Complex Probate and Wills

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.

Mounting costs of care home fees could mean elderly people have nothing to leave in their wills, a Swindon solicitor has warned.

Simon Mee

Simon Mee, 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.”

Simon Mee’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 Simon Mee. “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.

Simon Mee can be contacted on 01635 521212  or simon.mee@clmlaw.co.uk
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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.

Simon Mee, a solicitor with Wantage law firm, 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,” she 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 Simon Mee. “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 please contact Simon Mee on 01635 521212 or simon.mee@clmlaw.co.uk

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

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.

An Oxford family says it is living on the breadline because of delays in the Court of Protection system which means compensation awarded to them following a road accident is not being paid.

Vincent Mullen from Headington is due to receive hundreds of thousands of pounds following a court settlement in May. However, his wife, Suzy, says their efforts to sort out the compensation with the Court Funds Office have left them confused and frustrated.

“We have endured seven years of hardship following my husband’s accident,” says Suzy Mullen. “When the settlement was finally reached we were understandably relieved.”

“Without the help and generosity of my own family we simply would not have been able to cope. We have all this money due us but are still having to rely on my family and borrow my niece’s car because the money is so slow at coming through.”

Communication with officers at the Court Funds Office, part of the Court of Protection, has become so protracted that Mrs Mullen has asked her solicitor, Michael Berrett of Wantage law firm, Charles Lucas & Marshall to deal with the Court on her behalf.

He says the delays the Mullens are experiencing are typical and part of a widespread problem.

“I have represented this family from the very start of the legal process and was delighted we eventually reached what was a fair and reasonable settlement,” he said.

“Not unreasonably, my client wants to buy a property more suitable for them than the one they are living in which is privately rented. We made a prompt application for the money to be released but are still waiting.

“There has to be a better way of doing things I would be interested to know if other people are experiencing the same problems and frustrations. This regime is designed to protect people’s finances but it is only fair that it facilitates access to those finances in order that people can improve the quality of their life.”

For further information please contact Michael Berrett on 01235 771234  or michael.berrett@clmlaw.co.uk

Lyn Ellins - Wills Expert

Calls are growing for greater regulation of will-writers following a Panorama programme that exposed the risks and the sharp practices used by many unregulated will-writers.

Lyn Ellins, a lawyer Swindon firm, Charles Lucas & Marshall says her firm have been trying to highlight this problem for many years – following a series of botched cases where people have had to come to them for legal advice.

“Many of these will-writers claim to be the cheap option but often there are hidden costs and families end up paying additional money because they have to come to a lawyer to sort out the mess,” she says.

Lyn Ellis says some of the mistakes they have had to sort out have been as simple as not getting a will witnessed properly.

“A family came to me because they knew their father had wanted to give money to a charity. However because the will had not been witnessed properly it was invalid so their father was officially intestate ie he had not made a will.

“We had to apply for a grant so we could administer the will, then write a deed of variation which all the beneficiaries had to agree and sign.

“Only then could we collect in the money from the father’s estate and distribute it as he had wanted.  The costs were something like double what they should have been, which reduced the net estate and meant the charity and the family all got less.”

Unlike many will-writers, solicitors are qualified to write wills and are up to date with legislation. If anything should anything go wrong – their obligatory insurance cover means clients are protected against errors.

“Most law firms are happy to offer a free half hour to check a will or advise on making one,” says Lyn Ellins. “They will even visit the client at home if they cannot make it into the office. They will also give you a clear idea of cost from the start.”

Charles Lucas & Marshall has added its support to the growing Law Society campaign to introduce greater regulation of will-writers and provide consumers with more protection.

You can contact Lyn Ellins on 01793 511055 or lyn.ellins@clmlaw.co.uk

Were you as horrified as I was by the Panorama programme on Monday evening?

It highligted problems with unqualified ‘Will-Writing’ firms who appear to offer to draw up your will for as little as £30, then pressurises the elderly into signing up for a package which costs over £2,000.

One interviewee called the firm who did a spectacularly bad job on the estate for which she should have been a beneficiary as “cowboys”.

Solicitors often get a bad name for high costs, long-delays and impenetrable jargon but this programme showed just how vulnerable clients are who go to unregulated and uninsured companies.

Remember when reading those attractive adverts – if it looks too good to be true – it probably is.