Proposed probate court fees increase – scrapped for now!

21st Apr 2017
In a surprise U-turn last night the Ministry of Justice have scrapped for now the … ...
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Proposed probate court fees increase – scrapped for now!

21st Apr 2017

In a surprise U-turn last night the Ministry of Justice have scrapped for now the proposed increase in probate fees. They have stated that there is not enough time for the proposed legislation to go through parliament ahead of the general election.

Nothing has been said as yet on whether scheme will be brought back if the government are re-elected.

Further Reading:
BBC News

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Are you interested in becoming a Dementia Friend?

25th Jan 2017
Alzheimer’s Society’s Dementia Friends programme is the biggest ever initiative to change people’s perceptions of … ...
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Are you interested in becoming a Dementia Friend?

25th Jan 2017

Alzheimer’s Society’s Dementia Friends programme is the biggest ever initiative to change people’s perceptions of dementia. It aims to transform the way the nation thinks, acts and talks about the condition.

Our colleague Dawn, is a trained Dementia Friends Champion volunteer. As a volunteer she runs free 1 hour information sessions where people learn some key messages about dementia and commit to turning understanding into action. In our commitment to support Dawn and the Dementia Friends initiative we are now running regular Dementia Friends training sessions from our offices.

The sessions are open to all and the next session will be at 9.00 am on Friday 17th February.

If you are interested in attending, you can book the session via the Dementia Friends website or alternatively contact us.

If there are several of you who wish to attend a session then it maybe possible to run the training at your offices. Please contact Dawn directly to discuss this.

Further sessions will be arranged, so if you can’t attend on the 17th then please register your interest with us and we will inform you of new dates.

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New STEP adviser joins the Pavilion Row team

17th Jan 2017
We are delighted to announce that Dawn … ...
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New STEP adviser joins the Pavilion Row team

17th Jan 2017

We are delighted to announce that Dawn Plant has joined our team as a qualified Trust and Estate Practitioner (TEP).

Dawn has 15 years’ experience working in private client law and as well as a full member of STEP she is a fellow of the Chartered Institute of Legal Executives and a Dementia Friends Champion.

Having started with us in November she has already brought many benefits to our clients and introducers through her extensive experience dealing with Wills, Powers of Attorney and Trust and Estate Administration.

As a Dementia Champion Dawn has a passion for Dementia care and also has tremendous practical knowledge and experience dealing with the workings of the Court of Protection and Powers of Attorney.

See our team here.

 

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Angus shares his views on regulation

17th Nov 2016
For sometime now there has been on going debate discussing the pros and cons of … ...
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Angus shares his views on regulation

17th Nov 2016

For sometime now there has been on going debate discussing the pros and cons of regulation in the Will industry with the Legal Services Board commissioning a number of research projects looking at this area.  Angus shares his views on this topic in the STEP journal this month, read the article here.

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Pavilion Row has become the latest firm to join the Opera North Business Partners scheme.

19th Jul 2016
Pavilion Row, has chosen to become a member of the Business Partners scheme to highlight its commitment to … ...
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Pavilion Row has become the latest firm to join the Opera North Business Partners scheme.

19th Jul 2016

Pavilion Row, has chosen to become a member of the Business Partners scheme to highlight its commitment to Yorkshire’s thriving artistic life and, in particular, to celebrate the work of Opera North, the only national opera company based outside London.

Angus Houston, Pavilion Row’s Managing Director, said:

“At Pavilion Row, we pride ourselves on our individual, flexible approach and value this chance to join forces with an arts organisation that is as committed as we are to creativity, innovation and excellence and to presenting the very best of what the North has to offer locally, nationally and internationally.”

Opera North launched the Business Partners scheme in 2015 to build connections with and between those business leaders who value the role the arts play in enriching life in the North and who are keen to further Yorkshire’s vast cultural, social and economic potential. It enables businesses to get closer to the Company and to gain an insight into all of its activities, including its projects with schools, young people and the wider community. Pavilion Row becomes a member of the scheme alongside such companies as Yorkshire Building Society, Yorkshire Water, KPMG, William Jackson Food Group and Land Securities.

