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February 28, 2017

Should I Choose a Lifetime ISA?

On 16th March 2016 George Osbourne created the lifetime ISA. This new arrangement is aimed at anyone from the age of 18 to 40 and offers appealing benefits from anyone looking to buy their first home all the way to to saving for a retirement. In this short guide we are going to provide basic current information about a lifetime ISA.

Who can use this ISA?

Anyone between the ages of 18 and 40 will be eligible to open a lifetime ISA as of from April 2017. Even though you are under the age of 50 you can choose to contribute up to £4,000 a year and will receive an additional 25% government bonus. So for every £4 contributed the government will add a further £1. (up to a maximum of £1,000 a year)

lifetimeISA-18134__340Who would be best suited for the lifetime ISA?

This ISA is best suited to people either saving for their first home or saving for their retirement.

If you are using the ISA to save for your first home, you can use the funds in the ISA (as well as the government bonus) to buy a home in the UK of up to £450,000. In order to qualify for the government’s bonus you will need to have had the lifetime ISA for at least 12 months.

This is perfect for anyone who is looking to buy his or her first property after 6th of April 2018. If you were hoping to buy with a partner both individuals (under the age of 40) would be able to open a lifetime ISA meaning you can both benefit from the bonuses involved if the property is bought together.

If on the other hand you are saving for retirement you could also benefit from a lifetime ISA. You can make withdrawals partial or full, after the age of 60 with no penalty. All the money withdrawn is tax-free too. If you wish too you can also save in other accounts such as pensions too.

What happens if I already have a help to buy ISA?

If you are already using a help to buy ISA you can transfer across to a lifetime ISA. From 5th April 2017, you will be able to value your current ISA and transfer the value over to your new lifetime ISA. The amount transferred won’t count towards the £4000 allowance and you will still qualify for the government bonus. This offer will apply till 5th April 2018 and only one transfer can be made.

If you have any queries about starting a lifetime ISA and want to know some more information, our financial advisors at Bespoke Support Network will be happy to help. It’s vital to choose the correct ISA for you and the most efficient tax vehicle for your savings. Call us today for free advice and we will help to point you in the right direction.

 

February 26, 2017

How to Avoid Sideways Disinheritance

When couples decide to make a will they often think that it’s best to keep things as straightforward as possible. More often than not they leave everything to their spouse or partner in the event that they pass. This is usually so that their partner can continue to live in the same house and have access to all their finances.

Typically a couple consider everything to be jointly owned even if something technically belongs to only one of them. As such, the wills in question probably state that whoever dies last would leave all their assets and estate to their children in equal shares. This sounds sensible and straightforward, don’t you agree?

Sideways DisinheritanceMost of the time it can be this simple, however this isn’t always the case. People don’t tend to consider the possibility that after the first person has died, the other partner could decide to alter their will. They could decide to leave their assets and estate to someone other than the children. This is particularly well known when there is a new spouse or partner.

Sometimes it can be an accident. When the surviving partner decides to remarry, the old will is automatically cancelled and the partner may not consider this. Following this, with no valid will in place, if the partner was to pass away the new spouse would be entitled to everything under the rules of intestacy.

This is called the ‘sideways disinheritance trap’. Meaning the estate moves sideways to the new partner rather than down in generation to the children. What started out as a simple option to protect your partner and spouse has now become the reason they are left with nothing.

However there are ways to prevent this from happening, which is where our services here at Bespoke Support Network could help. The first option is simple, protect your children by making sure you update your will when you remarry. This may sound like an easy fix but it can be scary how many people forget.

Another option would be to include a life interest trust in your will. This means that when you die all your assets will be automatically placed into a trust instead of going directly to your spouse or partner. The life interest trust can be managed by appointed trustees and will ring-fence your assets and name your ‘life tenant’. A life tenant will be allowed to live in your property and gain any income generated by your ring-fenced assets for the rest of their lifetime, or if you wish, until they remarry.

You could also make mirror wills. These are identical wills that ‘mirror’ each other so regardless of who passes away first, your wishes and intentions stay the same.

To discuss mirror wills or a life interest trust call Bespoke Support Network today. We have experts at hand who can support you with any advice you may need. Get in touch today for total peace of mind.

February 24, 2017

How Much Does It Cost to Make a Will?

People are often put off creating a will by the cost and time spent writing one. In this blog, Bespoke Support Network will look at different options and costs available to you, including making a will online, a DIY will and using a professional will writing company or solicitor.

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DIY Write Your Own Will

Writing your own will is ill advised as often incorrect wills will be deemed invalid and leave your family with a financial mess. However, if your affairs are particularly straightforward you can risk writing your own will (but be prepared if it is invalid). Your DIY will, requires you to follow the instructions given very carefully.

