Gainsborough’s Birthday

Fairhurst Menuhin & Co had the pleasure of sponsoring Gainsborough’s Birthday on the square celebrations in Sudbury on Saturday 13th May 2017.

Thomas Gainsborough was born in Sudbury in 1727, he went on to become one of Britain’s most iconic portrait and landscape artists of the 18th Century.

Flowers at the Gainsborough monument in SudburyFlowers at the Gainsborough monument in Sudbury

 

Henrietta Brett

Death and Taxes

DEATH AND TAXES

As Benjamin Franklin said in 1789 “Nothing is certain except death and taxes.” And that is as true today as it was then.

Death

It is a very modern taboo but we are all going to die so why is it that so few of us have a Will.

If you die without leaving a Will you are said to have died Intestate, and your Estate (that is your property, money and possessions) will be distributed in accordance with the Intestacy Rules. The Intestacy Rules are a set of strict legal rules which dictate who will benefit from your Estate, how much they receive and who can administer your Estate.

If you make a valid Will however you can choose who will benefit from you Estate. The English law of succession is based on the principle of “testamentary freedom”. Put simply, this means that you can choose to leave your Estate to anyone you like.

However, there are exceptions. The Inheritance Act (Provision for Family and Dependents) 1975 allows certain people to make a claim against an estate if they have not been adequately provided for.  The most common example is that of a dependent child.  Where a child has been cut out of their parent’s Will, the child (or someone acting on their behalf) can raise a claim asking for the court to make an award for “reasonable financial provision” from the Estate.  Although adult children financially independent from their parents can also make a claim in the recent case of Ilott -v- Blue Cross and others the Supreme Court confirmed that we are in general free to choose who will inherit our property when we die and that your wishes matter and that if you record those wishes in a will, they will be listened to. If this is a matter of concern to you then you should take legal advice.

… And Taxes

Inheritance Tax (IHT) is a tax which is paid out of your estate on your death. The standard IHT rate is 40% and it’s only charged on the part of your Estate that’s above the £325,000 threshold (the nil-rate band).

There’s normally no Inheritance Tax to pay if either the value of your Estate is below the £325,000 threshold or you leave everything to your spouse or civil partner, a charity or a community amateur sports club.

From April this year if your Estate includes a main residence and your Estate is above the nil-rate band it will be possible to claim an additional nil-rate band as long as your main residence is passed on death to a direct descendant. This will be:

  • £100,000 in 2017 to 2018
  • £125,000 in 2018 to 2019
  • £150,000 in 2019 to 2020
  • £175,000 in 2020 to 2021

The additional nil-rate band will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil-rate band, are passed on death to direct descendants.

Any unused nil-rate band will be able to be transferred to a surviving spouse or civil partner.

IHT is a complex area and you may wish to take legal advice.

Funds from your Estate are used to pay IHT to HM Revenue and Customs (HMRC). This is done by the person dealing with your Estate, the “executor” if you left a Will or the “administrator” in the case of an intestacy.

The executor and administrator may also need to apply for a Grant of Probate or Letters of Administration if your Estate includes a house or flat although you don’t normally need a Grant if the Estate either passes automatically to the surviving spouse or civil partner because it was held as joint tenants or if the Estate consist only of a small amount of money. If a Grant is needed then a probate fee must be paid at the same time as sending your application form to the Probate Registry. Current probate fees are £215, or £155 for those applying through a solicitor. But the Government is increasing the fees from May as follows:

 

Value of Estate – £ Probate Fee – £
Less than £50,000 Nil
50,001 – 300,000 300
300,001 – 500.000 1,000
500,001 – 1,000,000 4,000
1,000,001 – 1,600,000 8,000
1,600,001 – 2,000,000 12,000
Over 2,000,000 20,000

 

Because both IHT and Probate Fees are payable before funds in the Estate are available you may wish to consider insurance policies or other financial arrangements to ensure the money can be accessed when it is needed.

