Showing posts with label will and probate. Show all posts
Showing posts with label will and probate. Show all posts

Friday 3 February 2012

Make Estate Planning A Priority


Thinking about who will take care of your children or how your assets will be distributed if you die is never pleasant. However, it is important to have a will to provide financial security for your loved ones. If you do not have a will, make it a priority to draw up a will this year. For basic estates, you can use an online website to create a will. However, you should visit an estate planning attorney for more complicated situations. (For more information, see Everything You Need To Know About Wills and Estate Planning.)

If you already have a will, set some time aside to review the will with your spouse to make sure it reflects your current wishes. Evaluate if the people named as guardians of your children are still the best choice. Verify that all beneficiaries of your estate are still the desired recipients and that all are currently living.
Give a copy of your new or updated will to several family members for safekeeping and also keep a copy at your home. Additionally, create a list of all bank accounts, monthly bills, retirement accounts and insurance policies to help your family continue paying your bills and distribute your assets quickly in the event of your death. Keep a copy of the list at your home so you can easily update it. Make sure to tell a family member where it is located.

Monday 14 February 2011

Appointing a nominee for your stock investments




Appointing a nominee for your investments




Many of us invest in shares, deposits and mutual funds without bothering to fill up the nomination details. Since choosing a nominee is not mandatory while making an investment, the decision is often postponed. However, this process simplifies for nominees the realisation of investment proceeds in case of the original investor’s demise. This is even more critical when an investment is held in one person’s name since death makes it difficult to access his funds till several formalities are completed. 

If nominees have been appointed, they can produce basic documents, such as a death certificate,to access the funds. The absence of a nominee may require more documentation,such as the probate of will and certified list of legal heirs, before the investment can be transmitted or withdrawn. Nominees are deemed to hold the investment proceeds in a trust if it is disputed by legal heirs, pending a decision by thecourts. 

Documentation: Most investment forms provide a space for selecting a nominee. If it is not filled up at the time of investing, other prescribed forms can be used later. 

Multiplenominees: Most investments allow more than one nominee and the percentage of share that each would be entitled to. 

Signature: The nomination form has to be filled up by all joint holders, irrespective of the mode of operation of the investment. 

Transmission: Nominees can have investments transferred in their names for redemption later.  For this, they need to complete the KYC and PAN formalities. 

Points to note 

Who cannot nominate : Kartas of HUFs and powerof attorney holders are not authorised to make or change nominations or be appointed as nominees to an investment. 

NRIs: Non-resident Indians can be named as nominees of investments made in rupees.However, the proceeds cannot be repatriated and have to be continued to be held in rupees. 

Who can be the nominees: Certain investments permit the nomination of a trust, religious or educational institutions. Others only permit individuals to be nominated. 


Thecontent on this page is courtesy Centre for Investment Education and Learning(CIEL)



http://economictimes.indiatimes.com/articleshow/7487182.cms

Tuesday 26 October 2010

Write your will – before it's too late



No one wants to think about what might happen to their dependants after they die, which is why so many of us put off making a will.




Last will and testament
A badly worded will could lead to relatives being saddled with massive legal fees
It is National Write a Will week this week, and 30 million people in Britain don't have a will – about 70 per cent of the population – according to unbiased.co.uk, the financial advisers' website.
Even if your affairs are simple, you do need to spell out what you want to happen to your assets. "If you die without, you leave your dependants at the mercy of the intestacy rules," warns William Marriott, of solicitor Meadows Fraser. "The rules don't always work the way you would expect them to."
As well as making life easier for your dependants, making a will can help reduce the tax payable.
So what should you put in a will and what will happen if you don't have one?

IF I DIE INTESTATE, WHAT WILL HAPPEN TO WHAT I OWN?

If you die intestate, which means without making a will, your assets will be distributed according to the law, and not according to your wishes. Jill Dando and Stieg Larsson, the author of The Girl with the Dragon Tattoo, are among those who have died without leaving a will and whose estates were inherited by their fathers, not their partners.
In England and Wales, if you are married with children, you might assume that all of your assets would go to your spouse. However, if your estate is worth more than £250,000, your partner will only get the first £250,000. They will get a life interest in half of the remaining estate, which means they can't get rid of it or spend it, but they are entitled to the interest.
The remainder will go to the children. If your assets are worth less than £250,000, your children will get nothing.
If you are not married or in a civil partnership, your partner won't inherit under the intestacy rules. Similarly, if you have separated but not divorced, your ex-partner will inherit the first £250,000 of your estate.
If you are childless and single, various family members could take varying shares of your estate. If no one claims it, the Government will take the lot.