There are a variety of DIY will kits available online and in stores from retailers like Amazon & WHSmith, as well as online templates you can use. These will kits and templates cost between £9.99 and £14.99.

DIY Wills are not suitable if:

  • Someone who is unable to care for themselves is financially dependent on you.
  • Your wish to pass your assets is very specific.
  • You have children from a previous marriage.
  • You have young children, who will need a Guardian and Child Trust.
  • You have property overseas.
  • You own a business.
  • You want to reduce or avoid inheritance tax.

Professional Will Writer

In recent years, the most common option for people looking to write a will is to have it created by a specialist will writer. A professional will writer offer’s a personal service, being able to visit you at your home to plan the details of your will.

When it comes to making your will you ideally only want to do it once, especially as having it professionally written can cost you up to £100. However, by having it professionally drafted and written, you can ensure that you avoid any costly mistakes for your family and future generations.

Solicitor Written Wills

Family solicitors tend to deal with a range of client issues, from divorce to employment law, but not all of them are professionally qualified in wills and trusts. Make sure you choose a solicitor who specialises in these areas i.e. will writing.

In terms of cost, a solicitor can cost you up to £250 to draft and write your will. While it may seem expensive, using a qualified solicitor prevents there being any mistakes in your will, meaning your family can adhere to your wishes as you wanted them.

Bespoke Support Network aims to provide advice to businesses and individuals alike, everything from financial planning to wills and probate. For more information and help with your business needs, call us today.

February 22, 2017

A Guide to Updating Your Will

It’s scary how many people write a will, forgetting that every time something significant happens in their lives it is important to update it. There are many times in your life where this is required. It can be a common mistake to make, but an important one all the same. You may think it seems like an annoyance, or a task that you simply don’t have time or the money to do, but it can save a lot of heart ache and problems for your loved ones in the future.

Reasons to Update Your will

  • Marriage and divorce
  • Birth or adopting a child
  • Death of family members or beneficiaries
  • Your chosen executor can no longer serve or has possibly passed away
  • Your children are no longer minors and can deal with financial matters
  • Considerable Changes to your estate and assets

How do I update my will?

 updateyourwill-428331_960_720When it comes to updating your will, there are two ways of doing so; First, you could prepare a new will, signing it to revoke the earlier made will. Or you could write a codicil to the already existing will. This is a separate document that can add provisions to the will you have already written. It simply needs to be witnessed and signed just as your will was, to make it valid.

You can change anything in your will using a codicil, from a single word to several sections. But a codicil is often best used for smaller changes, as they can cause complications in the event of your death. Sometimes if you need to change several things in your will it is better to rewrite your existing will, especially as sometimes codicils can sometimes manage to get lost.

If you are going to rewrite your will, there are a couple of things to look out for. Ensure that you’re revoking any old wills and codicils. As well as this, you need to make sure you destroy any copies of your old will and tell your executor where your new will can be easily accessed for when the time comes.

Bespoke Support Network aims to provide advice to businesses and individuals alike, everything from financial planning to wills and probate. For more information and help with your business needs, call us today.

 

February 20, 2017

Bespoke Support Network’s Guide to Appointing an Executor

There are lots of things to think about and consider when writing a will. All these important decisions will affect your loved ones, so they need to be thought about and discussed so you are happy with the choices you have made. Therefore, one of the biggest choices you will need to make is choosing an executor.

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What is an executor and what does it involve?

Your executor is the person in your life you want to make responsible for handling the affairs after your death.  The role involves a lot of work, so it’s important to choose carefully. Some of this work, will include;

  • Gathering all assets
  • Dealing with any paperwork related to your estate
  • Making sure any debts are paid out of the money in your estate
  • Distributing the remainders of your estate to the allocated people in your will
  • Holding any assets or money if a beneficiary is under the age of 18, at the time of the death.

How to pick your executor

As you can see it’s important to pick and choose your executor correctly as this can be a huge responsibility, especially if the person isn’t used to carrying out official and financial issues. It’s recommended that you approach the person you wish to be your executor before going ahead, just to ensure that are okay to undertake this big responsibility.

Some advice on choosing wisely:

  • Normally its always better to have two executors rather than one. It just provides a safety net, or ‘back up’ in case your chosen executor passes away or was otherwise injured at the time of your death. Sometimes people appoint up to four executors.
  • Make sure the person you are appointing is willing and able to hand the tasks involved. Such as legal, financial and administrative issues.
  • If you are married or in a civil partnership, it is usually the case that your spouse or partner will be one of your executors
  • If you have children that are over the age of 18, it’s possible for them to be joint executors.
  • In a case where your children are under the age of 18, its advised that you choose a professional, for instance your accountant, as one of your executors.
  • If your need to appoint a guardian for any young children, it is often advised that you consider making this person one of your executors as well.

