalf as a “Deputy”.  You should bear in mind that once mental capacity for decision making has been lost there is no option but to apply to the Court of Protection, which will normally be a time-consuming and expensive process, often lasting in excess of six months and during which time assets may be effectively frozen.

Generally, the Court of Protection do not appoint deputies to make decisions about your health and welfare – instead preferring to deal with issues on a decision by decision basis.

Loss of capacity is not, unfortunately, something that is limited to old age. We therefore recommend all our clients prepare both types of Lasting Power of Attorney before they are needed.

What is an LPA?

An LPA is a legal document that enables you (the Donor) to choose people (Attorneys) to make decisions on your behalf, about such things as your finances, property and your personal welfare, at a time in the future if you become physically or mentally incapable of dealing with those affairs yourself.

Anyone over the age of 18 can set up an LPA providing they have the mental capacity to understand the meaning and the effects of it. There are two types of Lasting Power:

  1. Property & Financial Affairs (e.g. dealing with the sale of your house and paying bills and making investments on your behalf); and
  2. Health & Welfare (e.g. deciding which care home you go to or where you live and medical treatment)

Appointing attorneys

You can appoint as many attorneys as you wish.

You need to consider, however, how you want them to act in practice. There are different options for this such as ‘jointly’ (doing everything together) or ‘jointly and severally’ (acting either together or separately) or a mixture of the two.

You can appoint different people for the different types of LPA based on their ability to carry out their duties. You can give attorneys as much power as you like (they do by default have the same powers as the donor). You can also place conditions and restrictions on their power.

Replacement Attorneys, who would step in if your first appointed attorneys could no longer act, can also be appointed.

The Property & Financial Affairs LPA can be used as soon as it is registered (the court registration fee is £82 per LPA, though this is reduced if your income is below £12k per annum or if you are in receipt of certain benefits). This can be useful from a practical point of view, if for example, you still have mental capacity but have had an accident and wish others to do things for you.

Whilst you have mental capacity, your attorney must follow your instructions when making any decisions with you/on your behalf.

Health & Welfare attorneys will only be able to make decisions for you once you are unable to make those decisions for yourself (case specific).

What if I have an Enduring Power of Attorney?

Enduring Powers, since October 2007, cannot be created anymore. If your Enduring Power of Attorney was made correctly, signed and witnessed before October 2007 it should still be valid. Even if they are valid, however, there are likely to be issues with them and they should be reviewed.

In particular:

  • Enduring Powers do not cover health and welfare decisions – they are limited to decisions over property and finance.
  • Much of what is covered now when Lasting Powers are prepared professionally was not considered when Enduring Powers were made.
  • Enduring Powers have less safeguarding than LPAs as there is no requirement to register them until the Donor loses capacity. This may appear to be a benefit, but registration takes time and during that time the document can often not be used easily.

Why should I seek professional help?

Whilst you can prepare LPAs yourself, seeking professional legal help is the only way to ensure you receive the individual advice needed to complete the LPAs properly.

Preparing the forms correctly is only one aspect of putting effective LPAs in place for the future. Without individual advice and support it is likely only your family will find out if the LPAs have been well done.

All our service options include:

  • Reviewing your surrounding circumstances and what you wish to do (i.e. who you wish to appoint and why).
  • Advising on the options available both in terms of who to appoint and how this will work in practice.
  • Advising on the authorities, conditions, and restrictions you should include (and those you should not) and discussing alternate options with you to achieve your wishes.
  • Providing practical advice on issues you are likely not to have considered yourself.
  • Confirming the advice provided in writing by way of a written report.

The different service options are:

  • Advice only: you prepare the documents (we will provide you with a link to do this) and we review them and provide advice. You can then finalise the forms knowing they have been checked over and the advice you need has been provided; or
  • Advice & preparation: we provide advice and prepare the forms to include acting as your Certificate Provider (an independent person who confirms you know what you are doing, no one is forcing you to complete the forms and there is no reason for you not to prepare them) and you then finalise the documents; or
  • Advice, preparation & registration: this is a full service in which we do the work for you, on your instructions, through to registration of the LPAs.

