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Rising Care Homes Fees Mean More Elderly People Leaving Families With Nothing


Mounting costs of care home fees could mean elderly people have nothing to leave in their wills!

Michael Overend

Michael Overend

Michael Overend, a wills and estate planning specialist with law firm, Charles Lucas & Marshall, says increasing numbers of elderly people could see their assets wiped out as they struggle to fund the costs of living in a care home.

“It seems unfair that people who have saved and lived carefully for years will have nothing to leave for their families in their will,” she said. “This does not have to be the case though.

“Many people are ending up in this situation because they have not received legal advice about their estates and are therefore unaware of the consequences of not making a will.”

Michael Overend’s warning follows a report that more than 20,000 pensioners had to sell their homes last year to pay for residential care home fees – an increase of 17 percent over the past five years.

Last year’s Age Concern/Help the Aged estimates put average care home fees at £470 per week.

“Most couples I meet have two concerns,” adds Michael Overend. “They want to provide for their spouse and preserve some of their estate for their children. This can be achieved through the preparation of a Will – which means they can carry on living and enjoying their lives.”

“Residents’ assets will inevitably deplete. Our advice to people who are worried is to speak to their solicitor as they can inform you of the options you have.”

The figures are based on research by health care analysts Laing & Buisson and the House of Commons Library.

For further information contact Michael Overend on michael.overend@clmlaw.co.uk, or 01635 521212

Written by Michael Overend

October 10th, 2015 at 12:46 pm

Posted in News,Wills

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Families Reluctant To Face Up To Realities of Caring for Elderly Relatives


Care of an elderly relative is something most of us will have to face up to in our lives – yet we are still reluctant to prepare for it.

Michael Overend

Michael Overend

Michael Overend, a solicitor with Charles Lucas & Marshall, says families often learn the truth too late when they are confronted with expensive care home fees for a member of their family.

“They discover they have no legal access to their mother or father’s money or property and haven’t got the financial resources themselves to pay these very expensive fees,” he says. “This can create an enormously stressful situation for a family, at what is already an emotional time.”

The most effective action a family can take to look after a relative’s financial affairs is through a Lasting Power of Attorney. This involves a relative giving their consent to one or more people to make financial decisions on their behalf.

“Often this is something families are loathe to confront and discuss, says Michael Overend. “But the consequences of not planning for possible mental incapacity can be serious and can create an unnecessary administrative burden for a family.”

One Oxford woman who wished she had taken out power of attorney is Janice Simms, whose elderly mother, Beryl, suffered a stroke last year and has been unable to live independently ever since. Beryl is now happy, living in a care home in Woodstock, but for her daughter, Janice, the last year has been a succession of bureaucratic and expensive hurdles as she has attempted to sort out her mother’s affairs.

“We were paying weekly care home bills of £800 while at the same time trying to sort out power of attorney,” explained Janice. “For this, we needed a letter from her doctor explaining my mum was mentally capable of granting us power of attorney.

“When they assessed her they felt she was not capable of retaining information and therefore could not grant us power of attorney. This meant we had only one option – to go to the Court of Protection.

“This has taken seven months to sort out and there have been so many forms to fill in – it has been a bureaucratic nightmare. We also had to pay a £400 Court fee and an annual fee of £340 for the Court of Protection to continuously supervise they way we manage my mum’s affairs.

“Additionally, we have to take out an insurance bond of £150 each year to protect my mum’s assets in the event of me embezzling her money.  Power of attorney would have been so much simpler.”

From her experience of having to sort out her mother’s affairs, Janice has already decided that she will organize her own power of attorney for her daughter in the near future.

“I wouldn’t want my daughter to have to go through what we have had to,” says Janice. “It is completely avoidable.”

For further information contact Michael Overend on michael.overend@clmlaw.co.uk, or 01635 521212

Written by Michael Overend

October 9th, 2015 at 2:25 pm

Frequently Asked Inheritance Tax Questions


Q. I want to give money to my children and grandchildren and I have been advised that on my death my estate will be liable for inheritance tax.  Will inheritance tax be paid on the gifts made to my family whilst I am still alive?

Marie Verney

Marie Verney

A. Marie Verney, wills and estate planning specialist with law firm, Charles Lucas & Marshall.

In its simplest terms inheritance tax is charged on the transfer of assets on death.  However, gifts made during life may also be taxed.  A person is entitled to give up to £3,000 each tax year without any inheritance tax being payable and if one year’s exemption is not used it may be rolled over for one year only to make a maximum of £6,000.  So if you have three children each may receive £1,000.  In addition, you can give a maximum of £250 to any one person each tax year as long as they receive no more than that amount from you.

