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An Introduction to Private Client Law: Navigating Wills, Trusts, Estate Planning & Inheritance Tax — Transcript

by RIAA Barker Gillette · 6,723 words · 949 segments · language en · Watch on YouTube

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0:00all right we're going to get it we're
0:01going to get started um thank you for
0:04joining today this is a part one of a
0:06two-part webinar series with an
0:09introduction on Private Client law my
0:11name is Casey neelen and I am the head
0:13of the employment team here at dragon
0:15arent and I'll be asking today's
0:17questions I'm joined by James McMullen
0:20who is the partner and who sorry who is
0:22the partner and head of Private Client
0:24at R Barker Gillette um and he'll be
0:26helping us navigate today and answer
0:28your questions on Wills trusts inher
0:30inheritance tax and tax planning um the
0:34recording the webinar will be recorded
0:37um and it will be available on our and
0:39on on our and on Rio barket Gillette
0:42websites so feel free to take a listen
0:45back after this webinar and please type
0:48any questions into the chat box we'll um
0:51approach them at the end of the webinar
0:54and answer them then so let's dive in hi
0:57James how are you doing hi I'm well
0:59thank you you Casey thank you for
1:01inviting me along this morning thank you
1:03um so let's start why should business
1:06owners or anyone for that matter have a
1:08will okay I I would say there are three
1:11main reasons for having a valid will um
1:16firstly uh a person dying without a
1:18valid will the intestacy rules will
1:20apply and they are automatic succession
1:24rules which are imposed by Statute
1:26they're quite rigid and uh they don't
1:30really cater for today's modern family
1:33structures um in fact what can happen is
1:37that there's a risk that the estate will
1:40pass to persons that you would not want
1:42to benefit um secondly uh the intestacy
1:47rules also do not make provision for
1:51full use of the exemptions allowances
1:53and reliefs under the inheritance tax
1:55legislation uh so you know if if we take
1:59for example example the typical family
2:02husband wife and
2:04children and say it's a 1.2 million
2:07pound estate which is not large by
2:09today's
2:10standards and husband dies the surviving
2:14spies will receive the personal chattles
2:17personal possessions uh a statutory
2:20Legacy of £
2:22322,000 and one half of the residue uh
2:26the other half of the residue goes to
2:28the children on statutory trusts and
2:31that would result in a tax bill of
2:34approximately £45,000
2:37uh and so finally um third reason I
2:41would say for making a valid will uh is
2:44that quite often you find without a
2:47valid will there can be a probate
2:49dispute within the family so it's an
2:51opportunity really uh to um decide what
2:56you want to happen with your estate so
2:59really you know not having a valid will
3:01I would say is is a disaster waiting to
3:04happen and So to avoid potential
3:06disasters that you've just mentioned
3:08what is State planning do you recommend
3:10happens so I would say it's it's far
3:13better to sit down with a private client
3:15lawyer a specialist in wills and trust
3:18drafting uh who will be able to assist
3:21you in identifying your objectives and
3:24priorities who you should benefit and to
3:27what extent um and and also just you
3:30know so that your loved ones uh will
3:33will remember you as someone who did the
3:36right thing um if we go back to our
3:40example of the married couple uh with
3:43the uh the uh 1.2 million pound of State
3:48uh and they make simple Wills gifting
3:50the entire state to each other remainder
3:53to the children that will result in uh
3:56no tax bill on the first death um and
4:00possibly no tax bill or perhaps a very
4:02small tax bill on the second death if
4:05all the exemptions and allowances can be
4:08claimed um I would also say that you
4:11know making a will is an opportunity to
4:14structure your Affairs in the most tax
4:16efficient way possible uh on death but
4:20also it's an opportunity for us to have
4:22a discussion with our clients and
4:26consider any possible additional
4:28lifetime estate state planning steps
4:30that they might want to take and may be
4:32available to them particularly if you
4:35have business owners uh or Andor High
4:38net worth clients um you know we can
4:41advise them on the various alliances
4:43exemptions and reliefs available under
4:45the inheritance tax
4:47legislation that's great great so after
4:50you have sat down with a client and
4:52identified their objectives for making
4:54their world planning their estate do you
4:56just write it down on a piece of paper
4:58is it a one will foot all approach or is
5:01each will
5:02unique um well there are various
5:05different types of will structures to
5:06suit different family Arrangements um I
5:10would say that each each will is uh
