Advisers Highlight Room For Abuse In Power Of Attorney Process

Financial advisers discuss protecting clients who are the subject of a power of attorney registrations.

An ageing population is leading to a rise in the number of people taking over the financial responsibilities of others. Financial planner at Chapters Financial, Keith Churchouse warns that the children of those needing power of attorney orders are “not always the best option”. Often they “are not experienced in larger sums of money” meaning problems can arise.

Director of Dalbeath Financial Planning, Matthew Harris says that on rare occasions “the person who has been granted a guardianship can ask us to release money from an investment for a reason that we are not entirely comfortable with.” However he reports that “ a situation where a guardian or attorney has asked for a very large policy to be cashed in” has never happened to his company and that if it did, “we would certainly refuse to action it.”

Phil Young, managing director of compliance firm ThreeSixty Services explains that on such an occasion, the adviser must not “ just walk away from” the situation but “report it to the Court of Protection.”

Regulatory Action

In a report published last year the Financial Conduct Authority described firms approach to the matter as “patchy”. Their handbook specifies that “due regard” must be taken in ensuring customers interests are looked after.

Director of wealth management at Sedulo Wealth Management, Paul Lindfield details an instance when he did need to contact the relevant authorities when it was requested that investments meant for long-term care fees were converted into cash. He says “some advisers would have caved into this pressure, but we will always do what is right for our clients and maintain our ethics” ultimately it is still up to the individual advisers and is open to abuse.

It is important that you take advice, we have the knowledge and experience to be able to advise you of the best way to achieve this.
Ken Beer MSWW

Hoskin Estate Planning

Joint Bank Accounts Frozen if Mental Capacity Lost

It is common knowledge that a bank or building society (and many other financial institutions for that matter) will freeze an account if the holder becomes mentally incapable. What people may not realise is that it is now common practice for high street banks to freeze withdrawals from joint accounts if one of the account holders becomes mentally incapable.

This is in line with the guidance issued this year by the British Bankers Association. If the mentally incapable account holder has made a Property and Financial Affairs Lasting Power of Attorney (LPA) which has been registered with the Office of the Public Guardian, the joint account holder and their attorney (who may be one and the same person) can continue to operate the account. Alternatively, if the incapable account holder did not create a Property and Financial Affairs LPA the account will be frozen until an Order has been made by the Court of Protection appointing a Deputy to make decisions on behalf of the incapable person in respect of their property and affairs. Obtaining an Order from the Court of Protection is a costly and cumbersome procedure which can take up to 6 months before the Order is issued. So, if joint account holders want to avoid costly delays, they should take steps to make and register a Property and Financial Affairs LPA. By putting these in place you can choose who you want to manage your affairs when you are unable to do so for yourself and you can also put other important safeguards in place.

It is important that you take advice, we have the knowledge and experience to be able to advise you of the best way to achieve this.
Ken Beer MSWW

Hoskin Estate Planning


Published 21 October 2016

New Probate Fee Could Cost Inheritors £20,000

Beneficiaries could be forced to take out loans in order to cover probate fee charges after proposed changes.

After someone dies, the responsibility of dealing with their finances often falls on a person who is under-prepared.

Executors need to obtain the grant of probate to distribute assets and arrange the paying of bills and taxes. Unfortunately, as Sarah Phillips, partner at Irwin Mitchell Private Wealth states, “a lot of people think that addressing their financial affairs as described, is predicting their demise, so will put it off.”

At the moment, probate is generally required if the deceased person did not write a will and has savings, property or shares worth over £5,000.

How Much Will It Cost You?

Under the proposed plans, estates valued at between £1.6m and £2m will have to pay £12,000, those worth over £2m will be made to pay £20,000.

Only estates valued under £50,000 will be totally exempt from the charges planned by the Ministry of Justice.