If you would like advice on any of the issues raised in this article please contact Henrietta Brett at Fairhurst Menuhin & Co Solicitors on 01440 761200 or henrietta.brett@fmc-solicitors.com

The importance of an LPA

Recently a young couple in their 30’s came in to see me to make Lasting Powers of Attorney. They explained that it was something they knew they probably should do  but it had never seemed very urgent until one their fathers was  knocked down by a bus while celebrating his  70th birthday in Paris. He was in a coma for many weeks  which was hard enough for the family but the situation was made much more difficult because they could not arrange payment for medical expenses (he only had the basic EHIC card). Once back in the UK his recovery was  slow and while they did everything they could to help they would have liked to take over the burden of his financial affairs until he felt up to it but, again they were limited in what they could do.

Mental and physical incapacity can hit at any time which is why we should all plan ahead to ease the potential burden on our relatives.

A Lasting Power of Attorney (“LPA”) gives another individual the legal authority to look after your financial affairs or health and welfare should you lose the capacity, either temporarily or permanently, to do so. LPAs are recognised by care homes as well as banks and building societies and the tax, benefits and pension authorities.

If you do not have an LPA in place and become incapacitated, your relatives may face long delays and expense in applying to the Court of Protection to get access to your finances.

LPAs are legal documents and you should consider having one alongside your Will. AGE UK advise that while you don’t need to use a solicitor “it’s important to remember that an LPA is a serious, powerful document

Don’t Get Burned by Solar Panels!

If you purchase solar panels there are usually no issues when you come to sell your property, provided you have all the necessary supplier guarantees and building regulation certificates and, you have purchased the solar panels outright. Full steam ahead for you and your conveyancing solicitor!

However, many solar panels are marketed on a ‘free’ model. Essentially, the supplier agrees to install the solar panels free of charge in return for a lease over the roof space of your property. In return,  the  property owner get free electricity. Sounds like  a win-win situation for the supplier, the owner and the environment doesn’t it? Well, not quite…..

The generosity of the supplier largely springs from the financial  benefit they receive from payments from  the ‘Feed in Tariff Scheme’ introduced in 2010. Usually these leases are for a 25 year period and  crucially contain a buy out clause to terminate the lease. The cost to the property owner to buy out  of  the  lease is usually £15,000 – £25,000, depending on the size of the roof and the length of the remaining term of the lease.

If you enter into such a lease, this causes a potential problem when you want to sell your house during the life time of the lease. Unless you are able to ‘buy out’ of the lease, it encumbers the property and any successor in title to the property, thus any mortgage lender is unlikely to lend to a potential buyer. Clearly, this will have an impact on the marketability of your property and may cause a stumbling block for seller or buyer alike.

The advantages of low energy bills and the benefits of renewable energy are immeasurable. But, to ensure you don’t get burned by your own solar panels, why not consult a solicitor before entering into any solar panel agreement. Or, if you already have an agreement with a solar panel supplier, why not consult a solicitor before you put your house on the market for advice on the lease. This needn’t be expensive and can avoid costly and stressful pitfalls and delays when you have found your buyer and are ready to move.

If you need more advice regarding agreements relating to your property or, if you are selling or buying a property with solar panels and require advice or re-assurance, please do not hesitate to contact Kerry Wigg at kerry.wigg@fmc-solicitors.com or call her on 01787 827 583.

Lease Troubles

Little does the eager, starry eyed entrepreneur know that perhaps the greatest risk he or she is taking is not the uncertain income stream, the investment in tools, machinery, websites, logos, advertising and inventory, nor is it the one staff member taken on the receive clients, or sort flowers, or take calls, or help grow the business. The greatest risk is that fairly wordy piece of paper he was rushed to sign by a pushy estate agent, it said something about a lease on the front page. Not to worry though, after all, everybody needs a lease right?

Well yes, but there are leases and leases. This particular entrepreneur unfortunately did not do so well, the service she was offering was not what people wanted, or the flowers he was selling were not the taste of the locals, the economy crashed two months after he moved into his new shop, or the supplier she had relied on pulled out. For whatever reason, businesses sometimes fail. Time to sell off the inventory in the back and close shop. Not so fast though, that piece of paper you signed actually forces you to pay the rent for the next four years, and stops you from sub-letting the shop, and requires you to fix the windows, and the door and even the roof! As if watching your own business fail was not punishment enough, you now are facing severe financial stress because of a lease.

