Legal Protection

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Legal Protection

Commitments Protection have always tried to help our clients protect their families and their homes with their different products.

Our company ethos is all about delivering value to our clients through the provision of well thought out products and services at an affordable cost.

Over the last 12 months our lives have changed dramatically with the International pandemic, Covid-19. Many have lost family members, many lost their jobs and recently within the UK the death rate has surpassed 100,000.

The effects this has had on all families has led with Commitments Protection looking to help safeguard each families future by protecting their assets.

Our ‘Legal Protection’ solution is our new flagship service working with Lawcost Legal

Lawcost Legal are introducing legal products to clients that appeared historically to be Unaffordable. The aim of Lawcost Legal is to offer a range of products that the client needs to protect their assets and keep them within the family.

Where applicable we will find a way for you to spread the cost if required.

The aim of this page is to explain to you as briefly as possible the benefits of each product and why you should consider purchasing either one or all of them.


Background - Intestacy

When the times comes for a person to pass, if NO will or Trust has been made, they die in what is called Intestate or often called the Rule of Intestacy.
 
The law about exactly who gets what is different in England, Wales, Scotland and Northern Ireland, but there are some common problems wherever you live. 

Common rules if you do not make a will. 

  • If you are not married and not in a civil partnership, your partner is not legally entitled to anything when you die. 
  • If you are married, your husband or wife might inherit most, or all your estate and your children might not get anything (except in Scotland). This is true even if you are separated but not if you are divorced. 
  • If you have children or grandchildren, how much they are legally entitled to will depend on where you live in the UK – but if you make a will you can decide this yourself. 
  • Any Inheritance Tax that your estate has to pay might be higher than it would be if you had made a will. 
  • If you die with no living close relatives, your whole estate will belong to the Crown or to the government. This law is called bona vacantia.

Note:

  • Any assets that you own jointly with someone will not pass under the intestacy rules but will pass by survivorship to the surviving joint owner.
  • But be careful, you need to own the asset as ‘joint tenants’ and not as ‘tenants in common’ for survivorship to apply.
  • Who will inherit if you die without a will? 
  • You can find out exactly who will inherit your property if you die without a will by using the online calculator on the GOV.UK website.
  • This covers variations in the rules for England and Wales, Scotland and Northern Ireland.

Over our lives we will be looking to build an asset base to pass onto our children, whilst during our lives we work hard to benefit the family. We have seen many families lose their assets as they do not understand the power of:

  • Wills
  • Power of Attorney
  • Trusts

Wills

A Will is probably one of the most important things that you can do to ensure that when you do pass away then your estate is distributed to the people that you want to receive the benefits There may be challenges as you have to wait for Probate to be granted however having a Trust can mean an immediate distribution of the Will 

Four reasons why you need a will?

1. A will makes it much easier for your family or friends to sort everything out when you die – without a will the process can be more time consuming and stressful. 

2. If you do not write a will, everything you own will be shared out in a standard way defined by the law – which isn’t always the way you might want. 

3. A will can help reduce the amount of Inheritance Tax that might be payable on the value of the property and money you leave behind. 

4. Writing a will is especially important if you have children or other family who depend on you financially, or if you want to leave something to people outside your immediate family. 

Your wishes and who carries them out (Executor)

Your will tells people two very important things: 

1. Who should have your money, property, and possessions when you die? 

2. Who will oversee organizing your estate and following the instructions you leave?

In your will – this person is called your ‘executor’, and you can name more than one person if you want to.  You can also use your will to tell people about any other wishes you have, like instructions for your burial or cremation.

Your executor will do their best to make sure your wishes are followed as long as, they don’t involve breaking the law.

It might not always be possible for your executors to carry out your instructions.
For example, a person you want to leave something to might die before you do, but if you have a will there is a better chance of things happening the way you want. 


Make sure your will is legally valid.

Your will does not have to be on special paper or use a lot of legal language. 

A document is a valid Will if it: 

  • Says how your estate should be shared out when you die. 
  • Was made when you were able to make your own decisions and you were not put under pressure about who to leave things to. 
  • Is signed and dated by you in the presence of two adult, independent witnesses, and then signed by the two witnesses in your presence – the witnesses cannot be people who are going to inherit anything from you (or their husband/wife or civil partner.)

How to start making a Will

If your family is small and you want to leave everything to them, making your will is
fairly straightforward.

If your situation is more complicated – for example, if you have a second family or you
want to leave money and gifts to lots of people – you will need to plan more carefully.

Either way, do not put it off – make sure that what you leave behind will go to the people you intended.

What happens if you do not leave a Will?  

If you do not have a will when you die, your money, property and possessions will be shared out according to the law instead of your wishes. This can mean they pass to someone you had not intended, or that someone you want to pass things on to ends up with nothing. 