 

The Team here at Wellers will ensure that you receive the advice you need to put the appropriate documents in place to suit your personal circumstances.  Get in touch today to start your LPA. For our London office please call 020 7481 2422 , for Bromley the number is 020 8464 4242 and for Surrey call 01372 750100.

Contact us by email: enquiries@wellerslawgroup.com

 

Navigating Inheritance Tax Implications for Cohabitating Couples

In a rapidly evolving social landscape, cohabitation has become a prevalent lifestyle choice for many couples. However, when it comes to inheritance tax, cohabitating couples often find themselves in a challenging situation when it comes to writing their wills and making them tax efficient.

Inheritance tax laws are typically structured to provide certain benefits and exemptions for legally married or civilly partnered couples. Unfortunately, cohabitating couples may not automatically enjoy the same rights and protections. As a result, the passing of assets from one partner to another in the event of death can trigger tax liabilities that may not be evident in traditional marital arrangements.

In many jurisdictions, married couples benefit from generous estate tax exemptions and the ability to transfer assets to a surviving spouse without incurring inheritance tax. Cohabitating couples, however, may face a different reality. Upon the death of one partner, the surviving partner could be subject to inheritance tax on assets that exceed the prevailing tax-free threshold (currently £325,000)

While cohabitating couples may face additional challenges, they are not without recourse. Strategic estate planning can play a pivotal role in mitigating tax liability and ensuring that a partner’s legacy is preserved. Utilising tools such as wills which include trusts can help cohabitants structure their assets in a tax-efficient manner.

Crafting a comprehensive and legally sound will is of paramount importance for cohabitating couples. A well-drafted will can outline the distribution of assets and provide clarity on the intentions of the deceased partner. Additionally, cohabitants should explore the inclusion of specific provisions to minimize tax exposure and enable the surviving partner to inherit without undue financial burden.

Cohabitating couples may consider strategic lifetime gifting as a means of transferring assets while minimising tax implications. By gifting assets during their lifetime, partners can potentially reduce the taxable value of their estate, thereby decreasing the inheritance tax liability for the surviving partner.

Understanding the nuances of inheritance tax is crucial for preserving financial legacies and safeguarding the interests of both partners. Cohabitating couples can take proactive steps, such as strategic estate planning, crafting comprehensive wills, and seeking professional advice in relation to cohabitation agreements, to navigate the challenges posed by inheritance tax. By doing so, they can ensure that their intentions are realised, their financial well-being is protected, and their loved ones inherit their assets as they intended in most tax-efficient way possible.

 

For enquiries relation to Tax Planning, please contact Naomi Augustine-Walker

By email: Naomi.Augustine-Walker@wellerslawgroup.com

By Telephone: 020 3831 2669

High Court Authorises Withdrawal of Young Father’s Life-Sustaining Treatment

Many families whose loved ones are in hospital on life support understandably cling to the hope that they will in time recover. As a High Court ruling showed, however, where such hopes run contrary to the weight of expert medical evidence, judges have the unenviable task of deciding where a patient’s best interests lie.

The case concerned a young father-of-two who sustained catastrophic brain and spinal injuries when a car in which he was travelling hit a tree. He had since been tended to round-the-clock in a hospital intensive care unit where he was entirely dependent on artificial ventilation, nutrition and hydration.

Speaking with one voice, medical professionals involved in his care were convinced that he was in a persistent vegetative state and that prolonging his treatment would merely result in the continuation of a life of which he had no awareness. Their views prompted the relevant NHS trust to seek the Court’s authorisation to cease his life-sustaining treatment.

Members of his family, however, took a different view. They had observed what they believed to be signs of awareness in the form of him opening his eyes and moving his head in response to requests. They felt strongly that he would have wanted his life to be sustained and that he should be given more time to recover. The Official Solicitor, who represented his interests in court, described it as a finely balanced case.

Ruling on the matter, the Court praised members of the family, who had conducted themselves with enormous dignity in a desperately sad case. There was a strong legal presumption in favour of life being sustained; his condition was in some respects relatively stable and his survival to date had defied medical predictions. There was no direct evidence that he was experiencing any pain.

