Make a Will during November and donate the fee to charity

Will Aid Solictor graphic size 92x100This month (November 2014) is Will Aid month. Will Aid is a partnership between members of the legal profession and nine of the best loved UK charities which has been running for over 25 years.

My firm, Watson Ramsbottom Solicitors, are supporters of the Will Aid campaign and we are taking part once again this November.

Last week to coincide with the start of this year’s campaign, I was invited on to the breakfast show on BBC Radio Lancashire with Graham Liver to explain how Will Aid works. You can hear the clip from the show here:

We will waive our fee for drawing up a basic Will and instead invite our clients to donate to the Will Aid group of charities. The suggested minimum donation £95 for a single basic Will and £150 for mirror Wills.

The money raised is shared by the nine Will Aid charities* and is used to transform the lives of people in the UK and around the world.

Will Aid has raised over £15 million since its launch over 25 years ago and an estimated £95 million has been pledged as legacies by people making their Will through the scheme. The campaign is proud to have helped more than 275,000 to write a proper Will with a professional solicitor.

Having an up to date and properly written Will is the only way to be sure that your money and possessions will be distributed according to your wishes. It is also the only certain way to avoid difficulties for your relatives and friends after your death. By making a Will with Will Aid you will be protecting your loved ones’ future and helping to raise money to support the vital work of the Will Aid charities.

For further information or to make an appointment to make a Will please call:
Stuart Maher TEP on 01254 88 44 22 or email stuart.maher@watsonramsbottom.com

Together we can make a real difference to your loved ones security in the future and at the same time help the thousands of people in the UK and around the world helped by the Will Aid charities.

*The Will Aid charities are: ActionAid, Age UK, British Red Cross, Christian Aid, NSPCC, Save the Children, Sightsavers, SCIAF (Scotland) and Trocaire (N. Ireland).

Lasting Powers of Attorney – Can digital technology help more people protect their future?

The announcement by the Ministry of Justice last month to postpone plans to introduce a fully electronic and on-line process for the creation and registration of Lasting Powers of Attorney is welcome news for many of my clients, regardless of their age, health and wellbeing or digital and on-line know how.

The Government has been trying to bring in a system of digital Lasting Powers of Attorney since 2011, but members of my profession clearly share my view that the necessity of a signature to a paper-based form is still the best method of reducing cases of fraud, undue influence and unfair pressure being applied to those creating Lasting Powers of Attorney.

It ensures that all members of society can access a system to put in place measures which will ensure that both their property and financial affairs can be managed and decisions made about their health and welfare in the event of their sudden loss mental capacity or a gradual deterioration in their mental health.

This news is therefore welcomed, but in itself highlights the wider and more significant issue of how many people do not put in place Lasting Powers of Attorney to protect themselves in the event of the onset of mental incapacity.

The Government’s decision not to proceed does bring with it a missed opportunity (which formed part of the plan) to combine the two Lasting Power of Attorney documents that one can create in respect of property and financial affairs and health and welfare decisions, into a single document. My own representations to the Government would be to look at this specific issue again as quite often the additional expense of dealing with a Health and Welfare Lasting Power of Attorney can make the cost of creation of such documents prohibitive for a number of my clients. Any measures which can be taken to encourage more people to protect their future by simplifying the process and reducing the cost of doing so whilst maintaining the integrity and security of the signed LPA document should be a priority.

The announcement should however serve as a reminder to us all of the importance of Lasting Powers of Attorney, appointing people who we trust to be able to assist us and ultimately deal with our affairs in the event that we are unable to do so ourselves.

To discuss a Lasting Power of Attorney or matters generally relating to the administration of the affairs of a loved one who has issues with mental capacity, please contact me, Stuart Maher, on 01254 884422 or stuart.maher@watsonramsbottom.com .

Have you been properly assessed by Social Services?

It is an increasing concern for many of my clients as to whether or not they have been provided with full and frank information about the care services and financial assistance that is available to them or to their loved ones from the Local Authority when they or a relative move into a residential or nursing home.

It is seemingly the norm in some areas to provide people in need and their loved ones and representative with some but not all of the information for them to be fully informed of their position and to come to a decision as to what they may be entitled. A policy of providing information which would support the Local Authority’s preferred course of action, rather than all available information, seems the norm and seems particularly to be the case for the people of East Lancashire.

In respect of entitlement to assistance with funding the cost of long term care, it is common practice to give misleading information, deliberately or otherwise, leaving many people ill informed about what they can and cannot do with their assets, and in the worst cases forcing them to sell their home to help fund the cost of their care when there is no obligation nor need to do so.