Jo Graham, Opera North’s Business Development Manager, said:

“Opera North is a unique cultural and economic asset to Leeds and the wider Northern region. A registered charity with a £16m annual turnover that contributes significantly to the region’s economic and cultural wealth, it is at the forefront of the Leed’s burgeoning international reputation.

“The Business Partners scheme gives organisations the chance to get to know us better and also to work with us to promote everything the North of England has to offer. We are delighted to welcome Pavilion Row on board.”

 

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Are LPAs an essential part of an income drawdown pension arrangement?

8th Jun 2016
The new pension freedoms introduced in April 2015 have given retirees the option to keep … ...
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Are LPAs an essential part of an income drawdown pension arrangement?

8th Jun 2016

The new pension freedoms introduced in April 2015 have given retirees the option to keep investing their pension pot and draw an income directly from it, as well as the option to pass their pension pot on to their beneficiaries when they die.

While this greater flexibility is very attractive to some retirees, there is one obvious risk.

What will happen if their health deteriorates and they are no longer able to manage their income drawdown arrangement?

What if they need to adjust their income level (for example, to pay for care costs) or adjust their underlying investment choices? Who will make these decisions and instruct the pension company?

Obtaining authority to act on an individual’s behalf can be complicated, time-consuming, expensive and require a court intervention – even for a spouse or close relative.

Of course this risk isn’t new, but it is accentuated by the new rules and the fact that more and more people are likely to opt for income drawdown and keep their pension pots invested until the day they die.

In the ‘old days’, the vast majority of people retiring took out an annuity, whose terms (and income) are fixed for life and, therefore, incapacity was not such a risk as there are no decisions to be made.

Fortunately, a Lasting Power of Attorney (LPA) is a simple but highly effective solution. This legal document provides for one or more people to make decisions on an individual’s behalf if they are unable to manage their own affairs.

An LPA should arguably be an essential part of the financial planning process for any person opting for income drawdown when they retire. Currently, there seems to be limited usage of LPAs alongside income drawdown arrangements, which could be a recipe for problems in the future for those without an LPA.

Putting an LPA in place is a sensible step for anyone considering an income drawdown arrangement.

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New Intestacy Rules – What do they mean?

1st Oct 2014
Today new rules come into force for the laws covering people who die without a will. ...
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New Intestacy Rules – What do they mean?

1st Oct 2014

What are the new Intestacy Rules and who do they affect?

Today, sees new rules come into force for the laws governing what happens to someone’s assets when they die without a Will (intestacy law) and who can make a claim against an estate.

One of the controversial parts of the new rules is around the modern family i.e. who receives what if you were co-habiting. Many professionals were pressing for those in unmarried relationships to receive a portion of their partner’s estate if they die without a Will.

At present, unmarried partners are legally entitled to nothing even if they share children or have cohabited for many years. The new laws do not change this. Die without a Will and your partner receives nothing. Their only recourse is to make a claim against your estate.

Having covered what is not changing, what actually does change?

One of the biggest changes is for married couples and civil partners without children. Under the old rules the survivor received the first £450,000 plus half the rest. The other half was split between blood relatives according to strict rules. Under the new rules the survivor receives everything.

For married couples and civil partners with children the theory of “life interest” is now eradicated. The new rules are significantly simpler, with the survivor entitled to the first £250,000 plus half the remainder. The children share the rest. Previously the spouse only got a life interest in half the remainder i.e. they received the income from their half but the capital was protected for the children.

Finally, one of the other significant changes is to the scope of people who are entitled to claim against your estate. As well as redefining who is classified as a dependant the new rules now recognise the ‘blended family’. For example, your partner’s child can now claim against your estate as if they were your child. Even if your partner died before you! Although, it’s worth mentioning that, this doesn’t automatically mean they will be successful if a claim is made.

The changes to the intestacy laws once again highlight the importance of making a Will. If you want to choose who inherits you need to have a Will. Furthermore make sure it’s up to date and relevant.