5:13unique to that individual um it's
5:16important you know going back to the
5:18intestacy rules to bear in mind that the
5:21the intestacy rules were created and
5:24developed around the traditional family
5:27the husband wife children scenario uh
5:29They Don't Really cater for uh the the
5:32Modern Family Arrangements the law moves
5:35very slowly and hasn't really caught up
5:38with these changes that we've seen to
5:41society over the past 20 to 30 years um
5:44so it's more important than ever that
5:46you've got a will in place that that
5:48suits your family's needs um going back
5:51to the you know the various structures
5:53of family out there you've got if you
5:56think about it you've got your
5:57conventional family husband wife
5:59children you have second marriages with
6:02children from the first marriage uh or
6:05previous relationship you've got Blended
6:08families uh you've got cohabitees who
6:11are not in a marriage or civil
6:13partnership so you know the all these
6:16different structures need to be catered
6:18for um we we still meet clients even
6:23today uh you know who talk about their
6:26common law husband or wife uh and this
6:29is not a concept that's recognized under
6:31English law and so for example if you
6:34have a couple like this and one of them
6:37dies the surviving partner cannot
6:39benefit at all under the intestacy rules
6:43if there is no Will Made in that
6:45situation um I should just add that we
6:48can advise clients on Sharia compliant
6:51Wills as well uh which are Wills uh
6:54which are made in line with the rules of
6:56succession under Islamic law um but just
6:59uh thinking about other things other
7:02reasons why you might want to make a
7:04will uh if you've got minor children or
7:08a disabled uh person in the home or
7:11someone who's just vulnerable it it may
7:14be worth thinking about putting a trust
7:16structure in place to provide for them
7:20you know their support and assistance
7:22going forward when when you're not there
7:25um and and you know trusts can also be a
7:28very useful way to manage family wealth
7:31and provide that level of protection to
7:33a vulnerable person that's great thank
7:36you what other things are there to think
7:39about when you are when a client of ours
7:42or any individual is thinking about
7:43making a will okay so um I would list a
7:47number of things here um just taking our
7:51our standard will structure and working
7:53our way down first of all who would you
7:56want to appoint as the executives and
7:58trustees of your will um you can appoint
8:02your spous children over the age of 18
8:06um you can appoint relatives friends or
8:09professionals or a combination of those
8:12um the maximum you can appoint is four
8:15people or you can have a trust
8:17corporation which is a a specialist
8:19company created to provide that level of
8:22service um but also think about the the
8:26health and the age of your appointees
8:29are they going to be around when you
8:31need them um uh think about for example
8:36uh their skill set you know are they
8:38good money managers will they be able to
8:41bring any other relevant skills to the
8:44table legal skills perhaps to the job um
8:48but also I would say really important uh
8:50also is the personalities of your
8:54appointees uh you want to avoid a clash
8:57of personality if possible because that
8:59can cause other problems in the
9:02administration of the estate uh I had I
9:06had a case uh not so long ago involving
9:10two brothers uh who were appointed as
9:13the executiv of their mom's will and
9:16they simply did not get on so we had
9:20great difficulty in that situation one
9:22brother was particularly hard to deal
9:25with uh he would not cooperate with his
9:28brother or with my firm we did try to
9:32resolve the matter amicably but in the
9:34end we had to make an application to the
9:36court for his removal as
9:39executive uh the matter was eventually
9:42resolved uh when we got to the door of
9:44the court and he backed down and so an
9:47order was made whereby he gave various
9:49undertakings to uh cooperate in the
9:53administration but obviously that was
9:55not before a very large legal bill was
9:57incurred uh of some
10:00253,000 uh which unfortunately went out
10:04of the available pot going to the
10:06beneficiary so they they lost out as a
10:08result of of his conduct so yeah really
10:11important to think about those sorts of
10:14things um next uh I would suggest uh
10:18appointing testamentary Guardians for
10:21infant
10:22children and uh obviously we're talking
10:25here about a scenario where both parents
10:27have gone which which is
10:29unlikely but it can happen and you want
10:32to think about again the personalities
10:35there because you know the the skills
10:37involved in raising family are different
10:39to that of an executive trustee so you
10:43don't necessarily want to appoint the
10:45same people as Guardians also as
10:47trustees uh and there is potentially a