In many recent cases I have found that married care home residents were paying too much of a contribution towards the cot of their care, which was leaving the non-resident spouse with insufficient funds to maintain an adequate standard of living.

I would urge anyone who is concerned that they or their loved ones have not been appropriately assessed by the Local Authority, or simply wishes to check that the assessment is accurate or require further information as to what the resident may be entitled, please contact me on 01254 884422 or stuart.maher@watsonramsbottom.com

Are all Care Homes bad?

The recent BBC Panorama programme highlighted the quite horrific treatment of residents at the Old Deanery at Bocking, near Braintree. Whilst the shocking incidents clearly cannot be tolerated in any care setting, it is very pleasing that this is far from the norm and that the vast majority of care homes provide an exceptional level of care for some of the most vulnerable in our society.

In my capacity as an Attorney acting under an Enduring or Lasting Power of Attorney, or appointed as a Deputy by the Court of Protection, I have the pleasure in assisting a number of my clients in relation to the administration of their property and financial affairs at the latter stages of their lives.

In cases where my clients have had the foresight of putting in place Enduring or Lasting Powers of Attorney appointing myself as a professional Attorney to assist them in managing their affairs in the event of their mental incapacity, they have been able to choose the identity of the person they trust to manage their affairs in the circumstances which arise, where they are unable to do so themselves.

Additionally, despite the fact that being appointed by the Court as a Deputy is rarely at the choice of the clients, the clients and their family are assured that the appointment of a professional Deputy will ensure that the personal affairs are managed in the most appropriate manner for the remainder of their days, as the appointment is subject to annual scrutiny by the Court.

It is an important part of my role in managing these client’s affairs that I visit them regularly in residential care homes to assess their health and well being and to discuss the care being provided to them. In doing so, any present health and social issues and any other matters relating to their general well being can be discussed thoroughly with the care home management and day-to-day staff.

In my visits to various care homes around the North West of England I am always pleased to see the attention to detail by the owners, management and staff in the homes towards all of their residents.

Thankfully, therefore the events at Bocking are extremely rare and it should not put off any person from choosing the most appropriate setting for health and social care to be provided for them at the latter stages of their lives.

A move into residential care is often a traumatic experience both for the new resident and for their family. It is of course appropriate to consider planning for this eventuality and my advice to all clients is to consider the possibility that – regardless of your wishes – a move into a residential or nursing care home may be inevitable owing to the level of care that is required at the latter stages of your life. As such, you should consider which home or care setting you would prefer whilst you retain the capacity to make an informed decision.

This consideration forms part of planning for your future and if you would like to discuss matters further in relation to any aspect of Wills and future planning, please contact Stuart Maher on 01254 884422 or stuart.maher@watsonramsbottom.com

To give or not to give? The care fee conundrum

A common feature of discussions in recent weeks, be it with clients themselves or through their children seeking the best advice for their, often, vulnerable parents, is as to what can be done to minimise the effect of a need for long term residential or nursing care in later life on the value of a person’s estate.

The most common questions – or probably more correctly complaints – are ‘How am I going to afford £600-plus per week to pay the cost of my care?’ and ‘Everything I have will be spent in fees!’.  So – just what, if anything, can be done about it?

I shall use a theoretical client, for our purposes we will call her Mrs Greaves, to illustrate a common case. She is a widow, who was left the matrimonial assets entirely on the death of her husband 10 years ago. She has a property worth £200,000, and savings in the region of £50,000. She has a modest state pension, and has her own personal pension and a couple of widow’s pensions which bring her income up to approximately £400 per week. She has recently been suffering from memory issues and she and her two daughters are concerned to protect her assets from unnecessary liability to care fees.

Clients’ suggestions are often ill-informed, but at times not uninventive. What they do however usually bring to the table (almost as standard) is a proposal to make a gift of an asset (usually the family home but occasionally other assets) to try and reduce the extent of their assets for any potential future assessment as to their means should residential care be necessary.

This is not a course of an action that should be considered lightly. After all, if the asset being given is the family home, the client is often considering giving up the place in which they live, and potentially without any protection of their right to live there for the remainder of their days.

Let us for a moment consider the reasons behind such a suggestion. A common misconception is that ‘Social Services will take all my money’. This is quite simply incorrect, as they will not be involved until a resident’s capital reaches £23,250. A person is free to utilise their capital and income as they see fit, to help meet the cost of care.

Another reason – which is suited to this illustrative case – is that ‘the fees are £600 per week, that’s over £30,000 a year. If my Mum lives in care for 8 years it will all be gone!’. However, this is simply not the case, and a few simple matters are often overlooked in the emotion of the conundrum faced by the family.