 

If you are considering starting a business and looking for suitable premises come talk to us. We can help you make sure that you are limiting your exposure to risk and focusing on building a thriving business.

Aaron Menuhin works in the Commercial Conveyancing department and is contactable at the Haverhill Office 01440 761 200 or by email at aaron.menuhin@fmc-solicitors.com

Changes in employment law – not business as usual!

Employment Law is undergoing a revolution. In July 2013, we saw the introduction of employment tribunal fees to submit a claim to the employment tribunal, a cap of 12 months’ pay on unfair dismissal compensation; and new rules governing Employment Tribunal procedure. But are employers prepared to meet these changes?

Employment Tribunal Fees

Under the new fee system, an employee must pay a fee to submit their claim and to proceed with a Tribunal hearing. Employees will therefore think twice about bringing unmeritorious claims. Early settlements from employers will decline too as they adopt a “wait and see” approach and use the payment of the upfront fee by an employee as an indicator of whether they are serious about their claim.

Although it may seem that the introduction of fees favour the Employer, with a likely rise in the cost of settling claims it is not all good news. Employees will inevitably seek the cost of the Tribunal fee to be added to any settlement payment and there is a real prospect that Claimants would rather have their ‘day in court’ rather than entertain settlement proposals.

Unfair Dismissal Compensation

The compensatory award for unfair dismissal claims were capped at £74,200. This gave an unrealistic perception about the level of awards employees could receive. We have now seen a 12 month pay cap on unfair dismissal compensatory awards introduced. The maximum cap of £74,200 remains, but there is also a lower cap of one year’s salary for those who earn less than £74,200.  Although the intention is clearly to deter claims by employees against businesses, employees may consider adding allegations of discrimination or whistleblowing to bolster their chances of a higher award.

Employment Tribunal Rules

Elaborate Tribunal Rules were a minefield for anyone unfamiliar with the Tribunal process. Consequently, the rules have been reduced and simplified to make them more accessible. It seems universally accepted that any uniformity will give certainty for both employers and employees and must therefore be embraced as a welcome change by both.

Conciliation

Resolving disputes in the workplace is less costly to both parties and delivers more positive outcomes in terms of continued employment and business productivity. Conciliation can also achieve outcomes which are not an option in the Tribunal, such as an apology.

It is intended that ACAS conciliation will become a mandatory process before a claim is submitted to the Tribunal. The intention is clearly to encourage the parties to consider and participate in settlement or mediation.

Conclusion

The Employment Law changes we are witnessing are to encourage early resolution of workplace disputes and to simplify an overburdened Employment Tribunal process. As these changes bite, employers need to modify their approach and strategies to resolve disputes. Whilst the new rules in 2013 take a tough line on employees, the future looks brighter for employees with the imminent introduction of compulsory ACAS mediation. Penalties of up to £5,000 for employers who lose at Employment Tribunal will discourage small businesses from defending claims.

We are likely to see an increase in the tactical games of employers and employees.  But who will prove to be the strongest tacticians? Employers should strongly consider seeking help now from Employment Law Specialists to prepare them and protect their business against the changing cycle of employment law.

 

Kerry - adjusted (640x427)

Kerry Wigg is a partner at FM&C specialising in Employment Law. She may be contacted on +44 (0)7454 866 133 or +44 (0)1440 761 200.

Email: kerry.wigg@fmc-solicitors.com

How to Be More Organised Than Your Pet

Buttons, my Labrador retriever, did very little retrieving over his lifetime. Mainly he buried his treasured possessions in the garden and then forgot about them.

I am afraid Buttons’s approach to storage solutions is not unique to canines. I have seen people with a variety of creative filing systems come to Fairhurst Menuhin & Co for legal advice. Clients have put important family documents such as Wills under beds, in cupboards, and even one inside a Victorian crockery set, and then promptly forgotten about them.