Above is just an overview of the main changes that will affect decisions when making a Will. There are other technical changes, including certain powers of Trustees, that we have not mentioned.

Please let us know if you or your clients require any further information.

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NEW code of conduct for Will preparation

15th Jun 2014
In response to the UK government’s decision not to regulate Will writing STEP has launched a new Code of conduct for Will Preparation. ...
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NEW code of conduct for Will preparation

15th Jun 2014

In response to the UK government’s decision not to regulate Will writing STEP has launched a new Code of conduct for Will Preparation that all STEP members who prepare Wills MUST adhere too.

Only STEP members can claim to be compliant with the code which sets out standards of transparency and service that a client can expect when using a member. This reassures a client that they are getting the best level of advice and service when doing a Will.

Some areas addressed in the code include;

  • Pressure to appoint the Will company as executors in the Will
  • Selling of unnecessary complex Wills
  • Misrepresenting the consequences of not making a Will
  • Obtaining advance payment for probate plans
  • Inadequate storage facilities

All Pavilion Row‘s Will advisers and Will drafters are members of STEP and are therefore bound by the new code.

When STEP announced the launch of the Code Geoffrey Shindler OBE TEP, STEP President , commented: “The Code will, I hope, become the hallmark to which all aspire when drafting wills. It is a condition of membership that we all adhere to the code, but it should be seen less as a burden and more as a positive benefit. It will demonstrate to clients, the public, to the government and to regulators that we are of a gold standard when it comes to preparing wills for individual clients.”

Pavilion Row see this as a very positive move forward to improve the quality and level of service within the Will industry. It will, we hope, help to eradicate ‘cowboy Will writer’ behaviours, practised by a very small minority, that are currently tarnishing the industry.”

Since the launch of the STEP Code the SRA have launched new non-mandatory guidelines for solicitors who prepare Wills.

The guidance has a focus on professional ethics and behaviour and includes;

  • NOT misleading a client to believe they have to retain a solicitor to write their will, or that it is the norm.
  • NOT as a default position appointing themselves as professional executors
  • The solicitor not encouraging the client to appoint them as executors unless there is a clear reason to do so e.g. it is likely to be contentious or complex

Whilst only STEP can guarantee a true level of qualification in this niche part of law we see that the STEP Code and the SRA guidelines are setting the path to creating a much fairer and transparent service for the clients

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Minimising the Risks of Inheritance Feuds

2nd Apr 2014
It is a simple fact that the number of probate claims continues to rise year on year. There are, in my experience, four major reasons for this. ...
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Minimising the Risks of Inheritance Feuds

2nd Apr 2014

Why do estates become contentious?

Guest Article – Martin Holdsworth, Jones Myers LLP

It is a simple fact that the number of probate claims continues to rise year on year. There are, in my experience four major reasons for this:

  • Too many people die either without a Will or an out of date Will. The Intestacy Rules then rarely allow for the distribution of an estate to provide for a family in the way which the deceased wanted. Without any kind of agreement between ALL the beneficiaries (assuming they are all over 18 years), an application to court is inevitable.
  • Many family units now include step-parents and step-children (the blended family unit). Extra care is needed when advising members of blended families as to the obligations that may exist across the whole family unit and perhaps most importantly how those obligations are met after the first parent’s death.
  • Individuals are now, on average, living longer. Figures from the Office of National Statistics demonstrate that life expectancy over the next 50 years will increase by an incredible 8 years; to 87 for men and 90 for women. With an aging population the incidence of dementia increases and with it allegations of failing capacity and Will challenges.
  • The final significant factor is the reality that, due mainly to house price increases, estates are now worth more than ever before. An inheritance or lack of one can make a huge difference to someone’s financial and emotional wellbeing and it is no surprise, that in a more litigious society, claims are investigated to challenge testamentary provision.

It follows, therefore, that when someone makes a Will, the person they use must give careful consideration to areas where claims are likely.