As you can see it’s a lot to think about, and this is only one of the big choices you must make. It can all seem very overwhelming at first but at Bespoke Support Network we are here to help. We understand the issues involved and as professionals we know the importance of any decisions made. If you need any advice or guidance contact us today.

February 18, 2017

Don’t DIY Your Will

 

Creating a will is an essential way to ensure that your savings and assets will be distributed according to your wishes, yet many people choose not to prepare one, choosing to create their own, because of the cost. A basic will could cost you around £100 – £300, but the bill could rise to £600 or more when you use a solicitor for inheritance tax advice etc.

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That’s why, for many people, a DIY will is a far cheaper alternative, typically costing around £20 from online retailers and high street shops such as WHSmith.

However, while these store-bought wills may look attractive in price, it can be a risky approach. For example, if any errors are made or the strict witnessing rules are not followed correctly, the document will be invalid.

An invalid document could have serious implications on you and your family in the future. You risk leaving your family with a financial catastrophe and what you’ve left behind could be eaten away by legal bills or taxes.

If a will is not drafted correctly, it can be challenged and leave your family ‘intestate’ i.e. without a will at all. If this happens then the rules of intestacy come into force, meaning the guidelines dictate how your estate is divided and so distant relatives could benefit rather than those who are closest to you.

When issues like this arise, your family can make an inheritance claim to try and change the interpretation or execution of the will, or if someone believes they have not been provided for in the will.

Figures from the Co-operative Legal Services (CLS) have suggested that poorly drafted or ineffectively written wills are the reason for prolonged probate ordeals for 38,000 families per year.

Along with these figures, the CLS announced that additional fees to cover for a poorly written will could absorb 10% of the value of a person’s estate. Therefore, with an average estate in the UK standing at £160,000 can you afford to waste £16,000-worth of probate fees?

At Bespoke Support Network we aim to provide you with advice and expertise concerning wills and probate, as well as other financial advice you or your business may need. For more information, please contact us today.

February 16, 2017

What is Probate?

Before next of kin or executors can start administrating a deceased person’s will, they will need to apply for probate, but what is probate?

‘Probate’ is the legal and financial process of dealing with the estate of someone who has passed away. It is used to describe both the Grant of Probate and the process involved in obtaining it, which includes:

  • Making an inheritance tax return to HMRC
  • Paying the tax due
  • Finalising income tax affairs and pensions
  • Collecting in the estate from banks, building societies and selling assets
  • Paying money due to beneficiaries, making any gifts of items to beneficiaries and preparing accounts for the estate.

In fact, there are actually two types of grant: probate and letters of administration. Probate is granted when the deceased left with a valid will, while letters of administration are granted where the deceased did not leave a will.

Who is Responsible?

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It is the responsibility of the executors named in their will to apply for Probate. In most cases, the executors will be family or friends of the departed but some people will appoint professional executors (a solicitor or will writer).

If there are no executors named or no will present at the time of probate, a blood relative or someone who would benefit from the will must become the administrator of the estate. The administrator performs the same tasks that an executor would but they will have no will to act upon.

The Process

Obtaining a grant of probate may not be necessary for estates of less than £15,000, or if the assets were held jointly and are passing to a surviving spouse or civil partner.

However, if you do need to carry out probate, the first step will be to identify all the deceased’s assets (property, investments and possessions) and all their liabilities (debts, loans and utility bills), in order to determine the value of their estate.

After paying the inheritance tax to HMRC and being issued the Grant of Representation, you will need to prepare the estate accounts, documenting all payments into and out of the estate as well as the balance left for distribution to beneficiaries. Providing there are no challenges to the estate or the will itself, then the final phase will be to gather the executors together and distribute assets in accordance to the will.

How long does Probate take? 

Depending on how complex the deceased’s estate is, it will take longer to process Probate of someone with multiple properties, shares and accounts than if they had owned a single bank account and very few assets.

It will also depend on how much time the administrators can dedicate to processing probate. If they’re able to take leave from work to deal with probate, they will be able to take care of it quicker.

On average, the process of probate normally takes between six to nine months and up to 80 working hours to complete.

Bespoke Support Network aims to provide advice to businesses and individuals alike, everything from wills and probate to financial planning. For more information and help with your business needs, call us today.

 

February 14, 2017

What Are Letters of Wishes?

What is a letter of wishes?

A letter of wishes is a document that accompanies your will when you pass. While the letter of wishes is not a legally binding document, it can guide your executors and trustees to ensure that all your personal wishes are carried out.

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Why should you make one?