10:50conflict of interest between those two
10:52roles uh so it's best usually to
10:55separate out those those particular
10:57rules um next I would suggest uh think
11:01about the structure of your will the
11:04perhaps the most important thing is to
11:06make sure that the will meets the needs
11:09of the family and secondary to that are
11:12tax issues you know trying to make the
11:14will as tax efficient as possible excuse
11:18me um we would usually sit down with our
11:21clients and ask them to provide us with
11:24a schedule of their assets and
11:26liabilities so that we can see the
11:28nature nature and extent of the assets
11:31and bearing in mind that certain types
11:34of assets qualify for certain specific
11:37exemptions and reliefs under the
11:39inheritance tax legislation uh so
11:41thinking about your business owners you
11:43know business property relief
11:45agricultural property relief uh and
11:47there may be others um next more complex
11:52scenarios so for example if you have a
11:55client who is foreign domiciled or their
11:58partner is foreign domicile that has tax
12:01complications which you need to work
12:04through um perhaps they have assets
12:07abroad and then the question arises
12:09should you make a will in that
12:12jurisdiction uh to cover those assets or
12:15will their English will cover the uh all
12:18of their assets
12:19worldwide uh digital assets this is the
12:22next big thing nowadays that we're we're
12:24dealing with if you have digital assets
12:27how will your uh how will your executiv
12:30be able to access them and that's a
12:32tricky one you know we are still
12:34struggling with that ourselves in the
12:36law
12:37um going back to business owners
12:40business interests think about uh how
12:44the business interest can be passed on
12:47so uh you know firstly the structure of
12:50the business are you a soul Trader in a
12:53partnership or a limited company do you
12:56need a shareholders agreement it will be
12:58important to look at the articles of
13:01Association of the company or the
13:04partnership deed there may be
13:06restrictions in there uh or conditions
13:09uh preventing the transfer On to the
13:12Next
13:13Generation Um so that needs to be
13:16considered um I suppose just thinking
13:19about succession issues generally if the
13:22plan is to sell the business interest to
13:26the existing uh partners
13:29then think about how they can fund that
13:33that purchase from the deceased person's
13:36estate uh for example do they have
13:38keyman insurance in
13:40place um yeah I think L lots of things
13:44there there there are a few other bits
13:45but those I would say are the main ones
13:47that was very detailed there a lot um as
13:49we said this webinar is recorded so you
13:51can always listen back and also get in
13:53touch with James if you got any
13:54questions um so what kind of will
13:57disputes do you come across cross and
13:59how could these have been avoided had
14:01people put Wills in place okay so um
14:05there are many types of will disputes um
14:09and uh that would be the subject of a
14:12whole other discussion so I won't I
14:14won't go into to those but as as I said
14:17above not not having a valid will in
14:20place can result in a probate dispute
14:24but so to can a poorly drafted will or a
14:26poorly thought through will um so uh
14:31really important to get good guidance
14:33and professional advice on that um
14:36probate disputes are hugely costly uh
14:39not only in terms of being able to uh
14:43resolve them the legal costs involved in
14:45resolving them but but also the huge
14:49damage caused to family relationships
14:52yeah uh by by such a thing um typically
14:55tens of thousands of pounds are spent in
14:58in resolving these disputes whereas you
15:01know spending a relatively small sum of
15:04money uh to get good professional advice
15:07and guidance to get a Good Will in place
15:10you know can save a family an absolute
15:12fortune in legal fees um we can also
15:16hopefully uh make some tax savings for
15:19the family through that process not to
15:22mention of course avoiding the stress
15:26and grief of appr probate dispute and
15:29legal battle at a time of morning yeah
15:31yeah absolutely yeah and once people
15:34have got a will in place what then are
15:37there certain requirements to make a
15:38will valid and
15:40binding okay so uh we have two questions
15:44here making a valid will binding um that
15:47is more really the uh
15:50responsibility of the professional will
15:53drafter making sure that the will
15:56complies with the formalities of section
15:59n of the wills act um so clients
16:02shouldn't really worry too much about
16:04that but going back to the previous
16:07question uh what things to think about
16:10when you've got a will in place uh I
16:13would suggest the following so firstly
16:16really important to make sure that your
16:17original will is safely stored and that