Firstly, what clients and their loved ones often forget is that, despite the very high cost of care fees, their income continues to be paid to them. This could be in the form of state pension, private or personal pension, widow’s pension and other annuity income. In addition, a resident would continue to receive the income from their savings and investments, and with appropriate financial advice, could maximise the income they yield to help meet the cost of care. In Mrs Greaves example here, she would need her savings and investments, together with other state benefits she may be entitled to, to generate £200 per week to meet the shortfall in the cost of her care. This equates to approximately £10,000 per year.

Secondly, a person funding the cost of their care is likely to be entitled to additional state benefits. Attendance Allowance is usually payable at the highest rate, on a non-means tested basis, for all residents in care homes. This could top up the existing monthly income by over £300.

Thirdly, in many cases, the family home is the most significant asset that a person owns. If there is no reason to retain the property when the person moves into residential care, it can either be let to produce a rental income, or it can be sold and the proceeds can be invested along with the other savings and investments to help top up the person’s monthly income.

Therefore, what many of my client’s find is that, when considering their position in relation to potential care fee liability, retaining the house and being able to use the capital to produce an additional income to top up the shortfall in meeting the cost of care is likely to leave them in a better position overall than if they had made a gift of the home and not had that asset available to generate an additional income.

Mrs Greaves has a decision to make at this point; she can retain the family home, and in the event that she was to require residential care hope that she can invest the £250,000 in an appropriate manner way which (together with additional state benefits she may be entitled to) will meet the shortfall in funding her care of £200 per week. Even if she was not entitled to additional benefits, if her savings and investments were invested appropriately and generated a 4% return after tax, the effect of her stay in residential care would be neutral to the overall value of her estate, and on her death she would be able to leave the full amount to her daughters as is her intentions.

If however she was to make a gift of her home now, she would only have £50,000 to invest on entering a care home, which would need a 20% return which is practically impossible. This act when coupled with the potential for the house to be sold and for her daughters to then be asked to contribute towards the cost of her care, may result in there being nothing left on the death of the person in care, not even sufficient to pay for the funeral.

To summarise, it is imperative that no gift should be made without a thorough consideration of the effect and nature of such a gift, but more importantly it should not be entered into without a full consideration of the client’s financial position, particularly in relation to their capital and income.

Advice such as this is contained in our free Wills and Estate Planning report service which we offer to all our clients. For more information please contact stuart.maher@watsonramsbottom.com or call 01254 884422.

Why the proposed care fee changes should cause you to review your Will

The proposed changes to the means testing of eligibility for assistance in funding the cost of social and residential care announced earlier this year are a welcome development for many of our clients.

At present, if an individual has over £23,250 of capital assets at the time they require residential care, they are expected to meet the full costs of their stay in a residential or nursing home, subject to some limited exceptions. With residential care fees being anything in the region of £500 to £1,000 per week, it does not take long for family assets to be dwindled away to meet the costs of care. For many years these rules have caused consternation among our clients and the general public at large who have worked hard all their lives only to face the prospect of losing the family home to pay for the costs of care.

It was therefore surprising when, in February this year, and amended slightly in the Budget of 2013, that the changes were announced with such little fanfare and indeed with plenty of confusion.  However, the Government confirmed their proposals to increase the threshold at which assistance begins for the funding of the cost of residential and social care is to be raised from £23,250 to £118,500. 

The proposed changes to come into effect from April 2016, as part of an overhaul of the funding of social care generally, will have a major impact on the ability of our clients to protect their wealth for their children and families, rather than facing the prospect of having to use their assets to pay for the costs of residential care.

The planning to reduce liability to care fees and ensuring that the hard-earned wealth of our clients is not spent unnecessarily on care costs is one of the key issues facing many of our clients when they discuss their Wills and Estate Planning provision.

The average family can, through properly drafted Wills and associated Estate Planning documents, restrict their liability to social and residential care fees, and will in many cases be able to secure the family home from needing to be sold to help fund the costs of care.    However, for the many families who do not take advantage of the changes by seeking appropriate professional advice in respect of their Estate Planning provision, the sale of their home will remain a likely outcome. 

The changes in the rules provide a wonderful opportunity to preserve your assets for the benefit of your family on your death but in many cases this will only be achievable by properly constructed Wills which take advantage of the means testing rules.  

At Watson Ramsbottom we offer all our clients and free, no-obligation Wills and Estate Planning report which sets out the options available to you to prepare for your future needs and the end of your life.   

If you wish to take advantage of this service, or to discuss matters generally please contact the head of our personal advice team, Stuart Maher at our Great Harwood Office on 01254 884422.