The richer are going to become richer, and the poorer poorer, and it’s not just to do with income. A lot of it is linked to inheritance. It is said that half of the country are set to inherit large amounts, whereas the other half will inherit nothing, or very little.
The study comes from the Institute for Fiscal Studies (IFS) who has said that the reason inheritances are, in some cases, growing hugely, is down to house prices. When property prices rise, and those properties are left to relatives who go on to sell them or even keep them for the price to rise even further, they can make a rather healthy profit.
The IFS has said that around half of Britain’s young people will inherit about 90 percent of the country’s wealth in a few short years. At the moment, 72 percent of people say that they expect to inherit something from their parents. Just a decade ago, that number was at 60 percent.
These figures mean that the inequality between the ‘haves’ and ‘have nots’ will only widen over time, making the country potentially unstable because so much of its wealth will be wrapped up in a relatively small number of people.
Another worry is that the big cuts to inheritance tax that David Cameron unveiled are continuing under Theresa May. This is even though it will actually only benefit a small number of people, but it will affect the country by not bringing in as much money as it once did. The very richest people will effectively be receiving a tax break whilst our essential services are cut.
A Bradford court recently heard the case of a 51 year old woman – Maxine Forster – who, along with her sister, was given power of attorney over their mother. They had arranged this because their mother, Betty, was beginning to suffer from dementia.
However, it was claimed that Maxine stole £50,000 from her mother. She is alleged to have done this over the course of six years (between 2006 and 2012) by taking small amounts at a time. This then impacted on the amount of money that was left when Betty died, and therefore Maxine’s sister, Elaine Welch, was unable to receive the inheritance that would have been due to her. Sadly, Elaine died in 2015. However, her husband continued the court battle as he believed she would have been owed money, and it was in the interests of justice if nothing else that Maxine was punished.
Mr Welch has even suggested that the stress of the situation caused Elaine’s cancer to return, after she had previously beaten it.
The judge who heard the case sentenced Maxine to 8 months in jail, although the sentence was suspended for a year.
The UK’s population is aging and increasing. That means that more and more people will eventually need residential care, and that can cost many hundreds of thousands of pounds. That can be taken out of someone’s savings and assets, and in turn that means that their children’s inheritance can be severely reduced.
Since care homes are means tested, if you have over £27,000 capital per annum, you will have to pay. For many, their initial thought is that they should hide their assets, or give them away as gifts so that they don’t get swallowed up in the care system. But is this the right thing to do if you want to protect your children’s inheritance?
There is really only one big ‘don’t’ when it comes to trying to prevent any inheritance from being swallowed up by the government and that’s don’t give your house to your children. It may sound like the ultimate solution, but it’s actually very bad news. It even has a name – the deprivation of wealth. Your local authority has the right to check over your financial records, and they will discover anything along the gifting lines. If the authority believe that you deliberately gifted the property to avoid paying fees, they can reverse the gift, and you will potentially lose it all.
As for the ‘dos’, one good idea is to become joint tenants. For married couples, the ownership details of a property can be changed so that rather than being join owners, you will be tenants in common. This means that within each person’s will they can leave their half of the property in trust to their children – and not to one another. This means that if one half of the couple dies, the other person can stay in the house. However, if they did need to go into a care home, only half of the property would be valued to be taken into account.
Another definite ‘do’ is to appoint a lasting power of attorney. An LPA is someone who is given the power to make decisions for you should you become unable to do so yourself. If you still jointly own your property when you need to go into care, but are unable to make any decisions for yourself, the LPA will be able to help your partner and the inheritance too.
A seven year jail sentence has been handed down to a man who carried out a scam that revolved around a supposed inheritance, and duped two people out of almost $2.4 million.
Don Brendan Robert was given the long prison term so that it could act as not just a punishment, but also as a deterrent, as more and more of these kinds of scams are being carried out. Robert pleaded guilty to just 25 charges of fraud, although he was charged with a total of 450.
Robert used the money that he scammed out of two separate men to fund a lavish lifestyle, and pay off previous debts. The scan revolved around the lie that he had been left a large amount of money by a relative, but that probate was taking a long time. Due to this, the managed to persuade two gentlemen to lend him large amounts of money after promising them that he would not only pay them back, but give them a percentage of his ‘inheritance’ once it came through.
