Wills, Trusts and Probate – experienced insight
Property expert Alex Goldstein talks wills, trusts and probate with legal expert Andrew Parascandolo of Powell Eddison Solicitors. He explains why people should make a will, and why they are not just for the rich. He tells us what intestacy means, and why dying without making a will could mean your money doesn’t end up where you want it. They also discuss Lasting Power of Attorney (LPA), why and when it is needed, and the effect of the coming increase in probate fees.
Wills, Trusts and Probate – experienced insight
Full transcript below:
Alex: It’s great to have Andrew Parascandolo from Powell Eddison Solicitors in Harrogate in the studio with me. Andrew thanks so much for coming in, today we’re just sort of talking through wills, trusts and probate and I think it’s often a misunderstood area of the law and again just to guide people through. The big hot topic at the moment as I see it is why should people make a will? Its very much out there and being talked about but I don’t think people have got a grasp as to why and what it entails.
Andrew: First of all, thank you Alex for inviting me to your show, very kind of you. Yes, I think it is a very hot topic. The statistics say that around 50% of the population don’t have a will. They still see it as an almost a myth that people think that wills are only supposed to be dealt with by the rich. Certainly not, we do regularly advise clients to make a will, they don’t have to cost lots of money, they can cost a few hundred pounds depending on the type of will. Essentially a will, what it does is it details what happens with your estate after you die. So, things like your money, your personal possessions, properties, what happens to them after you die. Essentially if you don’t leave a will, it’s the law and the laws of intestacy to decide how an estate is dealt with, who deals with it and how its distributed.
Alex: So, its effectively your estate could effectively just get past to the Government if you don’t have a will?
Andrew: Yeah, I mean essentially its not as drastic as that. A lot of people think it is but under the rules of intestacy it goes down the bloodline. So, it would be things like siblings, sons, daughters, partners etc. Mainly wives not partners. The will allows you to decide how your estate is distributed, it’s not the laws of intestacy so as I say because they are literally a few hundred pounds to put together its really important for people to make wills and have them regularly updated. We generally say around five to six years to review your wills.
Alex: Yeah, I agree, and the other major buzzword out there is a LPA or a lasting power of attorney and again it’s a phrase thrown around and very much involved in the will sector. Just talk everyone through that, what it means, what it actually entails and why you should actually look at it fairly strongly nowadays?
Andrew: Yeah, I mean in my view I always look at it like this, a will is how to deal with your estate after you die and that deals with things like incorporating step children, you may want to exclude family members, you may want to appoint guardians for young children etc. deal with remarriage, divorce as well as estate planning. Lasting powers of attorney are essentially the way of administering your estate whilst you are alive so that if you are unable to make decisions about your property, your finances, your bills etc. not just because you’ve lost capacity, it may be that you’ve lost mobility and then the lasting power of attorney is a really good way of doing that. A lot of carers essentially have the buzzword of lasting powers of attorney, go and make one its really really important. Now the first thing that I say to a client when making a lasting power of attorney is why do you need it? That’s really why people come and get advice abut lasting powers of attorney.
Alex: So, if for example I suddenly get knocked on the head and I’m in a coma or something and I didn’t have a LPA, or something set up in my will how would it then work? How could someone take charge of my financial affairs? Is there a process someone needs to go through? How does it work?
Andrew: Let’s look at it slightly differently. A will deals with your state after death and that only becomes valid when you die. In terms of a lasting power of attorney, that is whilst you are alive, that comes to an end upon your death and that is when the will takes over. So, if for example you were god forbid taken ill or run over by a car and had mobility problems and maybe capacity problems, if your spouse or a family member didn’t have a lasting power of attorney and needed access to your funds they would have problems doing that. It just depends, people have different estates, have different combinations of how they hold their money. They may be joint accounts, they may be single accounts and it’s just really talking to the client and not everyone will need a lasting power of attorney.
Alex: This is a fantastic point Andrew, the phrase LPA, lasting power of attorney, gets thrown around sort of fairly freely actually it’s not necessarily right for all and sundry. You need to speak and talk it through in detail because actually it may not be the right options. How does it work? You hear quite a lot in the news about wills being contested and other family members, I know you slightly joked and said well you know one member of the family has been left out of the will and it all gets into the news, obviously these tend to be very high-profile cases. With your experience and knowledge of the sector, do you find that this is a growing area and what’s the reason for it, has there been a change in the law, or why is that? Or is it just the media?
Andrew: Contested probate has increased in the last 24 months by 2000% and I do think that a lot of it is to with, there is a case that’s just been in the media which is Ilotts Mix and essentially that was a case where by a lady was estranged by her daughter for a period of 20 odd years, she then made a conscious decision to distribute her estate to charities, her daughter contested that and was awarded a amount of money by the judge, she was then not happy with that so appealed it, the appeal judge effectively increased the amount of money that she got and then the charities then appealed to the supreme court, now the supreme court has now ruled the appeal was not correct and has reduced the amount back to the original amount. So, in my view that case really is a case that sits on its own facts. It did attract a lot of attention, it did attract a lot of empathists for contested probates and contested wills, however in my view that is a victory for testimony freedom. At the end of the day people should be allowed to leave their estate how they feel fit as long as they have been properly advised. That’s the problem, we need to make sure that your listeners are properly informed that they need to just sit down with someone, it need not cost them lots of money to sit down and find out what their objectives and someone will weigh up the pros and cons.
Alex: A great insight there Andrew and obviously bolted on the back of this is probate, again a term widely thrown around. Just loosely, just talk everyone around what it is, why it exists and how to actually navigate through it all?
Andrew: I mean essentially probate is the administration of an estate after someone passes away. It is the formal application of the grant of probate if you leave a will. If you don’t leave a will its something that is called letters of administration and essentially it is a series of documents that allows you to proceed with the estate. The grant of probate once obtained allows bank account to be closed and the money to be collected, properties to be sold. The one thing that I do want listeners to be aware of, which has not been publicised very much is that the probate fees are just about to increase. I think that will have an impact on how people deal with their estate. There will be estates whereby people try to reduce the risk of this increased tariff by making decisions such as trusts, they may decide to reduce their estate by the use of trusts. It will also put executives in difficult positions simply because they will need to fund this new tariff which in some cases will be really difficult.
Alex: I’ve got to say some amazing insight and some great sort of tips for everyone. If anyone did want to get in touch with yourself or your team at Powell’s to talk through wills or probate trust aspect to talk through their personal circumstances. What is the best way to get in touch?
Andrew: Well thank you for that, it’s my pleasure. If people want to come down and speak with us we offer a free consultation period, it doesn’t cost anything, it’s free of charge, where people sit down with is and we then talk through their objectives. Another thing I would say is we’re no longer on 14 Albert Street, we’ve moved, we’re now at Raglan House on Raglan Street and we are having our official office opening on the 29 March at 5 o’clock, so we invite all of our clients to come and see us, those that can to maybe sit with us and maybe have a drink, a glass of wine or some champagne or some orange juice and to meet the team and the rest of the new team that’s come on board. The telephone number is as it always was so its Harrogate 01423 564551 and the website address or email address is firstname.lastname@example.org and you can visit our website at www.powell-eddison.co.uk
Alex: Andrew, can’t thank you enough, fantastic information there and thanks for coming on.
Andrew: Thank you for inviting me.