Unfortunately, imaginative hiding places create complications with serious legal and emotional consequences. Too often legal documents are found after disagreements have already broken out over money, property and family heirlooms. Sometimes express wishes to be buried are only discovered after a deceased family member has been cremated. All the above situations are avoidable.

So where should you store your Will?

Taking the time to responsibly look after your family and estate by drafting a Will is something we all need to do.

In all fairness, however, it is not obvious what to do with a Will once it has been created. Some solicitors firms charge you for storing your Will at their offices, and some solicitors have filing systems only slightly more sophisticated than man’s best friend. If you are an organised individual, you can hold on to your Will at home, but it is still at risk of flood or fire damage or not making its way to a lawyer at the crucial time.

At Fairhurst Menuhin & Co, we can store your Will for free. We keep our documents in fire-proof storage units. And we stay in contact with our clients over the years in case any changes, however small, need to be made. Even if you have not drafted your Will with us, we are still happy to store it for free. Or we can review it for you.

And if we are storing your Will and you want to take a look at it, unlike Buttons, we are perfectly capable of retrieving it for you.

Contact Aaron Menuhin at aaron.menuhin@fmc-solicitors.com or call our offices on 01440 761 200.

The cost of care

The erosion of assets as a result of long-term care costs is becoming a concern for many. We are living longer and consequently professional care may become a necessity for many of us.

Care Legislation

The NHS and Community Care Act 1990 obliges Local Authorities to carry out an assessment of anyone who appears to have a care need and to ensure the individual has access to suitable care.

Once an individual’s care needs have been established, the Local Authority will carry out a Means Test to determine the reasonable cost of care required and assess the individual’s ability to pay for or contribute towards the cost, taking into account both income and assets.

Those with assets over £23,250 are unlikely to receive any funding for care, but may be entitled to other benefits to help contribute towards the costs such as Attendance Allowance.

The Government is looking at state protection for people concerned by asset erosion with the proposed introduction of a cap on the amount individuals will be expected to pay for care during their lives. The level of the cap is expected to be in the region of £70,000, which remains a significant sum in relation to the value of many people’s estates.

In situations where the person requiring care is leaving a vacant property, the value of the house will be included in their financial assessment but the individual or their attorneys will be free to decide how to raise the necessary funds to pay for the care. The Local Authority will not simply ‘take the house’ and it may be worth exploring other options which provide the required money whilst preserving the capital asset.

While a dependent relative is living in the house, the value of the house will be disregarded by the Local Authority when carrying out a Means Test.

Deprivation of assets

Making a gift of a home to children or making lump-sum payments in order to qualify for state support is known as a deprivation of assets.  If it is apparent that someone has deliberately deprived themselves of a property or assets in order to qualify for state support, and there is no other compelling reason for the gift, the local authority will carry out the assessment as though the assets still belonged to the individual. There are no time limits on how far back the Local Authority will look.

A properly drafted Will

That said, peace of mind can still come from having a professionally drafted Will. If, for example, joint owners of a property pass their respective shares to their children, subject to the survivor’s  right to occupy, only the survivor’s half of the property will be included in any future means test.

 

Simon Saunders is a member of our Wills and Probate Department at FM&C Solicitors and may be contacted on or + 44 (0)1799 526 849.

Email: simon.saunders@fmc-solicitors.com

 

The Great Common Law Marriage Myth

That well known phrase, “living over the brush”, is often used to describe an unmarried couple who live together. It originates from the tunnel building days of the 19th Century, when, if a boy and a girl took a liking to each other but could not afford a church wedding, they could earn the respect and recognition of others by holding hands and jumping over a brush or broom handle held by two older people. They were then “married” in the eyes of their peers.

Cohabitation today

In the UK today, statistics show that more and more people are choosing to live together before, or as a direct alternative to, getting married or entering into a civil partnership. In 1996 there were less than 3 million people cohabiting in the UK. By 2012 that figure had almost doubled to 5.9 million. What’s more, an increasing number of cohabiting couples, roughly 38% of them, are having children.