“With care and knowledge, it is possible to identify and minimise the risk of post-death litigation.” Martin Holdsworth – Jones Myers LLP

The best start point for this is undoubtedly to know your client and understand not just the extent of their personal wealth but also their family dynamics. From this the client must be made aware of the consequential obligations of their circumstances which arise in all manner of ways, some of which may not be obvious.

Whilst testamentary freedom exists, consideration must be given to anyone where the will maker has created a financial obligation. Some are obvious – a spouse, cohabitee or any children still in education for example. However, some are not. I have been involved with claims by ex-spouses, ex-cohabitees, tenants (living rent free in a property owned by the deceased), adult children, mistresses and other individuals who were maintained financially in some form. Seeing a client away from their spouse can make disclosure easier.

Before full advice can be given in regards to a Will it is crucial that proper instructions are taken and recorded. The instructions given must be comprehensive, the Will Adviser must be satisfied that the person has appropriate mental capacity and consideration must be given to the person’s various obligations.

There is little doubt that probate litigation will continue to increase but by ensuring your clients seek proper advice when doing a Will they will have awareness of where claims can lie and reduce their chances of such litigation.

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What about my inheritance?

13th Mar 2014
When a marriage breaks down and it comes to dividing up finances often people often ask 'What about my inheritance?' ...
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What about my inheritance?

13th Mar 2014

When a marriage breaks down and it comes to dividing up finances often people often ask ‘What about my inheritance?’

Guest Article – Angela Moore, Jarvis Family Law

During a marriage, particularly a lengthy marriage, it is very possible that one or other spouse may have received significant monies from the death of a parent which have been put towards reduction of the mortgage on the home, purchase of buy to let investment property or maybe a holiday villa in Spain.

The question is then raised ‘Does that money or property come back to me as it was from my parents?’

In short the answer is not necessarily. The ability to “ring fence” an inheritance will depend upon when it was received, how much it amounted to, what the other assets that are available for division, and what the respective financial needs of the parties are particularly for rehousing.

Whether you are trying to protect an inheritance upon divorce or claim against inheritance wealth, legal advice is certainly worthwhile.

Angela Moores says “a High Court case published during August 2011 known as AR v AR examines this topic once again. The principle of fairness is referred to throughout that case. What however amounts to fairness will vary from one case to another and from one person’s perspective to another”.

There is no mathematically exact calculation that can be done and each case is different- hence the need for expert family law advice at the outset to set everyone on the right track as to their expectations.

Another question asked around this inherited wealth issue is ‘What about any amount my spouse is going to receive post divorce from parents who are not yet deceased?’

An asset cannot be considered to form part of the assets for division on divorce unless and until it actually belongs to one or other of the spouses. Therefore something that may or may not happen in the future (such as the receipt of an inheritance) cannot be taken as certain and cannot be taken into account. The parent may need to utilise their monies for residential care prior to their demise. Similarly the parent may determine to spend spend spend on cruises, high living and enjoying their final years. Generally, an inheritance has no certainty or entitlement until a person dies.

In answer to the question posed, it may be if a death is anticipated in the short term, that some form of contingent payment could be built into a settlement. If a settlement is not a “clean break” settlement (ie there are ongoing financial responsibilities between the spouses such as maintenance payments) then once an inheritance falls in, such ongoing issues can be revisited. However the benefit of a “clean break” deal is that each party is free to go forward in life without the risk of further claim from the other and that includes on any future inheritance.

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Planning your digital afterlife

4th Feb 2014
What happens to your digital assets when you die? ...
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Planning your digital afterlife

4th Feb 2014

What happens to your digital assets when you die?

Our lives in regards to who we are, what we do and what we own are increasingly managed digitally.

Any assets managed digitally, i.e. accessed or held online, are referred to as digital assets. These can range from online gaming accounts, to photos, digital music, bank accounts, domain names, cloud storage etc, etc.

Should you die the duties of your executors in relation to digital assets, as with any other assets, are to identify them and arrange transfer to beneficiaries or sell them. However;

  • How do the executors know the assets exist?
  • Are the assets worth anything?
  • Can the executors access the accounts?