A letter of wishes is particularly helpful in several situations, including the opportunity to explain why certain family members have not been included as beneficiaries. The main topics a letter of wishes covers is:

  • Who to Notify of Your Death
    The letter of wishes can help your executors or trustees as well as relatives address who to tell about your passing, and possibly who not to tell.
  • Your Funeral Wishes
    In your letter you may include as much or as little detail about your funeral proceedings as you want. From a simple request for a burial or cremation, to the specific arrangements for the service taking place. Often, people write down the specific hymns and music they want played, along with flowers to be used.
  • Personal Items
    If you have particular items that you want to pass onto special relatives i.e. precious jewellery or valuable keepsakes, then your letter of wishes can detail how your personal items will divided out to your specific family members.
  • Guardians

Particularly important to a letter of wishes is passing on the responsibility for looking after your children to their chosen guardians. In the event that you pass before your children are adults themselves, then your letter of wishes can provide guidance to your appointed guardians to help them care for your children.

How to write a letter of wishes.

There is not a standard answer for how the letter should be set out but you must try not to alter the terms of your will throughout the letter of wishes. Your will makes the legal decisions and your letter will give guidance to those left to deal with your final wishes.

Bespoke Support Network aims to provide advice to businesses and individuals alike, everything from wills and probate to financial planning. For more information and help with your business needs, call us today.

 

February 10, 2017

5 Common Wills and Probate Mistakes

Here are the most common mistakes people make on their Wills and Probate.

‘Common Lwriting-1149962_960_720aw Marriage’ Applies

Often, cohabiting couples will assume that their partner will inherit all their assets in the event of their death, if they don’t have a will. However, under the rules of Intestacy in England and Wales, if you and your partner are not married, the other partner will receive nothing from your estate. While they may be able to later claim against your estate or receive your share of a jointly owned property, there is no guarantee.

A Will is ‘Watertight’
It is often believed that a will cannot be varied or challenged after their death. However, there are a number of ways in which your will and estate can be challenged, and there is no guarantee that the wishes contained in a will are always carried out. However, there are ways to minimize the risks of a claim being made, for example if you were to ensure the will makes a reasonable provision for financial dependents.

Wills Don’t Have To Be Updated

A will usually reflects your circumstances when it is made, meaning if you are single and have no children when it’s made it is highly unlikely to make any provision for your spouse or children if you later marry and start a family. Therefore, as your personal circumstances change, you should always review your will to see whether or not it still represents your circumstances and wishes.

Bargains Are Always The Right Choice

Will writing is an unregulated industry in England and Wales, leaving individuals with many options as to how they choose to write it. The traditional option is to find a solicitor or professional will writer to draft a will for you. However, DIY will kits are just as popular for people wanting to write their own will. These can lead to the will being marked as invalid though so it’s important to take this into consideration first.

Time Limits Don’t Apply

Once an estate has been administered, it will become more difficult to recover the assets. If you have a claim against an estate or concerns about a will, it is important to raise these issues and obtain specialist legal advice as soon as possible, rather than waiting for several years. In some cases, the time limit involved can be as little as six months for the date of the grant of probate.

Bespoke Support Network aims to provide advice to businesses and individuals alike, everything from wills and probate to financial planning. For more information and help with your business needs, call us today.

February 8, 2017

What is Inheritance Tax?

Inheritance Tax, otherwise known as ‘the voluntary tax’, is a tax on the estate of someone who’s died.

Typically there is no Inheritance Tax to pay if;

  • The value of the estate is below £325,000 threshold
  • You leave everything to your spouse or civil partner, charity or club.

In 2015, the Inheritance Tax was changed to allow people to pass on more to their children or grandchildren without being taxed. However, a new limit is set to be introduced in April which will allow individuals to pass on estates valued up to £500,000 tax-free.

Both married couples and civil partners are currently treated as individuals, each allowed to pass on their full allowance. The allowance is also transferable even if one partner dies before April 2017.

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How does inheritance tax work?

Currently, each individual is tax at a rate of 40pc on all his or her assets above the threshold. This threshold is £325,000, but from April a new, higher threshold including a “family home allowance”, will begin to be phased in.

How will it change?

The new 2015 Budget introduced a new provision that allowed individuals and married couples the opportunity to pass on their main home with a smaller tax liability.

In 2017-18, the tax liability will be worth £100,000 but will gradually get bigger over the coming years.

However, there is a catch. This total must include a “family home”, which must be the main property. Buy-to-let and second properties will add to the total size of the estate as normal.

This means that married couples will be able to pass on estates worth up to £1m to their direct descendants, including a family home.

How will this affect my tax bill?

This change will bring down costs for all estate sizes including family homes. If you own a small estate you will still be exempt from inheritance tax, but larger estates which included family homes will have up to £140,000 extra tax-free allowance, for married couples.

The additional allowance will gradually be withdrawn for properties worth more than £2m.

Bespoke Support Network aims to provide advice to businesses and individuals alike, everything from financial planning to wills and probate. For more information and help with your business needs, call us today.