THAT'S NOT GREAT. HOW DO I GO ABOUT GETTING A WILL?

You can make your own will, as long as you get it witnessed and have all of the formal requirements within it. If your circumstances are fairly simple, you could consider using a will-writing kit, which is available from stationers. However, a will that is badly worded could lead to relatives being saddled with massive legal fees.
It is possible to use online services where your will would be checked by a professional. For a full will, which will help your family to avoid tax and trauma after you die, it's best to talk to a solicitor. Using a firm regulated by the Law Society (www.lawsociety.org.uk) will mean that you deal with a qualified person, and also that you have some consumer protection.
Will-writers, on the other hand, are cheaper, but not regulated.

WHAT ISSUES SHOULD I CONSIDER WHEN I MAKE A WILL?

Do everything you can to make sure that your wishes are not contested. Make sure you do not ask any of the beneficiaries of your will to help draft it. Older people may ask grown-up children to help them write a will, but this means the will could be challenged by other potential beneficiaries. Make sure your will is properly signed and witnessed by two people who are not beneficiaries.
You will need to decide who your executors are. These are the people who will administer your will. You can pay for a bank or solicitor to do this, or a friend can offer to do it for free. If you have young children, you will need to appoint guardians to look after them if you were to die.

WHAT ABOUT TAX PLANNING?

Inheritance tax is 40 per cent, but it is known as the "voluntary tax" because it is relatively easy to get out of paying it with proper planning. Anyone who dies with total assets of more than £325,000 could leave their family with a tax liability. But if you leave your assets to your spouse or civil partner, no tax is payable. If you want to avoid tax and leave money to your children, seek legal advice about setting up a discretionary trust.

HOW MUCH SHOULD IT COST?

To save money, check if your employer, union or home insurer offers a free or discounted solicitor will-writing service. More Than insurance's £20 legal "add-on" to its home insurance policy offers a service where they will check a will for you. If you are on a low income, aged over 70, disabled, or you have a disabled child, www.communitylegaladvice.org.uk may be able to help you.
November is Will Aid month, when more than 1,000 solicitors will draft wills in exchange for a charitable donation. Expect to pay a voluntary £75 per single person and £110 per couple. Visit www.willaid.org.uk.

WHERE DO I KEEP MY WILL?

If a solicitor has made the will, they will usually store it, or you can pay an annual charge to have it stored at a bank. You can keep it yourself, but this is not the safest option.

HOW OFTEN SHOULD I REVIEW IT?

If you get married, divorced or have a child, make sure your will reflects this. Ensure that it is properly changed – either with an official change called a codicil if the change is minor, or by making a new will. Either way, make sure the changes are witnessed.



http://www.telegraph.co.uk/finance/personalfinance/consumertips/8087048/Write-your-will-before-its-too-late.html

Thursday 12 August 2010

Will writers taking thousands from customers, Panorama claims

Will writers taking thousands from customers, Panorama claims
Popular will-writing services are unfairly taking thousands of pounds from customers and their loved ones, a BBC investigation has claimed.


The firms claim they are cheaper and more straightforward than solicitors at creating a last will and testament, and are said to account for 10 per cent of the market.
But a Panorama documentary says in some cases their fees quickly escalate from hundreds to thousands of pounds in hidden fees and charges, while the supposed beneficiaries of wills can be left with nothing.
The problem is made worse by the fact that will-writers are not regulated as strictly as traditional law firms or financial services companies, which used to help people write wills.
Fergus Ewing, a Member of the Scottish Parliament who is bringing in protection north of the border, told the programme: “The public have a right to be protected, in Scotland they will be.
“Anyone who is charging a fee for writing a will must be regulated. They must have appropriate qualifications, they must have proper indemnity in place. At present none of this protection exists.
"I hope that justice will be done for people – throughout Britain, ideally – in protection against crooks, cowboys and con men."
The programme, broadcast on Monday night on BBC One, interviewed one woman who was left a large sum by a friend but who never received a penny because of fraud by the will-writing firm involved.
Mary Neenan, a single mother from Birmingham, said: "To have something like that £35,000-£40,000 would have been a life-changing amount of money for the three of us."
She went to police and last month David Nash and Nicholas Butcher, two men behind the firm, Lincoln-based Willmakers of Distinction, were each jailed for three-and-a-half years for stealing more than £400,000 from estates they were administering.
Neil Hollingsworth, of the Economic Crimes Unit of Lincolnshire Police, said: “A lot of the times, probably 90 per cent of those cases, the beneficiaries didn't know they were beneficiaries and so they weren't asking questions. I guess they probably thought they'd got the perfect crime."
However financial experts also warn that some banks are wrongly claiming that they must be added as joint or sole executors when writing customers’ wills, which can reduce the value of their legacies substantially.
James Daley, of Which? Money, told BBC Radio 4’s Today programme: “What that means is when you die they’re then able to take as much as 4 per cent of your estate in fees, which ends up adding up to tens of thousands of pounds.
“It’s quite a complex area. It’s the kind of thing most people have to do once in their lives. You’re really in the hands of the advisers, it’s really important that they give you the right advice.
“If somebody tells you that you need to have that firm written in to your will you take their word for it and you might not realise you’re then going to pay for that. This is a widespread issue, it’s a real problem out there.”
Pauline Platt, a Probate Lawyer at SAS Daniels LLP, said: "I've seen an increase in the companies who offer will writing 'services' and the shocking financial pitfalls that have faced some unwary consumers. It can be immensely costly to undo, and can leave a family in disarray after the loved one has died – which is usually only when issues come to light.
“If clients use a solicitor in the first instance, not only can they offer the correct legal advice taking into account the client's domestic and financial situation, but they can also advise on other services such as the creation of trusts, transfer of assets and powers of attorney.”

