|
| |
|
Archive for the ‘Writing a will’ Category
Friday, July 15th, 2011
A mystery shopping exercise found that as many solicitors produced poor-quality wills as unregulated will-writers
You’re better off going to a solicitor to do your will than to some bloke who collars you in a shopping centre and offers to do it for £49, right? That is the view, of course, of the Law Society’s chief executive, Des Hudson, who extolled the “excellent advice” solicitors provide in his response to Thursday’s Legal Services Consumer Panel report on the will-writing market.
Unfortunately, the panel’s research does not bear this out. A mystery shopping exercise involving 101 consumers seeking wills from a variety of providers found that as many solicitors produced poor-quality wills as unregulated will-writers, concern over whose practices, prompted by Panorama among others, sparked the whole investigation. One in four wills produced by each group failed to pass muster from a panel of experts. On the basis of the findings, you’re better off going to a bank to get your will done.
Though not a big enough sample to be anything more than indicative, it still makes embarrassing reading for the Law Society, which has long campaigned against unregulated will-writers. And it is arguably of greater concern given that, according to the panel, solicitors produce two-thirds of the 1.8m wills written every year, compared to will-writers’ 10% market share.
The panel told the Solicitors Regulation Authority that it needs to look at the training of solicitors in will drafting and, more broadly, the question of ensuring their ongoing competence, which is not checked once they have qualified.
The report identified problems with the unregulated sector, such as sharp sales practices and lost wills where companies disappear without trace, but equally the panel found that will-writers “provide a valuable alternative to solicitors as they tend to be cheaper and the key element of their business model – providing wills and related services in the home – appeals to consumers due to the flexibility of service”.
It added: “The best will-writing companies at least match the service provided by solicitors.”
A survey conducted by the panel found that 90% of people would recommend their will-writing company to others.
But then none of those happy consumers would know if their will was actually defective. The big difference is that if something goes wrong with a will drafted by a solicitor, there is a raft of consumer protections – including a complaints procedure, indemnity insurance and a compensation fund – to fall back on. With many will-writers, there is nothing.
While the panel said more could be done by trading standards officers and the Office of Fair Trading to improve current standards, it called on the supervisory regulator, the Legal Services Board, to make will-writing a so-called reserved activity. This means will-writers would need proper training and regulation to continue in the field.
As a result, the board has launched its first statutory investigation into whether to extend the scope of regulation, although this will actually go further by looking at what measures are required to protect consumers in the linked probate and estate administration markets as well. There’s not much point in making sure a will is properly written if it is easy for a rogue administering the estate it distributes to run off with all the money.
A danger of regulation is that it drives up costs, which could discourage people from making wills – which not enough people do anyway – and could drive providers out of the market, reducing choice. However, the panel thinks the case to regulate is sufficiently strong and these risks can be mitigated. Research shows that people are not that price sensitive when it comes to wills, recognising the importance of getting it right.
Will-writing, a big market with many services that can be cross-sold, is likely to be a key battleground when new providers enter the law later this year with the advent of alternative business structures (ABSs). Already the Co-op, which has built a £25m legal services business in less than five years largely on the back of probate and personal injury work, has signalled its intention to expand its operation by becoming an ABS at the earliest opportunity. Combining its funeral and probate services would be, dare one say, a classic example of horizontal integration.
Neil Rose is the editor of legalfutures.co.uk
Posted in Comment, Consumer affairs, guardian.co.uk, House News, Inheritance tax, Law, Money, Property, Solicitors, Writing a will | Comments Closed
Wednesday, May 11th, 2011
Q I am separating from my husband and can afford to buy myself a house in cash, but it means using the fund we created for our sons’ deposits. Can the house be purchased in their names and thus form an investment for them to be used after my death as house deposits or as pension funding? I would like this house to be beneficial for them as well as providing a roof over my head. LR
A If your sons are under 18 then no, you can’t buy the house in their names because minor children can’t own property – it has to be held in trust for them. But even if your sons are adults I am not sure why you would want to put a house that you want to live in until your death in their names. Unless you set up a trust giving yourself a life interest in the property, putting the house in your sons’ names would give them the power to sell it. If you don’t want your sons to benefit from the property until after your death, the most straightforward thing to do would be to leave it them in your will. As you are separating from your husband, you should be updating your will anyway.