Asset-Rich, Cash-Poor Worst Hit By New ‘Tax’

Law firm Irwin Mitchell label the proposals as being effectively a new tax, adding that “individual beneficiaries, who are asset-rich but cash-poor, would be badly affected by the need to raise such considerable sums to obtain probate”.

The changes could also lead to unfortunate consequences, with “the risk is of many older people living in houses now owned by their children who don’t always act in the best interests of their parents.” As Sarah Phillips points out, people will feel pressured to divide their assets before their death.

Ways To Avoid It

There will still be ways to legally avoid paying the full charge, such as using trusts to keep money in and establishing those living together as tenants in common, where people own separate and distinct shares of the same property.


Why make a will? A reminder of the rules on intestacy

Why should you make a will? One of the major reasons is to avoid what is known as ‘intestacy’. Which is simply the legal term used for dying without a will or with an invalid will.

But please note that this article only applies to people living in England and Wales. This is because it is a recap of the changes brought about by the recent Inheritance and Trustees Powers Act 2014. (People living in Scotland, Northern Ireland or elsewhere have different rules applying to them.)

The major change is that a spouse will now receive a larger statutory legacy on intestacy and will receive the entire estate if there are no children – previously, they sometimes had to share it.

For deaths occurring in England and Wales on or after 1 October 2014 the situation is now as follows:

A. A person dies and there is a spouse or civil partner and no children
• The spouse/civil partner takes the entire estate absolutely.

B. There is a spouse or civil partner and children, on death
• The spouse/civil partner receives all the personal chattels (possessions) absolutely and a statutory legacy of £250,000 plus interest at 6%, plus half the balance of the remaining estate.
• The children receive the other half of the balance of the remaining estate (in a statutory trust if they are under age 18)

C. There is no spouse or civil partner, but there are children on death
• The children receive the entire estate absolutely, subject to statutory trusts (they are under age 18).

Please note that when I say ‘children’, it has a wider meaning in practice and includes all lineal descendants; that is, children, grandchildren and so on. If a child dies before their parent(s), but has left children of their own, those grandchildren will between them take the share of their deceased parent.

D. If there is no spouse/civil partner or children
These relatives receive the whole estate in the following order and if there is nobody, then the next class benefits:

(i) Parents
(ii) brothers and sisters
(iii) half-brothers and half-sisters
(iv) grandparents
(v) uncles and aunts
(vi) uncles and aunts, who are parents of half-brothers and half-sisters

In the absence of all the above the Crown, Duchy of Lancaster or the Duchy of Cornwall takes the whole estate.
Is this what you want to happen? You can easily over-ride these rules by making a simple will for a modest cost.

Something that everyone should consider in any event.

For more help and advice please do not hesitate to contact us at Hoskin Estate Planning.

Welcome to Hoskin Estate Planning

Hoskin Estate Planning is latest new division at Hoskin Financial Planning after the acquisition of part of an established financial services practice in Maldon it has given us a great opportunity and platform to broaden our in house services to cover all forms of Estate Planning. From our head office in Maldon we now can cover Essex and Suffolk with professional Estate Planning Advice and Services.

Press Release.

Hoskin Financial Planning is pleased to announce the expansion of the existing office staff in their Head Office based in Maldon, Essex.  Business growth and opportunities has led to a need for more financial professionals within the Independent Financial Advice firm.

Paul Hoskin said “We are building a team of industry professionals through hard work; with a modern approach and procedures, built on the traditional foundations of good customer service and trust”.

After the part acquisition of an established Maldon based financial services advice practice, Hoskin Financial Planning is setting up a new division – Hoskin Estate Planning.  “This has provided a great opportunity and platform to broaden our in house services to cover all forms of the UK Estate Planning market” heading up the new division is Ken Beer MSWW.

Joining the Hoskin Financial Planning team are: Clare Allen – Independent Mortgage Adviser, Stephen Enticknap – Independent Mortgage Adviser, Doug Richardson – Independent Financial Adviser Ken Beer Estate Planning Advisor and Emily Sharp – Administrator.