Monday 15 March 2010

What is the first thing you think of when considering how to pass on your wealth?






Inheritance

When a young successful professional from telecom background lost his life in an accident leaving behind his wife (home-maker ) and three children between four and 10 years of age, apart from the severe emotional shock, the family went through immense trauma since the deceased had not put in place any succession plan.

While, the man had left behind substantial wealth, enough to secure their financial future, the family still needed to grapple with multiple challenges—how to consolidate scattered assets? Who will manage the assets for the children until they reach the age of majority? How to ensure that inheritance is not squandered away but is protected for the family’s long-term benefit?

So, what is the first thing you think of when considering how to pass on your wealth? For most Indians, it’s probably a Will. Of course, that is the most traditional method but is it the right choice for you? What are the alternatives? And what are the advantages and disadvantages? Let’s consider the various options. The succession planning tools most often favoured in India are the Will, Personal Holding Company (PHC) and Trust. Apart from these, options such as life insurance and setting up a foundation are also used internationally.




Will and Probate

Where does a Will rank among all these choices? You should look at it as being the minimum measure you need to take. A Will is a legal document that describes how your assets should be distributed in the event of your death. 

However, the actual distribution is controlled by a lengthy legal process called Probate. Derived from the Latin meaning to “prove the Will,” Probate can be cumbersome, time-consuming , in certain cases expensive and emotionally traumatic during a family’s time of grief and vulnerability.

A further drawback is that your assets not only have to be made available for public inspection but they are also frozen and cannot be utilised, pending Probate.




Revocable Living Trust

Given the disadvantages of a Will and considering how important a well thought-out succession plan is, you should also evaluate other options. For instance, an increasingly popular alternative among those with substantial wealth is a “Living Trust” . Living Trust is often called a Revocable Living Trust. 

As the name suggests, it can be revoked or amended by the person creating it (settlor) at any time while the settlor is still alive and remains competent. Importantly, when you set up a Living Trust, it manages and administers your wealth both during your lifetime as well as beyond. In other words, there’s no need whatsoever for Probate from the courts since your assets continue to be held within the Trust. Eliminating the Probate formality implies that your family privacy is maintained and administration procedures are minimised so no extensive time lag and no additional costs.

Going back to the above case, had the gentleman formed a Trust, his family would have at least been absolved of the nightmare of collating the scattered assets and the accompanying administration. While there are many benefits to be derived from a Living Trust, there are also a few drawbacks. Though most of these are minor and should not discourage you, it helps to be completely informed of the disadvantages so that you can structure it appropriately.



Living Trust



Since a Living Trust does not come under direct court supervision, a trustee who fails to act in the best interests of your beneficiaries may, in some cases, be able to take personal advantage. In addition, the cost of preparing a Living Trust could, in some cases, be higher than the cost of preparing a Will.

However, this depends on the particular estate plan and the difference in cost may not be significant if the estate plan is complex. Refinancing, especially of property held in a Living Trust, can be slightly difficult, though it is not impossible and is more of a minor complication that can slow things down.

Perhaps the most important decision for you to consider in a Living Trust is your choice of trustee to act in your place. The trustee may be your spouse, adult child, other relatives, family friends, business associates or a professional fiduciary, such as a bank or trust company. Whoever you decide, it should be someone who will follow through on your wishes in an impartial manner and without compromise so that your wealth legacy endures for generations to come.


http://economictimes.indiatimes.com/quickiearticleshow/5681798.cms