16:21you've got backup copies in another
16:24separate
16:25location um secondly think about perhaps
16:28registering the will with the national
16:32Wills register held by a company called
16:35certainty most law firms that specialize
16:38in this area are members of certainty my
16:41firm is a is a member of certainty and
16:43we provide that service to our clients
16:45free of charge uh and the way it works
16:48is that we will store the will in our
16:50safe store um the will is registered on
16:54the national Wills register and the idea
16:57behind it is it's like an insurance
16:59policy so if for example you make your
17:03will with me today we put it away in
17:05storage many years pass and uh 30 40
17:09years you're very young uh you you know
17:12you pass on and your family don't know
17:15where the will is or if you've made one
17:17they can't remember they can do a search
17:19of the national Wills database that
17:21would lead them back to our firm or its
17:24successor and uh the will can be
17:26produced for probate so um yeah so
17:29that's that's a really good idea uh
17:32thirdly um I think it's a good idea to
17:35speak to your executiv and trustees
17:37check that they're prepared to take on
17:39that
17:40responsibility um if they are then tell
17:43them where the will is stored and make a
17:46note of that for future reference uh
17:48they don't need to have a copy of the
17:50will some people like to do that but
17:52it's not necessary as long as they know
17:54where the will is
17:56stored uh and then I guess finally
17:58finally um we would suggest that you
18:01keep your will up to date uh your will
18:04and your financial Arrangements up to
18:05date so uh perhaps review your will
18:09every 12 to 24 months and always on the
18:12occasion of a major life-changing event
18:14so birth marriage civil partnership uh
18:18divorce separation disability death uh
18:22or indeed receiving a windfall you know
18:25an inheritance from a a parent or
18:27relative um and oddly enough these these
18:31um lifetime events some some joyful some
18:34sorrowful they can be an opportunity for
18:37further estate planning inheritance tax
18:40mitigation yeah that's great thank
18:44you um we've got some questions from the
18:47audience I think our chat box our chat
18:50is not working if you want to ask some
18:52questions in the Q&A then those we can
18:54read through um we've got a couple here
18:57which we'll start with and then if
18:58you've got any others feel free to push
19:01them through so the first one please can
19:03you explain the difference between an
19:05executive and
19:07trustees sure so um we we tend to use
19:11the terms interchangeably but really uh
19:14the role of an executive is to
19:16administer an estate so if you think
19:18about the process when someone dies it
19:21goes through probate uh you gather in
19:24the assets you pay the debts and you
19:27account to the beneficiaries for their
19:29inheritance under the will that process
19:31can take anything between you know 6
19:34months for a very small estate to two
19:36three four years sometimes uh but once
19:39the estate has been administered the
19:42role of the executive essentially comes
19:44to an end at that point now if there is
19:46a will trust so if if you've got minor
19:49children uh a disabled beneficiary
19:51whatever you've provided for in a trust
19:55the executors metamorphose into Trust so
19:58they will carry on their role in
20:00managing the trust for the the minor
20:03beneficiaries or whoever it may be so
20:05yes it's it's um uh they have separate
20:09defined rules but they can sort of carry
20:12on yeah and they can be the same with
20:13different people they can be the same or
20:15they can be different people exactly
20:17great thank you second question are you
20:20doing another webinar on Private Client
20:22law yes we are actually thank you for
20:24prompting that that was going to be
20:26something I was going to raise at the
20:27end um as I said this is part one of a
20:29two-part Series so we are doing a second
20:32one in March uh 15th of March which will
20:34cover lasting Powers of Attorney medical
20:37and financial lasting Powers of Attorney
20:39for business owners so for example who
20:42is appropriate person to appoint as an
20:44attorney um and as a business owner if
20:47you were to suffer any injury or lose
20:49capacity looking at potential conflicts
20:51of interest if you nominate your
20:53business partner as your um lasting
20:55power of attorney and then the third
20:57point that we'll be covering will be
20:58lasting powers of attorney for personal
21:00affairs so that will be part two webinar
21:03on the 15th of March so sign up as well
21:05if you'd like to attend and listen in on
21:07that that will also be recorded as well
21:09so don't worry if you can't make the
21:1015th of March you can listen back to it
21:13the webinars will be available on both
21:15our website and on R Barker gillette's
