New English intestacy rules
The new English intestacy rules came into force on 1 October 2014 – but how do they affect you?
Well, if you are cohabiting with a partner, regardless of how long you've been a couple or whether you have children together, there is no change whatsoever and you run the risk of leaving your partner with absolutely nothing.
Married with children
If you are married with children, the law used to state that your spouse or civil partner would receive the first £250,000 of your estate. The children would be given half of the rest, with the other half being kept by the remaining spouse as "life interest", handed down to the children when that spouse died. Now, the spouse is entitled to £250,000 plus half of the remainder. The other half is automatically made available to the children once they turn 18.
Married without children
Where once the surviving spouse was entitled to £450,000 and half of the rest, with the other half going to blood relatives beginning with parents, the spouse will now receive the proceeds of the entire estate.
A loophole in the law, which used to indicate that children who were subsequently adopted after the death of one or both of their parents could potentially lose their inheritance, has been closed. This now means that they will receive their inheritance, even if they go on to be adopted by someone else.
As mentioned earlier, unmarried couples run the risk of leaving their partner without any inheritance whatsoever. If there are no children from the partnership, the deceased's entire estate goes to blood relatives – parents, siblings, nieces and nephews. If there are children however, the same rules apply, except the children will be first in line to receive the inheritance.
Although we always stress to all individuals the necessity of making a will, this is especially valid for couples who may have lived together for years and even had a family but never married. Please be aware that despite these new intestacy rules, if no will is in place then your partner will receive nothing in the event of your death.
Beware of cold calling funeral planners
It has been reported that there has recently been a spate of cold calls to unsuspecting consumers, by funeral planners selling financial plans to cover funeral costs.
A Somerset newspaper indicated that families within the town of Portishead had been targeted by these organisations both through the post and on the doorstep. What many don't realise however, is that there are strict terms and conditions attached to many such plans. In this instance, the plans are only valid, should the grieving family use specific funeral directors – not necessarily their local firm.
This smacks very much of a marketing referral scheme – certainly not appropriate given the stress and grief being experienced by loved ones during this time.
With average funeral costs now exceeding £3,500, it is wise to plan for the future. However, it is always best to do the homework beforehand and examine all terms and conditions very carefully. A reputable funeral planning agency will respectfully allow potential customers time to digest all the information, ensure that each aspect and restriction is understood and invite detailed questions, so that the customer can ensure that what is being discussed, is the right plan for their specific requirements.
A "sales approach" used by a firm selling funeral plans should always be viewed with a great deal of cynicism.
Happy to talk about your funeral?
The days of being reluctant to discuss our own death are well and truly over it seems, with over two thirds of over 50s saying they are happy to talk about their funeral arrangements.
Interviewing 904 adults over the age of 50, Market intelligence organisation Mintel discovered that seven in ten also wanted their funeral to be a celebration, rather than a sombre affair. 76% of those indicating they'd prefer to have their life celebrated were women.
Whilst one in five said that they had no specific preference with regard to funeral arrangements, 16 percent said that they had left written instructions about how they wanted the ceremony to be conducted, and 26 percent also indicating that they had begun to plan for the inevitable.
Interestingly, only 39 percent of respondents felt that religion should play a key part in their ceremony.
Although for many generations, the idea of death and the issues surrounding it have been seen as awkward, it seems that we as a nation are moving away from this culture – perhaps, as Mintel suggests, because we are an ageing population.
Over a quarter of those interviewed said that they had taken out an insurance plan to cover funeral costs, with the average funeral now costing around £3,600.
Increasing house prices to bring inheritance tax misery
Figures released by the Office for National Statistics have revealed that July saw the most intense property price rises since before the recession, meaning thousands more families are set to be saddled with inheritance tax debt.
Prices are said to have increased by a whopping 11.7%, making the average value of a British home around £272,000 or £337,000 in the south east and a staggering £514,000 in London.
Inheritance tax is charged at 40% above the nil rate threshold of £325,000 or £650,000 for married couples. Although there have been calls to raise this threshold in order to ensure that only the wealthy are affected – as was the original intention, the government has so far refused to do do. Currently, this threshold has been frozen until at least 2018.
This reluctance to remove middle class families from the threat of what is essentially a wealthy tax must inevitably make sceptics of us all. The government continues to make millions from this "death tax", despite the many stories of cash-strapped loved ones left behind, struggling to pay the bill on their deceased relative's estate. Remember of course that the inheritance tax bill must usually be paid before any money is released from the estate.
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Brother loses inheritance to business startup
A brother learned recently that his other brother had fraudulently taken his share of their mother's £1.5 million inheritance fund,using it instead to help a relative to set up an online gaming company.
As executor of the will, it was Peter Howes' duty to ensure that the £1.5 million estate was distributed fairly between himself and his brother, in compliance with his mother's wishes. Instead, he forged his mother's and brother's signatures in order to cash in trust funds, moved funds from the sale of the family home into his own personal bank account and cashed in two life insurance policies.