As your Will is usually stored securely you could incorporate details, including passwords and usernames, within it. However this is not very practical; every time you change something you would need to change your Will.

The key is that people know the assets exist. A simple list stored with other important documents will at least tell your executors what you’ve got and where to find it.

But are these assets worth anything?

It has always been common for people to leave books, CDs, vinyl collections etc to someone in their Will but what about online versions? Buy music from iTunes and you don’t own it; you simply have a perpetual licence to play the music. The licence is personal and not transferrable. In effect you are just renting it. Similarly digital book providers, such as Kindle, prevent a purchaser from passing on e-books or sharing passwords.

By contrast online games may have a value especially where a lot of time has been spent accumulating a character’s skills, weapons, money etc. Websites such as www.armorybids.com run auctions of gaming accounts allowing you to sell on these characters.

However digital assets are of no value if nobody knows they exist. Frequently forgotten digital assets include loyalty programmes such as air miles which CAN often be transferred.

But how do my executors access the accounts?

The law in this area has been slow to catch up with technology. Currently accessing the deceased accounts with their username and password may mean the executor is committing fraud!

Many companies providing online services have created their own polices for dealing with deceased accounts such as Google’s ‘inactive account manager’. There are also online password storage facilities, like Password Box, with legacy features but these still don’t resolve the issue of whether or not your executors can access your accounts. The problem is there’s no set approach.

In a bid to resolve this issue STEP has created a Working Group to look at access, control and ownership of digital assets when a user dies or is incapacitated. The intention of the group is to create a protocol that can be adopted by all online providers. The challenge will be how, when this is an international market, to create one approach that can be adopted globally.

This is an increasingly important issue with, as yet, no definitive outcomes. We will keep you updated as things develop.

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What’s domicile? And why does it matter?

18th Dec 2013
The question of domicile is fundamental to how a person’s worldwide assets are taxed in the UK during their lifetime and on their death. ...
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What’s domicile? And why does it matter?

18th Dec 2013

Guest Article by Louise Battison, Chartered tax Adviser with Tax Perspective

The question of domicile is fundamental to how a person’s worldwide assets are taxed in the UK during their lifetime and on their death. It is particularly important that the issue of domicile is considered whilst the client is alive and able to arrange their financial affairs tax efficiently.

A person domiciled in the UK is subject to inheritance tax (IHT) on their worldwide assets. A person who lives in the UK but is not domiciled here will only be subject to UK IHT on their assets situated in the UK.

Sometimes it is easy to make assumptions about a person’s domicile position but because of the complexities of law those assumptions may not be correct.

“A common belief is that a person’s domicile is simply based on where they live or where they where born but this is not always the case.”

A child usually obtains their domicile from their father, regardless of where the child is born or lives. A child born in the UK to a father domiciled in India will have a domicile of origin in India. However, if the father changes his own domicile before the child reaches the age of 16 then the child’s domicile also changes.

Therefore, you may find you have to establish your client’s father’s domicile before you are able to establish your client’s domicile with any degree of certainty.

However, to counter potential tax avoidance HMRC have a concept of ‘deemed domicile’. If an individual is in the UK for 17 out of 20 tax years HMRC will deem them as domiciled in the UK and their worldwide estate will be subject to UK tax.

This means it is usually difficult to do any IHT planning based on a person being non UK domiciled if they have been in the UK for 17 or more of the last 20 years.

A few countries, including India, Pakistan, France and Italy, have double tax treaties with the UK that were written before ‘deemed domicile’ was introduced. The treaties with India and Pakistan offer the most scope for effective IHT planning and you don’t need to have been born there to make use of this.

If your client has lived in the UK for many years but their father was domiciled in India or Pakistan and they can illustrate that they don’t have any permanent intention to stay in the UK, you could save them a considerable amount of money through effective estate planning.

Importantly they must have an English Will for their UK assets and a non-UK Will to ensure their non-UK assets don’t pass through the UK Will. This must be done correctly and professional advice should be taken to ensure that one Will is not revoked by the other.

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