Robert continued these lies for three years, spinning more and more elaborate tales as to why the inheritance had not yet come through. The main problem was that these imaginary funds had been seized by the Singapore government, and had been frozen by the Commercial Affairs Department.
Robert’s scam is thought to be the largest ever carried out in Singapore.
Sometimes it really is a matter of being in the right place at the right time, and the old adage of location, location, location really does pay dividends. Literally in the case of the residents of a Spanish village called Cerezales del Condado.
This tiny little village can be found in the north west of Spain, in a province called Leon. It is unremarkable in most ways, although a pretty little place. However, when the founder of Corona beer, Antonio Fernandez, died, he left everyone in the village a little something – a little something that added up to around £2 million each.
Fernandez died in August 2016 at the age of 99. He left school at the age of 14 when his parents could no longer afford to pay the fees, but that didn’t stop him from amassing a huge fortune that is estimated to be in the billions through the Corona beer brand which is the second most imported beer in America. Even after he retired, Fernandez remained honorary chairman of the board from 2005 until he died.
Part of that fortune – approximately £200 million of it – was left to the residents of Cerezales del Condado, where he had been born and where he had spent the early years of his life in abject poverty.
The villagers are hailing the man as a hero. The area is not a wealthy one, and the majority of them residents have never had much money at all. Now they are overnight millionaires.
Even the former king of Spain, Juan Carlos, acknowledged Antiono’s generosity through his life.
When someone dies, it is often the case that family members can run into issues regarding how the assets are going to be distributed. Whether it is someone saying that they don’t want anything from the deceased, or the family wanting to go against the wishes of the deceased and distribute the assets how they want to do it, this kind of problem can cause arguments at a difficult time.
If the deceased’s wishes need – or are requested – to be modified after the will has been executed, then the heirs all have to enter into an Agreement of Heirs. This is a written document that must be signed by everyone involved. It acknowledges that they have a right to inherit, and sets out how the new agree inheritance will be carried out, which will be different to that written within the will.
Because this is such an important document, the best advice is that it should be drawn up by a lawyer.
An Agreement of Heirs can even be created if there is no will. If the beneficiaries of the estate don’t agree with how the rules of intestacy would divide their inheritance up, they can go to a lawyer to draw up an Agreement of Heirs to show that they have discussed the estate and agree to a different course of action.
An Agreement of Heirs makes the distribution process easier, but it does not mean that probate can be skipped. Probate will still need to be carried out if the deceased owned assets that require it, no matter how differently they are distributed from what was written in the will.
Some people are pleased to receive an inheritance (despite the fact that it means someone they loved, or who at least loved them, died), and some would prefer not to for various reasons. But no matter what, some inheritances which, from the outside, might not look like much, or might not be overly welcome, could actually be worth a lot more than even the testator realised.
This was the case recently in France when a man inherited a house from a deceased relative and soon found that he had a lot more than he bargained for in terms of what he had been given. Because, hidden in strange places throughout the entire house were gold bars and coins. Not just a few, not just a handful, but around 5,000 coins, two 12kg gold bars, and 37 1kg ingots. They weight over 100kg in total, and they are all worth millions – around £3 million in all.
The treasure trove was apparently extremely well hidden, and it is unclear whether the beneficiary of the house was meant to find it at all. But find it he did when he began to move the old furniture out. The first thing he found was a tin of coins which had been screwed in place under a sofa. Once he discovered this and more, he called a solicitor as he wasn’t sure what he should do with the stash.
After further investigation, it was discovered that there were certificates of authenticity also hidden within the house, and the gold had been bought in the 1950s and 1960s. It has now all been sold.
But what about inheritance tax? The haul could well be liable for a 45 percent inheritance tax, as well as three years’ worth of back taxes if the original owner failed to declare the gold in the first place. And considering how well he had hidden the treasure, it’s unlikely that he did.
If an heir hunter phoned you, knocked on your door, even contacted you through the post or via email, what would you think? Would you be excited or wary? Would you even believe what they had to say? After all, someone coming to you to tell you that a family member you barely knew, if you knew them at all, had died and you were entitled to a share of the estate is not something that happens every day.
However, with more and more people failing to make a will, and as families move further apart, the chances of exactly this scenario happening are increasing.