21:18website as
21:19well um we've got another question which
21:22is how often should you review SL renew
21:24your will I think we did briefly cover
21:27this but you can answer yeah so yeah as
21:29I was saying I would suggest um
21:32certainly uh every 12 to 24 months and
21:36always if there is a major life-changing
21:39event um I mean you know we we like to
21:42have an ongoing relationship with our
21:44clients so we're very happy if they pick
21:46up the phone to us and say this
21:49situation has happened you know what do
21:50you think and and you know we can have a
21:525 10 minute chat it might just be a case
21:55of giving them a bit of reassurance and
21:57tell telling them yes your will is fine
22:00leave it as it is carry on or it might
22:02be a case of saying well maybe you could
22:05think about this change this uh update
22:07the will in somewhere or other so yeah
22:09it's you it's horses for courses thank
22:13you um then we have got another question
22:18I have two granddaughters I want to make
22:20sure that they have the university pees
22:23fees sorry paid for uh when they
22:25graduate can I ensure that the fees are
22:28held in an account so that they that the
22:30money is only paid on graduation if I
22:32die before they
22:34graduate okay so I guess you're talking
22:37about creating a trust account for your
22:41grandchildren um yes I mean obviously
22:44again it's a case of ensuring that you
22:47appoint the right people uh that you
22:50know and trust or professionals if if uh
22:53if it's at that appropriate level uh
22:56where it's not going to be too costly to
22:58manage um but yes certainly uh that
23:01could be created in the form of a trust
23:04uh and managed for the grandchildren uh
23:07to pay school fees or whatever the case
23:09may be great thank
23:12you um another question oh lots of
23:15questions are there any changes in law
23:18or inheritance tax we should be aware of
23:22well unfortunately the uh the reality is
23:26that um uh there are often changes to
23:29tax law you know every time we get a
23:31budget we have to um scan the small
23:35print to find out because it doesn't
23:37always hit the headlines um I know that
23:40the government has been talking about
23:42making changes to inheritance tax um
23:46it's a wait and seee situation you know
23:48you just have to keep an eye out and um
23:51you know pick up any valid information
23:54that's out there and again as I said if
23:57if you're not not sure get in touch and
24:00um get some good good advice y um
24:03actually the James does james' company
24:07does send out a lot of great newsletters
24:09on the topics as well so if you were to
24:10sign up to their newsletters you'd be
24:12told as in when inheritance tax comes up
24:15or any other kind of updates
24:18yeah um a another question if you leave
24:21everything to your wife for example can
24:23you specify that certain elements of the
24:26resultant estate can be passed onto
24:28individuals chosen by the deceased I.E
24:31me how binding can this be um well it uh
24:35so if you make an outright gift to your
24:38spies then you cannot dictate what
24:41happens after that because it it it
24:44becomes in your spy's estate and it
24:46would be dictated by her will when she
24:48he or she eventually dies so um if you
24:52wanted to make provision for what
24:55happens after your spies or partner dies
24:58you then need a trust situation um so
25:03say for example a life interest trust
25:05providing for the spies or partner uh to
25:09be uh provided for by the trust during
25:12their lifetime and then after their life
25:14comes to an end the life interest comes
25:16to an end uh what happens then goes on
25:18to the the next next Generation okay
25:22thank
25:26you where there are business and family
25:29considerations should one just should
25:32one just use one Law Firm or would this
25:34be two different funds uh well I guess
25:38it depends on the law firms and whether
25:41they have the requisite expertise to
25:43deal with that um you know so um you
25:47know not every Law Firm covers all of
25:49the all of the areas of law some
25:52specialize um so it really just depends
25:55on the firm you're dealing with
25:58but you could do that you
26:00can okay I think I guess that question
26:04stems from if it's a business owner
26:06who's doing their personal will and then
26:08they also want to know I think with the
26:09things you mentioned about considering a
26:11shareholders agreement and articles yeah
26:13that's that combination yeah yeah um Can
26:16a deed of variation following eny create
26:20a life interest trust for property yes
26:23you can have a deed of variation uh to
26:26alter the terms of a will or the outcome
26:31of an
26:32intestacy um but it's not always
26:35possible to do a data variation so for
26:37example if you have minor children um
26:40you C you can't uh the the surviving
26:43parent cannot speak for the minor
26:45children their interests are separate to