Ignoring the fact that his brother Jonathan was entitled to half of the inheritance, Peter instead fraudulently used the money to buy a 40% stake in an online gaming company which was set up by a relative of his wife, Jane.
It was only when Jonathan entered into discussions with his late mother's solicitors about problems regarding probate, that the illegal activity came to light.
When the matter was brought before Bristol Crown Court, Peter was found guilty of five counts of fraud. He is yet to be sentenced.
It's such a shame that this man's greed has no doubt damaged his relationship with his brother for good and would have left his mother heartbroken – a sad ending to this woman's life.
Storage of wills
When choosing a will writer, it's always advisable that you ask about storage of wills.
A will writing firm will usually offer to keep drafted wills in storage indefinitely, so that when the time comes for executors to seek out the details, the deceased's express wishes can be supplied to them without any problem.
Sadly, as with any industry, there are unscrupulous firms out there who may well go out of business before the wills are retrieved. What happens then?
Firstly, you should always do your research to ensure that the will writing firm you choose is well established and has an excellent reputation. Secondly, it should be a member of an organisation such as The Society of Will Writers. This self-regulating body offers a degree of protection, so that if one of its members acts unprofessionally, leaving a customer high and dry, the Society would at least pick up the pieces and rectify the situation.
Be wary of simply choosing the first will writing company that appears at the top of your online search. Ensure that its website includes valid testimonials and that it offers exceptional customer service. It's never wise to automatically choose the cheapest firm, either. Use your head and seek out the most reputable will writing services in the country – you could save time, money and anxiety in the long term.
Unclaimed ashes cause problems for undertaker
One of the more unusual stories in the press recently tells of a Southampton undertaker, who claims to be storing over 400 sets of cremated ashes, stretching back almost five decades.
Despite most relatives normally collecting their deceased loved one's ashes within a day or two of the cremation, surprisingly there are also a small number of people who leave it much longer – or even don't collect them at all. Presumably, either they don't want to have to face the further task of distributing the ashes, which can be too distressing for some, or sadly, sometimes there has been a breakdown of relationship within the family circle and so no-one comes forward to claim them.
The problem with this particular undertaker has become so difficult that it has actually put out a public plea, to identify any potential relatives and ask them to come forward to remove the ashes.
The National Association of Funeral Directors has its own guidelines, recommending that undertakers hold onto unclaimed ashes for a period of at least five years, so the fact that the Southampton undertaker is still holding some, after a period of over forty years, is amazing.
Research has already been undertaken to find out the next of kin for some of the ashes – a task which unfortunately was fruitless, and so the net has now widened to find any family members from the next generation.
Additional funeral costs for war hero
You may never have considered that moving house may mean additional funeral costs, if you know where you want to be laid to rest.
Such was the case for 91 year old war hero James Graham, who has always expressed a wish to be buried alongside his parents, having never married or had children.
Being an organised planner, James paid for his burial plot 20 years ago, when he lived in Cantril Farm, Liverpool. Unfortunately, Cantril Farm was later demolished, with all residents being relocated. James went to live in Knowsley but was still happy in the knowledge that his last resting place would be in West Derby Cemetery in Croxteth, next to his parents.
It was only when he attempted to responsibly prepay for his funeral, that James was given the devastating news that because he had moved out of the Liverpool area over five years ago, his funeral costs would in fact come to £1,300, rather than the £695 he had been led to believe. This additional money, Liverpool council explained, was to cover employing contractors to open the plot, administration costs and maintenance of the cemetery.
Unfortunately, this now means that James will be unable to entirely fund his own burial costs – a sad and bitter result for this man who was awarded a medal for his actions during the war, in Italy and Egypt.
Scottish council blasted for new funeral rules
South Lanarkshire Council has been criticised for being discriminatory, after outlining new rules to funeral directors, regarding the cremation of obese individuals.
In a letter to local funeral directors, the council states that its crematorium in Blantyre is only able to hold one service each day for any individual weighing over 21 stone. This ruling may of course create a backlog of services and delay families from being able to lay their loved one to rest.
In addition, the council says that any such funeral service must take place before 11am, creating potential problems for those having to travel a significant distance to attend the service.
Danny Maxwell, bereavement service manager for South Lanarkshire Council, stresses that the new ruling was brought in to comply with Health & Safety regulations and instructions from manufacturers. However, one of the funeral directors concerned feels that it is unfair and that the council is discriminating against people who are over that particular weight.
With body sizes continuing to increase within both the adult and child populations of the western world, surely this problem will grow. Authorities must therefore consider how they will cope with providing crematorium services for a higher number of obese individuals over the longer term – and begin investing now. Everyone deserves to die with dignity and for families to be told that their loved one's service has to be especially organised, can only cause additional distress.