Although the majority of heir hunters are honest and have done a huge amount of background work before even coming into contact with you there are, just like in any industry, problems too. Heir hunters need to be paid just like anyone else, and many of them receive a percentage of the estate they are offering. So, the bigger the estate, the more money they get. This is not an inherently bad thing, but remember: all heir hunters have the same information, and if one has got in touch, others will too. It’s wise to find out what each one’s terms and percentages are before signing up with anyone.
Due to this, it can be a bit of a race for the heir hunters to find the relatives of those who have died intestate. And they can utilise fairly pressurised sales techniques to persuade you to sign with them rather than another company. This is not fair, and it’s not right, and you, the beneficiary, are the one in the position of power – you don’t have to sign with the person who is telling you to, especially if their percentage take is too high.
The good news is, if the deceased person died less than 30 years previously, there is no huge rush – the estate won’t be declared ownerless just yet, and the money won’t go to the Treasury. So you’ve got time to do some important research and have some breathing space.
Some heir hunting companies – IWC included – actually offer fixed price fees. This means that no matter what the inheritance actually is, you will know in advance exactly what you will be paying to receive it.
So when the heir hunters come calling, don’t rush anything. Think hard. Contact IWC. We’ll find your inheritance, and we won’t charge the earth for it either.
Although we all know that we should write a will, over half of us still haven’t. And that could cause some huge problems for our loved ones when we die. People finally get around to making their wills for various different reasons – here are some of the main ones. Perhaps you’ll find your reason in this list, in which case, please don’t hesitate to get in touch with us to make your will. In fact, you should do that even if your reason isn’t below…
1. The Crown
Even if you have no living relatives and no one you want to leave your property and possessions to, you should still write a will. It may not sound like something you need to worry about, but if you have no will then your estate will go to the Crown instead. That’s the government, in other words. If you don’t want this to happen, you could write a will that specifies a charity to take your possessions.
2. Your Ex
If you are simply separated rather than divorced and you don’t have a will, your ex-spouse could be entitled to all of your assets. This is true even if the split was many years ago. Don’t want that? Write a will.
3. Family Arguments
It shouldn’t happen, but it does. A lot. If a will is not made and someone dies, family members tend to get upset about what they haven’t been left. It can lead to massive disputes and family break downs. You don’t want the last memory your loved ones have of you to be that you caused huge problems for them.
4. The Partner
Without a will, your partner or spouse is only automatically entitled to things that you own jointly. Everything else will be split – that includes the house they live in.
5. The Children
If you have children with someone you’re not married to, they will not be entitled to anything when you die. That’s just how it works. Unless, of course, you write a will.
6. The Grandchildren
If you are married to your children’s mother or father, they will automatically be entitled to some part of your estate if you die without a will, which might be fine for you, but for some people it isn’t. Some people would rather than grandchildren received their inheritance instead – so write it in a will if that’s what you want.
7. Inheritance Tax
Dying intestate can mean that your family pay more inheritance tax than they need to.
8. Dying Together
If you and your spouse die at the same time (in a car accident, for example) then the person who is the oldest is said to have died first. Their possessions will pass to the spouse but, because they are also dead, the possessions will then pass to the spouse’s family. If you are the oldest in your relationship, in this situation your family would receive nothing.
This makes for some interesting reading. If you do wish to get in touch, please do so.
A protective property trust, property protection trust, or life interest trust is a type of will that is designed specifically to stop your home from being sold to pay for any long term care home fees that you may need to pay. If the property is owned by two people, then after one of the couple dies, their share of the property passes into the trust. It means that the survivor is then able to benefit from the entire property – and upon their death the trust passes to other people, most often the children.
A protective property trust is ideal for those who are worried about the cost of long term care when they are older meaning that they have to sell their home, even though they would prefer for it to go to their children or other specified people.
In order for this to work, the family home needs to be held in joint names, as tenants in common. Then, after the death of the first owner, the title deeds will need to be transferred into the joint names of the surviving partner, and the trustees (who can also be your executors). If required, the surviving spouse can also be a trustee.
No matter who the trustees are, they cannot order the remaining spouse to leave the property – it is theirs for life. If that person needs to move into residential care later on, the share of the property in trust is not seen as an asset, and therefore it can’t be taken into consideration when looking at care home fees. However, the share that is owned by the spouse living in the house is seen as an asset. Houses cannot be split in half to sell, so it is unlikely that it will be used to pay for a care home.
If the surviving spouse decides to move home at any time, this is perfectly possible, and arrangements can be made for a trust to be set up on the new home instead.