26 April 2012

 

Here is our third annual newsletter, we hope it finds you well.  Business is brisk and we thank all our clients including all of those who have recommended us to family and friends. 

Shernaz’s son Jack is now walking, is into everything and a real “help” with the housework!  Due to the current financial climate, we have had to ecomonise like so many others and do a lot more free activities like going for picnics in the park, luckily we had some nice weather in March to do this.  Ruth is expanding the vegetable garden as last year, even though only a small space was planted with vegetables, we enjoyed loads of “free” salads and dinners. 
 

Unfortunately, despite our economies, the cost of running the business has soared – professional fees, advertising costs and stationery being our major outgoings.  This of course means that our prices have to rise – although we still offer very competitive rates and aim to offer our clients the best service possible.  Please find our revised pricelist overleaf. 

Shernaz is constantly training and adding to the number of services we offer our clients.  Here is a reminder of what we offer and why you should look into these. 
 

Making or amending your Will

Having a Will is the only way to ensure your wishes are carried out after your death.  Too many people assume they know who will inherit their estate if they die intestate (without a Will) but this may not be right and the crown could end up getting it. 

If you have a Will it is equally important to make sure you check it every so often and, if needed, get it updated.  Your circumstances may have changed; you may now have grandchildren or may want to leave specific gifts to other people.  So if you already have a Will it is a good idea to check it. 
 

Lasting Power of Attorneys (LPAs)

Everyone over 35 should have LPAs in place.  An LPA allows you to choose attorneys who will make decisions for you if you cannot make them yourself because you lack the capacity to do so.  This could be because of an illness, stroke, or many other reasons. 

If you lack capacity, and do not have LPAs in place, your nearest and dearest will need to apply to the Court of Protection to be granted power of attorney to be able to deal with your affairs and this can be very costly. 

LPAs need to be registered before you lack capacity so don’t wait to set them up.  Our prices are very competitive and we explain the different forms to you, complete all the paperwork, register them, deal with any queries, act as your certificate provider (to say you are of sound mind) and witness your signatures. 
 

Pre-Paid Funeral Plans

I recommend anyone over 50 has a plan in place.  The average cost of a funeral has risen by 61% in the last seven years.  By having a plan in place you are paying at today’s prices no matter how much the cost rises in the future.  This ensures everything is taken care of and takes a lot of stress away from the ones you have left behind; also there is no question of what your wishes are. 

I have looked at a number of plans and have decided I have no reservations in recommending Golden Charter who represent a lot of the independent funeral directors.  They are competitively priced and offer different payment options.  I have enclosed their leaflet and would be happy to provide more information or prices upon request. 
 

Trusts

Why are more and more people placing their assets into a Trust? 

Once the preserve of the landed gentry, Trusts are now more popular than ever with those wanting to make sure that their wishes are respected and that they do the best for their loved ones.  Here are just some of the questions clients ask themselves before deciding to include a Trust in their Estate Planning:

 

 

Via a Will

In a Trust

Will my children lose part of their inheritance to an ex-wife or husband if they get divorced?

 

In most cases, yes (unless Good Wills has severed your tenancy)

No

Can I leave everything to my children but make sure my grandchildren aren’t bypassed due to divorce or re-marriage?

 

No

Yes

If my children get into financial difficulties, could their inheritance be seized by their creditors?

 

Yes

No

After I have passed on, how long will my children have to wait before they can benefit from their inheritance?

 

National average is 9 months

Immediate access

Is it possible to reduce or eliminate Inheritance Tax

 

No

Yes, in most cases.

 

 “All those involved with Good Wills share a common determination to provide a plain English, second to none service that is affordable to all based on principled and ethical values.” Nigel Walker-Jennings (Barrister), Spicer Finch Ltd
 

The Budget

There was not much in the budget that directly affects the products we offer, except some changes to the tax benefits for people who leave money to charities.  To work out if this would apply to your estate, you need to see if the charitable gift is worth 10% or more of what is called the ‘baseline’.  The ‘baseline’ is what your estate is worth after the inheritance tax allowance (IHT allowance) has been taken off (IHT allowance is currently £325,000 on death or £650,000 on second death on a combined estate where husband and wife left everything to each other then to children). 

If the gift is worth 10% or more than the baseline then the tax bill will be reduced to 36% on the remaining amount instead of the standard 40%. 
Putting it simply: The survivor of a married couple dies leaving an estate worth £800,000, they leave a charitable gift of £15,000 in their Will and the rest to their children.  After the £650,000 IHT allowance has been taken off, the baseline amount is £150,000.  The charitable gift is worth 10% of this amount and therefore once this gift has been paid, the inheritance tax bill their children will need to pay on the remaining £135,000 will be charged at 36% instead of 40% (a saving of £5,400). 
 

Here are some of the other main points of the budget in a nutshell –

The income tax personal allowance rose from £7,475 to £8,105. 

Tobacco duty has risen by 5% above inflation.  That is from 37p on a packet of 20 cigarettes and the price of a pint of beer is likely to increase by 5p, a bottle of wine went up by 9p. 

Fuel duty went up by a little over 3p.  Road tax went 'up with inflation' but those with more polluting vehicles will pay more. 

Child benefit - households where a parent earns over £50k a year will lose.

Extra personal allowance for OAPs will be scrapped on 6 April 2013. The changes mean those of 64 and under born after 5 April 1948 will have their tax-free income capped at £9,205, this will apply to under 65’s from next April.  For people born before 5 April 1948 their personal allowance is £10,500 or £10,660 for the over 75’s. 
 
We hope you find this useful and hope to hear from you should you have any questions or require our services. 
 

All the best,

 

Shernaz Motivala                                Ruth Turk