Posted in Features, guardian.co.uk, House News, Letters, Money, Property, Writing a will | Comments Closed
Saturday, May 7th, 2011
The case of Patricia Jones, ordered to hand half her home to her ex after 18 years, should be a warning to all unmarried couples
There are three things that definitely do not exist, according to the website advicenow.org.uk: the Loch Ness monster, cats’ nine lives and common law marriage. Patricia Jones, the woman at the centre of last week’s Supreme Court case to determine what share her former cohabiting partner is entitled to in the family home, has learned this the hard way.
Jones and her ex, Leonard Kernott, split up in 1993 after sharing a home in Thundersley, Essex, for eight years. Jones paid the £6,000 deposit and mortgage on the £30,000 bungalow while Kernott paid £100-a-week “expenses”.
He moved out in 1993, paying no maintenance for their two children, now both in their 20s. Jones continued paying the mortgage and Kernott brought his own property in 1996, raising the deposit by cashing in a life insurance policy the couple owned and split equally.
In 2008 a county court judge determined that Kernott was entitled to 10% of the property’s value – estimated then at £240,000. He appealed last year and was awarded 50% on the grounds that the couple owned equal shares when they separated and neither had done anything to change the situation since.
Jones hopes the Supreme Court will reverse this decision. But Elizabeth Darlington, a barrister based in Leeds specialising in cohabitee cases, says cases concerning the distribution of cohabitees’ assets often end with results contrary to common sense or fairness.
One client, a policeman, sold his property and put £83,700 into a new property he bought in joint names with his new partner. Because the home was in joint names, they both got 50% of its value when they split, even though she had contributed no equity.
However, it is usually women who lose out, says Darlington – often because ownership of the home is in the man’s name. She cites a couple who bought a home in the man’s name because the woman was still going through a divorce “with the intention that the money she got from the divorce, £60,000, would be her contribution”. Instead the money was used to buy other things, including a sports car for the male partner, and when they split 10 years later he walked away with the entire value of their home.
It doesn’t have to end like this if you take steps to protect yourself early on:
? Buying a home Get legal advice – how you establish ownership can make a big difference if you split up. If you own your home as joint tenants, you own it jointly and equally. If you split up and sell it, you will normally get half, no matter how much you contributed. If one of you dies the other will automatically get the house. If you buy as tenants in common you can own uneven shares in the property. If one dies his or her share will go to the beneficiary named in the will.
In all cases, if there are children a court can order the transfer of the home to the parent mainly looking after them. If part or all of the home is owned by the other it will revert to that partner when the youngest child turns 18.
? Renting a home Consider putting both names on the tenancy. If only one is named that person can evict the other if you split up. If the named person leaves the remaining partner can ask the landlord to put his or her name on the tenancy – but he doesn’t have to agree.
? Draw up a living together agreement This forms a record of what each party is contributing to the household. A court can ignore it but will generally uphold it if what you agreed produces a fair outcome, neither party was under pressure and you were honest about your finances when drawing it up. If you have it drawn up by a solicitor and independently witnessed it will be legally binding.
? Make a will Without one, your property and assets will all go to your blood relations if you die, and your partner may not even be able to stay in your home.
? Children If you are the father of children born before 1 December 2003 and have not married their mother you do not have parental responsibility unless you make an agreement with the mother or apply for a court order. Fathers named on the birth certificates of children born after that date automatically have parental responsibility.
? Visit the Living Together section of advicenow.org.uk for advice and a template for a living together agreement.
Posted in Cohabitation, Family finances, House News, Life and style, Money, News, Property, Renting property, The Observer, UK news, Writing a will | Comments Closed
Thursday, May 5th, 2011
How to protect yourself financially in case you and your partner split up
The website advicenow, which runs a Living Together campaign to make cohabitants more aware of their legal status, points out that there are three things that don’t exist: the Loch Ness monster, cats’ nine lives and common law marriage.
Couples who live together have hardly any rights compared with married couples or civil partners, and most only discover this when their relationship has broken down or their partner has died.