Of course, you can give more than these amounts. However, if you fail to survive the gifts by seven years the value of the gift will be added to your estate for inheritance tax purposes after any annual exemption has been deducted.  If the gift is substantial, tax may be payable on it and that tax may be reduced as the gift gets older.

It is important to bear in mind that you cannot continue to benefit from a gift once it has been given.  Therefore you should ensure that you will have no further need of the money or asset you intend to give away.

Other exemptions and reliefs do exist, eg gifts made on the marriage of a child, but these will depend on your circumstances.  It is sensible to seek advice before making any gifts for inheritance tax purposes and to keep accurate records.

I do not spend all my income and am concerned that the unused income is adding to the value of my estate and will simply increase the inheritance tax due. Is there anything I can do?

An inheritance tax exemption does exist for gifts made from excess income. However the terms upon which the exemption may be claimed are strict and appropriate records must be kept.

To qualify for the exemption, gifts must be made as a part of normal expenditure, this means they must be typical or habitual payments. This can be shown by regular payments made over time, by setting out in a letter a commitment to make those regular payments, or even by paying the premiums of a life policy owned by another person.

It must also be possible to show that the gifts are in fact made from your excess income and that your remaining income allows you to maintain your usual standard of living.    This can be shown by keeping a record of your annual income and your annual expenditure.  Whilst this may appear to be an onerous task it can provide an opportunity to save a significant amount of tax.

For further information contact Marie Verney on 01635 521212 or marie.verney@clmlaw.co.uk

Written by Marie Verney

October 6th, 2015 at 3:17 pm

What is a Living Will?


Lisa Keefe, a wills and estate planning specialist with solicitors, Charles Lucas & Marshall explains why people may want to consider a ‘living will.’

Lisa Keefe

Lisa Keefe

When a person is unwell they will usually talk with their doctors to agree a course of treatment.  However, if, for example, a person is unconscious following an accident or is unable to communicate their wishes during the later stages of an illness, doctors will need to make the decisions themselves.  They must act in the patient’s ‘best interests’ and will assess those best interests by referring to a variety of factors.

However, a person may have made an advance decision to refuse medical treatment which the medical team must follow whether or not they believe it is in the best interest of their patient.  

The term Living Will has no legal meaning, but is often used to refer to these advance decisions or sometimes, advance statements. These are not binding decisions to refuse treatment but provide an indication of the patient’s wishes which healthcare staff should take into account when assessing a person’s best interests.

How do I make an advance decision?

An advance decision to refuse treatment is binding and must be followed, provided it is valid and applicable.  An advance decision can be made invalid by withdrawing the decision, appointing one or more attorneys under a Personal Welfare Lasting Power of Attorney or by acting in a way clearly inconsistent with the decision.

An advance decision must also be applicable, that is, it must state precisely what treatment is to be refused ie a statement giving a general desire not to be treated is not sufficient.  Therefore, an advance decision is usually most appropriate where a person has been diagnosed with a particular illness and the course of that illness can be defined, or if a person has strong feelings or beliefs about a particular treatment, such as blood transfusions.

While an advance decision need not be in writing and may be verbal, a written record should be kept, either in a person’s healthcare record or by preparation of a specific document. However, an advance decision which refuses life sustaining treatment must be in writing and signed and witnessed.

Only if a healthcare professional is satisfied an advance decision exists, is valid and is applicable must they follow it and not carry out the relevant treatment.

Are there any alternatives?

Advance decisions are especially useful where a particular situation is likely to occur in the course of an illness or strong feelings are held about a particular treatment.

Following the Mental Capacity Act 2005 it is possible to appoint a person, called an attorney, to make health and welfare decisions if you are incapable of making them yourself. This could include the ability to refuse or give consent to life sustaining treatment. This Personal Welfare Lasting Power of Attorney provides an opportunity to appoint a person to make a wide range of decisions about care and treatment and can provide greater flexibility than an advance directive.

For further information contact Lisa Keefe on 01635 521212 or lisa.keefe@clmlaw.co.uk

Written by Lisa Keefe

October 1st, 2015 at 11:42 am

Wills  – Transfer of Businesses on Death


It is important to give consideration to the effect of a business owner’s death on both the business itself and their family. Marie Verney, a wills and estate planning specialist with law firm, Charles Lucas & Marshall explains how thoughtful estate planning with an appropriately drafted Will can reduce the impact on the business, limit the possibility of conflict within the family and minimise inheritance tax.

Marie Verney

          Marie Verney

One key aspect of a successful business is planning. While this may start with the business’s own strategy it is also important that the business owners make arrangements for the management and succession of the business in the event of their death.

If the business is a company its memorandum and articles of association or shareholder’s agreement may contain provisions to cover the death of a shareholder. This may cover voting rights of the deceased’s personal representatives, the transfer of shares and any rights of other shareholders to purchase those shares.