His apparent responses to stimuli had understandably given his family hope. In the light of the unanimous medical evidence, however, the Court found that they were spontaneous and reflexive movements which were consistent with a persistent vegetative state and did not indicate any level of consciousness.

In granting the trust’s application with profound regret, the Court found that, in the light of his lack of awareness and bleak medical prognosis, prolonging life-sustaining treatment would bring him no benefit. Withdrawal of such treatment was, therefore, in his best interests.

Gifts to Pets in Your Will

In the realm of estate planning, one aspect that is often overlooked or not well-understood is the inclusion of provisions for pets in your will. Whilst pets are considered cherished members of many families, the law typically views them as property. As such, they require special consideration in your estate planning to ensure their continued care and well-being after your passing.

The first step in bequeathing a gift to your pet in your will is to clearly identify the pet or pets you wish to provide for. Include their names, species, and any distinguishing characteristics to avoid any ambiguity. This will help ensure that there is no confusion regarding your intent.

Selecting a trustworthy individual to care for your pet is crucial. This person will be responsible for your pet’s daily needs and ensure they receive the love and attention they deserve. Make sure to discuss your intentions with this person beforehand and gain their consent.

To support your pet’s care, you can set aside funds in your will. It’s advisable to specify a reasonable amount to cover food, veterinary care, grooming, and any other needs your pet might have. You can either leave a lump sum or establish a pet trust to manage these funds.

A pet trust is a legally binding document that outlines how the allocated funds should be managed for your pet’s benefit. This ensures that the funds are used exclusively for your pet’s welfare. Specify the trustee’s role, the duration of the trust, and how any remaining funds should be distributed after your pet’s passing.

Life circumstances can change, and it’s essential to revisit your will periodically to ensure that your pet’s needs are adequately addressed. If your designated “pet guardian” becomes unable or unwilling to care for your pet, it may be necessary to appoint a new caretaker.

Consulting with an experienced estate planning professional is advisable when including provisions for your pets in your will.

This article was prepared by Naomi Augustine-Walker, a private client solicitor in our London office. You can contact Naomi by email: Naomi.Augustine-Walker@wellerslawgroup.com or by telephone: 020 3831 2669 For our Bromley office please call 020 8464 4242 and for Surrey please call 01372 750100.

Let Down by Your Builders? A Good Lawyer Will See You Right

Many householders are familiar with the often traumatic experience of falling out with builders. However, as a High Court case showed, if their work is not up to scratch or left unfinished, litigation lawyers will bend every sinew to ensure that fair compensation is paid.

A homeowner engaged builders to perform major construction works on her property, including the erection of a kitchen extension and bathroom refurbishment. She also commissioned the manufacture and installation of triple-glazed windows, bi-fold doors and other glazing works.

After she launched proceedings, it was common ground that the works carried out were defective and left incomplete. Following a trial, the builder who bore responsibility for the construction works was ordered to pay her £34,711 in damages. She was also awarded £9,778 against his company in respect of the glazing works.

The judge rejected defence arguments that the homeowner was responsible for all that went wrong with the project because she permitted a friend to act as de facto project manager, a task for which she was said to lack the necessary experience, and failed to consult an architect or engineer when required. He found that the defective construction works arose from the builder’s own shortcomings.

The builder’s contention that she had contracted solely with his company, which had since ceased to trade, also fell on fallow ground. The judge found that, in dealing directly with the homeowner, he was not acting on his company’s behalf. He thus bore personal contractual responsibility for the construction works.

The homeowner further succeeded in arguments that, as the builder was not registered for VAT, the construction works were not subject to the 20 per cent levy. Save in respect of the bathroom refurbishment, the judge also found that the quoted contract price included both labour and materials.

In refusing to grant the builder and his company permission to appeal against that outcome, the Court found that any such appeal would stand no real prospect of success. The judge’s factual conclusions on the various issues in the case were amply justified. An award to the homeowner of £70,000 in interim legal costs was also confirmed.

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