26:47the parent uh you you would have to make
26:50an application to the court and the
26:53chances of that being granted are quite
26:55slim so again as I said that that's
26:57another very important reason why having
27:00a will is so important to to cover that
27:04situation does and does that create a
27:07lifetime trust or World trust I think
27:09that's a follow on from that question
27:11yeah so if if if it is possible to have
27:14a data variation um it you can you can
27:18create a trust through the data
27:20variation um so yes it is it is possible
27:23if um if for example the children are
27:27adults and can speak for themselves full
27:29age in capacity then they could you know
27:31they could sign the data variation so
27:34any everybody who's affected by the data
27:36variation would need to sign up to it
27:38voluntarily y okay thank you a two-part
27:43question one is money in a joint account
27:46considered part of my estate for
27:48inheritance tax purposes and two if the
27:52person my son moves some of the funds
27:54from the joint account to their personal
27:56account would those funds still be
27:58considered as part of my
27:59estate yes and yes so even though the
28:03funds are in a joint account um it
28:07doesn't necessarily mean that they're
28:09held 50/50 you know it could depend on
28:12the intention of the parties uh so for
28:15example if you have a very elderly
28:18parent and they put their son or
28:22daughter as a joint name on the account
28:24to help them manage the account that
28:27does
28:28uh the intention may have been that it's
28:30still my money but you're helping me to
28:33manage my Affairs pay my bills or it
28:36could be I'm giving you 50% of my money
28:39the the starting point is I suppose that
28:43money in a joint account is capable of
28:45being drawn down by either party to the
28:48to the account uh so you do need to I
28:52suppose really document what the
28:54intention is behind that um but
28:57certainly C even if the funds are in a
28:58joint account it is a requirement to
29:01declare that wealth as part of your
29:04estate on death that's a very good
29:06question I've got a joint account but
29:08note the intention um keeping
29:11inheritance in trusts versus other types
29:13of assets what is best and what is most
29:16tax
29:17efficient um that's a good question so
29:21excuse me we would we would certainly
29:23look at your your asset base and discuss
29:29with you what your objectives are here
29:31you know for example if you have a
29:34particularly valuable heirloom that you
29:37want to keep in the family then yes
29:39maybe a trust would be the best way to
29:41do that generally speaking we wouldn't
29:44put chat's personal possessions in trust
29:48um because there are other complex
29:50considerations there you know how how
29:53can that uh particular chattel be
29:56managed does does it need to be insured
29:58does it need to be maintained or
30:00repaired where will it be held how can
30:03the trustees ensure that it's protected
30:05for generations going forward so it
30:08carries other
30:10considerations um you know generally
30:13speaking trusts tend to hold uh money
30:17property Investments that sort of thing
30:20um can also be business interests yeah
30:23thank
30:24you are Gifts of money in inheritance
30:28taxfree uh well you're you're talking
30:31about the reliefs and exemptions here so
30:34um there are a number of options there I
30:38think possibly that's the subject for
30:40another uh another um video clip uh but
30:45you know taking some simple examples
30:47you're allowed to give away £3,000 a
30:51year uh to um anyone you wish that's
30:54your annual exempt amount from
30:56inheritance tax
30:58uh there are also small Gifts of £250
31:01that you can give to any number of
31:03people each year not in combination with
31:05the £3,000 gift uh once you go above
31:09that then you're looking at other things
31:11about potentially exempt transfers with
31:13a seven-year rule applies um Surplus
31:17income there's there's a number of them
31:19we would need to work
31:22through how can you get around people
31:24seeing Wells as published at some stage
31:27but I know ways around
31:29us okay so Wills are uh that when uh a
31:35will is admitted to probate it does
31:37become a public document so anyone can
31:41access a copy of that will uh there are
31:44certain people who will be able to
31:47restrict or prevent uh a will from
31:50becoming public um you know for example
31:54members of the royal family um uh uh
31:58that that would be appropriate um but uh
32:01it's it usually does become a public
32:03document so yes they need to be aware is
32:06that only when it's goes to probate only
32:08when it goes to probate not not before
32:09because obviously you can change your
32:11will at any time so you make a will
32:13today you can make a new will tomorrow
32:15next day it it's only the last will uh
32:19that applies at the date of your death