If the business is a partnership, the partnership agreement may record similar provisions.   If there is no agreement or it is out of date it is advisable to create or review the agreement.

Business owners should also consider various practical difficulties which will need to be overcome following the death in terms of the day to day management of that business such as signing documents, and the immediate management of finances.

As well as ensuring that the constitution of the business is up to date it is also important for individual business owners to carefully consider their own estate planning to include a suitable and properly executed Will dealing with their interest in the business.   The Will can appoint appropriate executors and give the share of the business to the desired beneficiary in the most efficient manner, maximising certainty and minimising financial loss.

Family businesses can bring an added complication where one child has worked within the business and would like to take on and continue that business.  The business owning parent may want to give that child the business, or a large share of it, but may also wish to treat any siblings fairly.

A particular difficulty can arise when a child has worked in the business relying on the expectation that they would inherit it on the death of their parent. They can be surprised by the terms of the Will or the effect of the intestacy rules.  Tensions can also often arise if the child who has worked in the business is expected to continue the business with his siblings or buy out his siblings share.  There are a variety of solutions to these problems.

A Will can also maximise tax efficiency.  Certain businesses can qualify for an exemption to inheritance tax, and a properly drafted Will can take advantage of this exemption.  Business property relief can apply at 100 per cent and can therefore effectively remove the value of the business from a person’s estate for tax purposes.

For further information contact Marie Verney on 01635 521212 or marie.verney@clmlaw.co.uk

Written by Marie Verney

September 25th, 2015 at 2:02 pm

Avoid Elderly ‘Snatch’ By State- Make a Health and Welfare LPA


In April 2009, great-grandmother Betty Figg was snatched by social workers against the wishes of her daughter, her former carer.

Social workers arrived with police and a battering ram to remove the 86-year-old woman suffering from dementia from her daughter’s house.
Boy Taking Photo of Grandparents
The media quickly spread pictures and video footage of Betty being taken from the house in her wheelchair with a towel thrown over her head.

It seems social services did not agree with Betty’s daughter that it was in Betty’s best interests to be cared by her daughter in a specially converted room, in her daughter’s home.

Could this happen to you and your family?

There is a way that it can be avoided; by giving a health and welfare lasting power of attorney to a family member, social services are prevented from making care decisions.

Without this document, social services can make decisions on behalf a vulnerable person, if they think they lack mental capacity and believe it is in their best interests.

They do not have to follow what the family want and cannot be liable for their decisions.

Lisa Keefe, of Charles Lucas & Marshall Solicitors, of Newbury, and a member Solicitors for the Elderly, is encouraging all older people to plan ahead and make a health and welfare lasting power of attorney.

‘It is an important document and sensible to get advice about the choices you have.

What happened to Mrs Figg may never happen to you, but if it does, you and your family will be glad you made the power.’

For further information contact Lisa Keefe on 01635 521212 or lisa.keefe@clmlaw.co.uk

Written by Lisa Keefe

September 21st, 2015 at 4:15 pm

Lasting Powers of Attorney


A Lasting Power of Attorney (LPA) is a legal document through which you can grant another person or persons (the attorney(s)) authority to make certain decisions on your behalf. Most importantly, it remains valid if you become mentally incapable of dealing with your affairs yourself.

Michael Overend

Michael Overend

Attorneys cannot do what they like; they must follow the principles of the Mental Capacity Act 2005.

There are two types of LPA. An LPA for property and financial affairs enables your attorney(s) to deal with your house and finances e.g. bank accounts, as you specify. An LPA for health and welfare allows your attorney(s) to make welfare and health care decisions on your behalf and could extend to giving or refusing consent to life sustaining treatment.

Anyone of us could be in an accident or face sudden and serious illness at any time and be either temporarily or permanently physically or mentally incapable of managing our affairs. LPAs should therefore be considered by anyone over the age of 18 and particularly if you are a single parent, self-employed or have business interests.

Without an LPA in place, if you were to become incapable of dealing with your affairs, it could be necessary for an application to be made to the Court of Protection for an Order appointing someone to do deal with things on your behalf (a Deputy).

At this point you would have no say over who the Court appoints and the process can be both lengthy and costly. The practical effect of this could leave you and your relatives without access to your money or financial information which could be required to pay for care fees or to keep you in your home.

An LPA puts you in control by allowing you to choose your attorneys and provide guidance or include restrictions or conditions in relation to how the attorneys should act. Care should be taken however so as to ensure that specific restrictions and directions do not render the LPAs unworkable in practice.

For further information contact Michael Overend on michael.overend@clmlaw.co.uk, or 01635 521212

 

Written by Michael Overend

April 27th, 2015 at 3:44 pm

Charities – If the Books Don’t Balance


In the current economic climate, many charities are finding it difficult to make ends meet. Michael Overend, a lawyer at Hungerford and Swindon law firm, Charles Lucas & Marshall, who specialises in charity law, looks at some of the concerns facing trustees.