Do not let this happen to you 

When one of two brothers died suddenly, his whole estate automatically went to their father, who had left them 40 years earlier and had not been in contact since.

His brother, who he was close to, got nothing

When you die without leaving a Will, the law decides who gets what and how much.
It does not matter what your relationship with those people was like when you were alive.

By leaving a will that says clearly who should get your property and money when you die, you can prevent unnecessary distress at an already difficult time for your family or friends. 

Some parents have had to sue their own children to get a share of their partner’s estate when their unmarried partner dies. 

The law says that in this situation the children get everything.

Power of Attorney

It is important to note that dementia is on an exponential curve and therefore a Power of Attorney must be taken and put into place before dementia occurs as the individual must be of a sound mind to appoint other people to look after their interests whether it be health wise or financial.

What are the Types of Powers of Attorney and what are the Differences? 
 
A power of attorney is a legal document that allows you to appoint another person to take control of your affairs should you become unable to effectively do so.

The person appointed becomes the agent, or attorney-in-fact, and the person who appoints is known as the principal.

There are various types of powers of attorney and the one that you choose depends on the requirements of your current situation.

1. Non-Durable Power of Attorney

2. Durable Power of Attorney

3. Special or Limited Power of Attorney

4. Medical Power of Attorney

5. Springing Power of Attorney

Trusts

Trusts seem complicated however they are not. All assets when placed into a Trust can only be received by the beneficiaries and it is almost like you having your own SAFE YOU HOLD THE KEY;

Your assets always remain in your possession (technically owned by the Trust so that nobody can gain access) and it is only once you have passed that the key is then transferred so that others whom you nominate can benefit from the Trust.

Example; If you have assets of over £23,000 (January  2021)  the  government would  take  your house and use it to pay for any residential care that you may require. 

If you were to have your property put into a Trust, then this asset is ignored (all assets are ignored) and you would not have to pay for the residential care as your house would remain in the Trust until you passed or decided to do something else with it.

You can place almost anything into a Trust for various reasons that will assist you with inheritance tax planning.

REMEMBER

YOU CAN DO WHATEVER YOU WANT AT ANYTIME WITH ANYTHING YOU PLACE INTO THE TRUST YOU CONTROL YOUR ASSETS.

‘Do not put trust into your money – put your money into a Trust’.

What is a Trust?

A trust is a legal arrangement where you give cash, property or investments to someone else so they can look after them for the benefit of a third person. 

So, for example, you could put some of your savings aside in a trust for your children.

There are two important roles in any trust that you should understand:

1. The Trustee is the person who owns the assets in the trust. They have the same powers a person would have to buy, sell, and invest their own property. It is the trustees’ job to run the trust and manage the trust property responsibly. 

2. The Beneficiary is the person who the trust is set up for and is usually unable to manage the trust assets for themselves because they are too young, or they are not good at managing their own money. The assets held in trust are held for the beneficiary’s benefit. 

What does a Trust do?  

A trust can be a good way to cut the tax to be paid on your inheritance, but you need professional advice to get it right. Always talk to a solicitor/independent financial advisor. 

If you put things into a trust then, provided certain conditions are met, they no longer belong to you.
This means that when you die their value normally will not be counted when your Inheritance Tax bill is worked out. 

Instead, the cash, investments or property belong to the trust. In other words, once the property is held in trust, it is outside anyone’s estate for inheritance tax purposes. 

Another potential advantage is that a trust is a way of keeping control and asset protection for the beneficiary; a trust avoids handing over valuable property, cash, or investment whilst the beneficiaries are relatively young or vulnerable. 

The trustees have a legal duty to look after and manage the trust assets for the person who will benefit from the trust in the end. 

When you set up a trust you decide the rules about how it is managed.

For example, you could say that your children will only get access to their trust when they turn 25. 

IT IS EXTREMELY IMPORTANT THAT WHEN YOU NOMINATE A TRUSTEE TO IN EFFECT LOOK AFTER YOUR ASSETS THAT YOU CHOOSE THE CORRECT PERSON AND PROBABLY APPOINT A SOLICITOR TO ENSURE THAT YOUR REQUIREMENTS ARE VERY SPECIFIC.

PLEASE READ THE ABOVE CAREFULLY UNDERSTANDING THAT YOU CAN PUT MONEY ASIDE FOR EXAMPLE TO PAY FOR A WEDDING OR GRANDCHILDRENS’ EDUCATION, HOWEVER WHEN THE TRUST IS SET UP CORRECTLY YOU WILL STILL HAVE TOTAL CONTROL OVER THE ASSET SO SHOULD YOU WISH TO CHANGE YOUR HOUSE OR TAKE OUT AN INVESTMENT THEN YOU CAN DO SO

If you would like to talk about any of these Legal Services or make use of them, please select Quote below, and we will ask Lawcost Legal to call you and discuss this with you.  

 

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