32:20the last will you make which is the the
32:23the valid one that usually goes to
32:24probate okay thank you
32:27[Music]
32:28and then do all assets automatically
32:31pass onto your wife/husband after death
32:34if there is no will if so can you
32:36specify what your
32:38inheritance will be spent on such as
32:41kids education uh well the answer to
32:43that is no they they don't automatically
32:45pass this is we were talking earlier
32:47about the intestacy rules and this is a
32:50reason why you want to have a will you
32:53want to give uh deliberate thought to
32:57who you want to benefit and uh and why
33:00and to what extent so you know the
33:03intestacy rules really do not cater for
33:07um certainly for wealthy families um so
33:11I would I would say you know always make
33:13a will it just just makes sense yeah you
33:15can specify exactly what you want in it
33:17then if the parents are residents in a
33:21foreign country and the children are
33:22residents in the UK and the parents hold
33:25Assets in a foreign country and the UK
33:28would the parent need multiple worlds to
33:30cover all countries would the children
33:32in the UK have to pay inheritance tax on
33:34all assets including foreign assets it's
33:36two questions that that's a complex one
33:39um yeah would I think you'd really need
33:41to work your way through that um what I
33:45would say in terms of foreign foreign
33:48wealth you need to look at the
33:50jurisdiction first of all um so a number
33:54of the European jurisdictions for
33:56example they have automatic rules of
33:58succession uh France and so on um um but
34:04it's it it's often the case that we
34:06would say to our clients you know get
34:09get advice from a lawyer in that
34:11jurisdiction to see what they suggest we
34:14can of course only advise on English law
34:18um but also yes the the question I was
34:22asking about you know parents are in one
34:24jurisdiction children are in another
34:26yeah the that that's a bit tricky and
34:28you need to work through the issues
34:29there it's it's not easy to um provide a
34:33sort of a one-off answer there I think
34:35you need to think about that one okay on
34:36that one definitely get advice yeah um
34:39most of our investments are under Eis or
34:43seis will the benefits of these carry to
34:45those I leave them to assuming held for
34:48three years yes so Eis uh investment uh
34:52Enterprise investment scheme and seis is
34:55seed Enterprise investment scheme I
34:57think so these are investments which
35:00qualify for inheritance tax relief uh at
35:04100% I believe after you've held them
35:07for two years three years um three years
35:10is it uh so um yes on once you've held
35:14them for the requisite period of time uh
35:17if if you're still holding them at the
35:19date of your death then they can pass to
35:22uh your non-exempt beneficiaries your
35:24children your grandchildren free of time
35:26thanks that's great it's a good one to
35:30know then this one thank you two
35:33follow-ups to my previous question how
35:35would you document the intentions
35:37accordingly so I'm assuming that would
35:38be in a will and I had opened the joint
35:42account five years ago is my
35:44understanding correct that in two years
35:46time the funds in the joint account will
35:47not be taxable given the seven-year
35:50rule um so the first question about
35:54documenting your intention um joint
35:57account it well it doesn't have to be in
35:59a will um you know you can do a separate
36:02side letter um and there are number of
36:05things that we would recommend going
36:08into a side letter you know we talk
36:09about uh creating um will trusts if it
36:14is a discretionary trust we always
36:16usually recommend a letter of wishes
36:19which is a separate private document
36:21addressed to your trustees executiv um
36:24setting out the reason why you've made
36:26made a will in that format what your
36:29priorities are and and other things that
36:31you wouldn't necessarily want to put in
36:33a in a will bearing in mind that the
36:35will becomes a public document once it's
36:38admitted to probate the letter of wishes
36:41is private it's addressed to your
36:43trustees it's not disclosable is that
36:46binding though it's not binding it's not
36:48legally binding but it's you expressing
36:50wishes um but if you wanted to make it
36:54clear for example uh I I think the
36:57questioner was talking about the joint
36:58bank account and and the intention
37:00behind that
37:02um simple letter confirming what the
37:05agreement is between the two of them
37:07signed and dated by both of them would
37:09address that issue great nice and clear
37:13yeah um can't trusts help people not
37:17knowing what is in your
37:19will um yes so if you were to do a fully
37:23discretionary will trust um
37:27effectively what you're doing is that
37:28you're passing the decision making on to
37:32your trustees rather than you deciding