But there are things you can do to protect yourself, provided you are sensible about recognising that you might one day split up, however romantic your relationship is now.
1. Buying a home
Get advice from a solicitor – how you establish ownership of your home can make a big difference to your rights if you split up.
If you own your home as joint tenants, you own it jointly and equally. If you split up and sell it, you will normally get half, no matter how much you contributed to it. If one of you dies, the other will automatically inherit the other half.
If you buy your home as tenants in common, you can own uneven shares in the property, so one partner could own 40% and the other 60%. If one of you dies, that person’s share will go to the beneficiary named in the will.
But even if the property is owned in one person’s name, it is still possible for the other partner to prove they are entitled to a share if they split up. To prevent unpleasant surprises, draw up a living together agreement on moving in that sets out what you have agreed about the home. If you do not intend the non-owner to get a share, spell this out very clearly, or if you do intend to share the home, spell out the shares very clearly.
In all cases, if there are children a court can order the transfer of the home to the parent who is mainly looking after them under the Children Act 1989 to ensure the children are housed. If part or all of the home is still owned by the other partner, however, it will revert to that partner when the youngest child reaches the age of 18.
2. Renting a home
Consider putting both names on the tenancy. If only one is named, that person can evict the other if the couple split up, although reasonable notice should be given. If the named person decides to leave, the remaining partner can ask the landlord to put his or her name on the tenancy, but he doesn’t have to unless ordered by court because you are vulnerable or have children.
3. Draw up a living together agreement
This is the cohabiter’s equivalent of a pre-nup, forming a record of what each party is contributing to the household. The Advice Now website points out that it can help you sort out the day-to-day workings of living together, as well as enabling you to split up with a minimum of squabbling.
Like pre-nups, a court can decide to ignore the agreement, but it will generally uphold it if what you agreed still produces a fair outcome for both of you, neither party was under pressure from the other and you were both honest about your finances when drawing it up.
However, James Thornton, partner with Stowe Family Law in Harrogate, says if you have it drawn up by a solicitor as a formal legal deed and independently witnessed, it will be legally binding just like any other legal contract.
4. Make a will
This is imperative if you want your partner to benefit from any of your assets or even to be able to stay in your home. However long you live together, all your property and assets will go to your blood relations rather than your partner if you die.
5. Children
If you are the father of children born before 1 December 2003 and you have not married their mother, you do not automatically have parental responsibility for them. This means you do not have the right to be consulted for big decisions concerning their lives, such as caring for them if the mother dies or making decisions about medical treatment. Fathers in this position can either make an agreement with the mother or apply to court for an order if she refuses to agree. Fathers who are named on the birth certificates of children born after that date will automatically have parental responsibility.
6. Beware of relying on your partner’s savings for your retirement
You will have no right to these if you split up, and if your partner dies, some pension schemes do not pay survivor’s benefits to unmarried partners. Nick Bamford, of independent financial adviser Informed Choice, suggests cohabitants try to build up separate pensions: even those who are not earning can save up to £2,880 a year into a personal pension, and this will benefit from a further £720 in tax relief.
7. Ongoing financial support
If the couple have had children, the parent looking after them, typically the mother, can apply for child maintenance through the Child Support Agency providing she can prove paternity, says Thornton. However, as a cohabiter she is not usually entitled to financial support herself.
8. Visit the Living Together section of Advice Now
This contains information on all aspects of how to establish a safe and secure cohabiting relationship, and a template for a living together agreement.
Posted in Cohabitation, Family finances, Family law, Features, guardian.co.uk, House News, Law, Life and style, Money, Prenups, Property, Relationships, Renting property, Savings, Writing a will | Comments Closed
Wednesday, April 20th, 2011
Q My two sisters have joint ownership of their house. The younger, 76, has a daughter and grandchildren and is carer for the older sister who is 81, unmarried, and refusing to make a will. We also have a younger sister who has nine grandchildren. Who, under Scots law, would be able to make a claim on the unmarried sister’s estate in the event of her death? MP
A If your oldest sister dies intestate, ie without having made a will, the rules in Scotland say that as she was unmarried and had no children, one half of her estate would go to you and your siblings and the other half to your parents. But if your parents aren’t alive, everything would go to you and your siblings to be split equally between you all. If any of you die before your oldest sister, your share would go to your children on her death.