I am worried about the financial position of the charity. What should I do?

As part of the regular review of the charity’s finances, you should be monitoring your actual spending and income against budgeted spending and income and also your cash-flow projections. Ensuring the information you are given is accurate and timely is critical to your being able to monitor the financial position of the charity, and this should be done as often as is necessary to ensure that the trustees are able to make informed decisions.

You should also analyse your balance sheet as there may be future commitments and certain contingent liabilities which may not be shown on the balance sheet, and which may affect your decisions and cash-flow forecasts if it becomes necessary to re-structure the activities of the charity. These may include, for example, the costs involved in making staff redundant, sums due to a landlord if you were to move premises, or compensation due under a contract if you to try to reduce the scope of the charity’s activities. You should also be aware that if there are restricted funds, or permanent endowment, you may not be able to use all of these assets in meeting the charity’s liabilities. You should take legal advice in relation to these matters.

If you conclude there is a risk that the charity may not be able to meet its liabilities as they fall due, or in the event of re-structuring or a closure, you should take advice from the charity’s accountant before undertaking any significant changes in the way the charity runs. You should ensure that their advice is in writing and is considered by the full trustee body.

If the charity is insolvent, will I be liable for its debts?

If the charity is a charitable company it will have a separate legal identity, and as such, all of its debts will be those of the charitable company and not the individual directors. However, directors can be personally liable in some specified situations, including if a loss to the charity arises from a breach of fiduciary duties, and in some circumstances prescribed by the Insolvency Act.

If the charity has been established by a declaration of trust or it is an unincorporated association, any contract or other legal obligation will have been entered into by the charity trustees on behalf of the charity. Provided that the trustees have acted properly and within the charity’s trusts, the charity would normally be able to reimburse the trustees, but if there are insufficient funds within the charity to do this, the charity trustees may end up having to meet these debts and liabilities personally.

For further information contact Michael Overend on michael.overend@clmlaw.co.uk, or 01488 682506 or 01793 511055.

Below an Interactive Map of all UK Charities, published by the Charities Comission.

Written by Michael Overend

September 16th, 2011 at 3:12 pm

Does Your Partner Need Residential Care?


Michael Overend, a specialist in wills and estate planning at law firm, Charles Lucas & Marshall looks at the steps which need to be taken when a partner requires residential care.

Michael Overend

Michael Overend

Q.    My husband has Alzheimer’s disease and will shortly be moving into residential care.  Will our house have to be sold to pay the care fees?

A. While you continue to live in the house, its value will not be taken into account in assessing how much your husband should personally pay for his care.  You will not have to sell the house.  A similar exclusion would be available if you were unmarried but living with a partner who had to go into care.

Q.    My husband receives pension income and has some savings.  Will these have to be used to pay for his care?

A. Your husband’s state pension and any other state benefits will have to be used for the cost of his care, regardless of whether or not he has any savings.    Only one half of any occupational or personal pension will have to be used, provided the other half is paid to you.

To the extent that your husband’s income is insufficient to pay the care fees in full, then the shortfall will have to be paid from your husband’s savings if these exceed the prescribed limit (currently £23,250). Once the savings fall below this figure the local authority will start to make a contribution towards the fees.

Once your husband’s savings have fallen to the lower limit (currently £14,250) then he will not have to contribute any more of his savings to the cost of care.

If you have savings in joint names then you should separate these into individual accounts of equal value before your husband goes into care.

Q.    Should I review my Will?

A. You should certainly review your Will if you are currently leaving your estate to your husband outright on your death.  If your Will stays in this format your capital will have to be used to pay your husband’s care fees following your death.

You should consider changing your Will so that you leave your estate to a trust from which your husband can benefit.   The value of your estate will not then be taken into account in assessing how much capital your husband has.  Consequently the local authority will start to contribute to his care fees earlier than would otherwise be the case.

If the local authority’s contribution is not sufficient to pay for the care home fees in full then the trust fund can be used to make “third party top ups” to meet the balance of the fees.

When you update your Will, you should also take advice on the structure of your assets.

For example, if you own your house jointly with your husband then it is likely that on your death your share of the house will pass to him outright even though your will states that your estate is to be left in trust.   You need to ensure that you own the house jointly as “tenants in common”.   This means that when the first of you dies, his or her half of the house will pass according to the Will.    For this arrangement to work satisfactorily, it is important that your husband has previously made a Will in your favour.

For further advice please contact Michael Overend on (01635) 521212 or michael.overend@clmlaw.co.uk.

Written by Michael Overend

March 10th, 2011 at 3:33 pm

Posted in News