Sadly, there remains widespread confusion about their position in law. According to a 2006 British Social Attitudes survey by the Centre for Comparative European Survey Data (CCESD), “no less than 58% of respondents thought that cohabiting couples who split up were probably or definitely in the same position as married couples”.

The myth of the common law marriage is widespread. But it is just that, a myth, without any basis in law.

Unmarried couples and the law

At present, unless they have entered into cohabitation agreements, the legal protection for unmarried couples who part is extremely limited. If the property the couple live in is in the sole name of one partner and that partner should die without leaving a Will, the other will not necessarily inherit anything, not even the home they lived in together. The surviving co-habitee may only secure an interest if he or she can bring a case based on the law of trusts.

There is also a limited right for cohabitants to secure some provision for their financial support from their partners’ estates on death. Whilst it may be that their minor children are entitled to support, this ends when the children are older. The parent who brought them up may then be left completely adrift, with no further legal redress.

The solution?

Until such time as proper legislative change takes place within England and Wales (Scotland  already has laws governing cohabitation in place since 2006), the best an unmarried couple wishing to live together can do is to plan ahead. Have a solicitor draw up a cohabitation agreement, incorporate a Declaration of Trust and settle a mutual Will to give peace of mind!

Let’s leave the broom jumping safely where it belongs, in the past!

2 Sue Rowlatt FMC Portfolio 2013 (10 of 13)

Sue is a member of the Family team at FM&C Solicitors and may be contacted on +44 (0)1440 761 200 or +44 (0)7462 314 872.

Email: sue.rowlatt@fmc-solicitors.com

When the solicitor’s pen is mightier than the sword…

We have probably all been involved in a dispute at some time in our lives, whether an argument with a neighbour or a disagreement with a service provider who has let us down.

Disputes can be overwhelmingly stressful, particularly if the dispute does not resolve quickly, or as the complainant, we feel that our concerns are not taken seriously.

What starts as a small disagreement can often mushroom into an overwhelming battle, causing untold personal stress and anxiety. We have all experienced the frustration of our complaints falling on deaf ears as we are passed from pillar to post, having phoned somewhere ironically called a ‘Helpline’.

Based on personal experience, there is nothing more frustrating than feeling that you fighting a large faceless corporation which no longer treats you as a valued customer but rather as someone whose concerns are insignificant.

The power of a solicitor’s letter

As a solicitor specialising in dispute resolution, clients frequently tell me that they feel they need the services of a solicitor to ‘fight their corner’ or give them ‘a voice’ which will be heard. I am frequently informed by clients that ‘It is a matter of principle now. Can you just send them a letter….they won’t ignore a letter from a solicitor’.

Sadly, it is a reality that a solicitors’ letter carries more weight. Some years ago, a client approached me feeling completely exasperated by a well know high street organisation. He had a legitimate complaint and had been offered £100 by this service provider as a ‘gesture of goodwill’.

He came to my office for a chat about whether he should accept this token gesture. The offer was derisory, but for him it was not about the monetary compensation offered, but about how he had been treated.  He simply wanted a letter sent on his behalf to make them listen to him properly as a ‘matter of principle’. A solicitor’s letter was able to secure compensation of several hundreds of pounds, but more importantly, it secured an unreserved apology which, to him, was the greatest prize of all.

Price

The dilemma facing most clients is that instructing a solicitor who charges an hourly rate to write a letter can be costly. With the fear of costs spiralling out of control, many simply conclude that they ‘cannot afford to fight on a matter of principle’.

It is also often the case that those in our community who are vulnerable or feel unable to make their voice heard are also without the means to meet these costs.

At FM&C solicitors, in recognition that ‘matters of principle’ are important and that having ‘a voice’ brings peace of mind, we offer a fixed and affordably priced ‘letter of principle’ service to represent your views yet avoid costly litigation.

Kerry - adjusted (640x427)

Kerry Wigg is a partner at FM&C specialising in Employment Law. She may be contacted on +44 (0)7454 866 133 or +44 (0)1440 761 200.

Email: kerry.wigg@fmc-solicitors.com