However, what constitutes your eldest sister’s estate on death depends on whether the deeds to the property she jointly owns with your other sister contain a “survivorship clause” (also known as a “survivorship destination”). If the deeds do contain such a clause it means that either sister’s share of the house will automatically pass to the other when either dies. If there isn’t such a clause in the deeds then each sister’s share of the property will form part of their estate on death.
Posted in Features, guardian.co.uk, House News, Letters, Money, Mortgages, Property, Writing a will | Comments Closed
|
|
|
|
|
|
Where there’s a will should there be regulation? | Neil Rose
Friday, July 15th, 2011A mystery shopping exercise found that as many solicitors produced poor-quality wills as unregulated will-writers
You’re better off going to a solicitor to do your will than to some bloke who collars you in a shopping centre and offers to do it for £49, right? That is the view, of course, of the Law Society’s chief executive, Des Hudson, who extolled the “excellent advice” solicitors provide in his response to Thursday’s Legal Services Consumer Panel report on the will-writing market.
Unfortunately, the panel’s research does not bear this out. A mystery shopping exercise involving 101 consumers seeking wills from a variety of providers found that as many solicitors produced poor-quality wills as unregulated will-writers, concern over whose practices, prompted by Panorama among others, sparked the whole investigation. One in four wills produced by each group failed to pass muster from a panel of experts. On the basis of the findings, you’re better off going to a bank to get your will done.
Though not a big enough sample to be anything more than indicative, it still makes embarrassing reading for the Law Society, which has long campaigned against unregulated will-writers. And it is arguably of greater concern given that, according to the panel, solicitors produce two-thirds of the 1.8m wills written every year, compared to will-writers’ 10% market share.
The panel told the Solicitors Regulation Authority that it needs to look at the training of solicitors in will drafting and, more broadly, the question of ensuring their ongoing competence, which is not checked once they have qualified.
The report identified problems with the unregulated sector, such as sharp sales practices and lost wills where companies disappear without trace, but equally the panel found that will-writers “provide a valuable alternative to solicitors as they tend to be cheaper and the key element of their business model – providing wills and related services in the home – appeals to consumers due to the flexibility of service”.
It added: “The best will-writing companies at least match the service provided by solicitors.”
A survey conducted by the panel found that 90% of people would recommend their will-writing company to others.
But then none of those happy consumers would know if their will was actually defective. The big difference is that if something goes wrong with a will drafted by a solicitor, there is a raft of consumer protections – including a complaints procedure, indemnity insurance and a compensation fund – to fall back on. With many will-writers, there is nothing.
While the panel said more could be done by trading standards officers and the Office of Fair Trading to improve current standards, it called on the supervisory regulator, the Legal Services Board, to make will-writing a so-called reserved activity. This means will-writers would need proper training and regulation to continue in the field.
As a result, the board has launched its first statutory investigation into whether to extend the scope of regulation, although this will actually go further by looking at what measures are required to protect consumers in the linked probate and estate administration markets as well. There’s not much point in making sure a will is properly written if it is easy for a rogue administering the estate it distributes to run off with all the money.
A danger of regulation is that it drives up costs, which could discourage people from making wills – which not enough people do anyway – and could drive providers out of the market, reducing choice. However, the panel thinks the case to regulate is sufficiently strong and these risks can be mitigated. Research shows that people are not that price sensitive when it comes to wills, recognising the importance of getting it right.
Will-writing, a big market with many services that can be cross-sold, is likely to be a key battleground when new providers enter the law later this year with the advent of alternative business structures (ABSs). Already the Co-op, which has built a £25m legal services business in less than five years largely on the back of probate and personal injury work, has signalled its intention to expand its operation by becoming an ABS at the earliest opportunity. Combining its funeral and probate services would be, dare one say, a classic example of horizontal integration.
Neil Rose is the editor of legalfutures.co.uk
Posted in Comment, Consumer affairs, guardian.co.uk, House News, Inheritance tax, Law, Money, Property, Solicitors, Writing a will | Comments Closed