37:35who's going to benefit and then you've
37:37got that separate letter of wishes on
37:40the side that's private which um where
37:43the trustees will usually comply with
37:45those wishes uh so it could be it could
37:48be kept like a private arrangement in
37:50that way
37:52y can we have access to this webinar
37:55recording to review G yes yes so
37:57webinars are recorded they'll be on our
37:59website and on Rio bar gillette's
38:01website as well um there is one more
38:04question which is from me for a personal
38:06question um so should I make a will now
38:10with my fiance or after we get married
38:14uh good question so um we well first of
38:18all it's worth bearing in mind that uh
38:22marriage automatically revokes a will
38:25under the wills Act uh and so if you
38:29were to make a will today and you get
38:32married tomorrow that will is revoked
38:35but to prevent that happening we can put
38:37a declaration at the top of your will to
38:40say that this will is made in
38:42contemplation of my forthcoming marriage
38:45and on that basis that rebuts that
38:46presumption and the will will remain
38:48valid after the marriage very intering I
38:50did not know marriages completely get
38:52rid of Wills that's good to know um I
38:55think that was all all oh no there's two
38:58more questions sorry these I think these
39:00will be our final two questions is there
39:02a standard for a letter of wishes was
39:04made 20 plus years ago and still valid
39:07but the odd picture now would be better
39:10to an
39:11individual um again good question so we
39:16have a we certainly have a template uh
39:18letter of wishes that we work on with
39:21our clients and it contains a number of
39:24I suppose prompts headings for them to
39:26think about um the good thing about the
39:29the will trust with the letter of wishes
39:32backing it up is that it's very flexible
39:35so you can create your will trust on uh
39:38you know today and and your letter of
39:41wishes but if in say 10 years time the
39:45family Dynamics have changed the
39:47beneficiaries you want to benefit under
39:49the trust have changed you can update
39:51your letter of wishes and you don't need
39:53to go back you don't necessarily need to
39:56signning you will yeah so it's it's a
39:59more flexible situation great thank you
40:03and final question can family members
40:05not in the world challenge it for
40:07example if I left everything to a
40:09sibling and not my
40:11spouse uh yes um the answer is that uh
40:16it's always possible to challenge a will
40:19I mean it obviously depends on the
40:22circumstances uh but we have we do have
40:25testamentary freed fre in this country
40:27to make whatever will you wish to make
40:30but uh that is tempered by uh we have
40:34something called The Inheritance act
40:361975 uh it's a very long title it's the
40:38inheritance brackets provision for
40:40Family Independence act
40:421975 and if you come within a certain
40:46category of people not everyone can do
40:48it um but certain category of people
40:51spouses ex spouses believe it or not
40:54children persons treated as children
40:56Children of the deceased Etc they may be
40:59able to make uh a claim against the
41:01estate on the basis that uh to quote the
41:04wording from the statute the will or the
41:08intestacy does not make reasonable
41:10Financial provision for them that's not
41:12an easy case to make and again you know
41:15you really want to avoid litigation in
41:17the family because it's such a huge
41:20drain on family wealth you know the Only
41:23Winners in that case are going to be the
41:25lawyers
41:27all right thank you very much James um
41:29how can attendees from today's webinar
41:32contact you if they've got any questions
41:34do you offer a consultation with people
41:36before you draft Wills I'm yeah I'm
41:38always happy to have a chat with clients
41:41beforehand to see how we can help them
41:44we usually send our standard will
41:47questionnaire to them so that they can
41:49provide us with a bit of information in
41:51advance uh and we can see what's
41:53involved and we can develop the
41:55conversation from there great thank you
41:57very much contact details will be
41:59available um after this webinar as well
42:02or once the webinars have been posted on
42:05the website you also have contact
42:06details there as we said earlier in case
42:09some people just joined or weren't
42:11listening um this is a two-part webinar
42:14Series so the second one will be on the
42:1615th of March and will cover lasting
42:18Powers of Attorney it will also be with
42:20James so he will be back um if you've
42:22got any questions ahead of time feel
42:24free to email either dragon arent or
42:27James and we can get back to you on them
42:30great but thank you very much James for
42:31joining us and thank you everyone for
42:33your great questions thank you and have
42:35a wonderful day

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