Securing your family’s future: LPAs, Wills and Trusts

Your thoughts on what constitutes a ‘family’ might be quite personal – for some people their partner is all the family they need, for others it’s their siblings, while for most people a true family probably begins with the birth of your first child.

Whatever you consider to be your ‘family’, there are steps you can take to make sure they are kept safe, no matter what might happen to you in the future.

Lasting Powers of Attorney (LPAs)

LPAs are probably one of the least well-known tools to protect your family’s interests, but in essence they are a kind of ‘living will’ to make sure your wishes are still respected if you are alive but incapacitated in some way.

There is a document known formally as a ‘living will’, which is generally used to express your desires for future medical treatment if, for example, you suffer from a cognitive degenerative condition that will render you unable to make such decisions in the years to come.

An LPA is similar, but does not necessarily have to relate to medical treatment; it might involve general welfare arrangements, or give somebody the power to control your finances and property on your behalf.

Trusts

Turning to trusts, these are another way to transfer ownership of property or money, and put it into a structure that ensures certain beneficiaries receive an income from it in the years to come.

Assets transferred into a trust will typically not be part of your estate anymore, which means when you die they may not incur any inheritance tax; for this reason, trusts are often used as a way to make your estate more tax-efficient, especially if you are nearing the end of your life and want to maximise your dependants’ inheritance.

You will need to appoint a trustee, who cannot be among the beneficiaries of the trust, and the structures can be quite complex – so consult a solicitor for sure if you think you might need a trust.

Wills

Finally (in every respect), your will is your last chance to express your wishes for the division of your assets after your death – literally your ‘last testament’ on this Earth, so make it count.

If you have a reasonable size of estate, or if you own any property or high-value goods of any kind, it’s probably a good idea to have a will to avoid falling into intestacy laws, which will carve up your estate according to fixed rules.

But wills can’t say just anything – there are still certain inescapable laws that apply – so again, it is wise to consult a solicitor to make sure your testament is binding, rather than risk a write-your-own-will pack and the possibility of being treated as intestate anyway.

Ultimately, there are several ways to make sure your finances are treated how you want them to be, whether you are incapacitated by illness or injury during your life, or once you die.

No matter who you think of as your family, any one of the above might help to safeguard them in the years to come; and you could find a combination of two or three of the above works best to totally wrap up your estate in a protective legal shield.

By Marsh Brown & Co

Land Registry improves its systems.

The Land Registry has announced this week that they have introduced two new ways for conveyancing firms to submit land registration applications, as well as maintain regular correspondence.

Once the legal completion is concluded, solicitors have the task of registering the new owners at the Land Registry as well as any charges. Historically this process has been a time consuming one as applications were sent to the Land Registry via the postal system.

Everything that goes to the Land Registry needs to be scanned in to their system and this is what led to inconsistency in postal application delivery, as all post needed to be redirected to the scanning centre.

To speed up the process the Land Registry have asked for all applications to be sent through to the new PO Box and DX addresses. All deliveries will now arrive directly at the scanning centre, cutting application times significantly.

The Land Registry states that the creation of the new systems will ensure applications will arrive as efficiently as possible, for those that do not require to be electronically recorded.

The second way of submitting an application would be to submit them electronically. This way will save on business costs and improve conveyancing department process speed. It is also up to 50% cheaper to submit land registry applications online.

By Nisha Gorania

H. Pipes & Co Solicitors

What use is a shareholder agreement?

They say you should never mix business with pleasure, but if you are going into business with friends or family (or both) then a shareholder agreement could prove to be a lifesaver further down the line.

It’s simply not wise to rely on the strength of your personal relationships to make everything OK in business too – especially if you’ve never worked alongside a particular person before.

Should things go bad – really bad – then you might not only lose a friend or face the breakdown of a family relationship; this could be coupled with a now-untenable business position, and the loss of your livelihood too.

Without a shareholder agreement to protect you and your business partners, it’s a classic ‘eggs in one basket’ scenario, and nobody should place themselves in that position if it can be avoided.

A typical shareholder agreement will set out certain information, such as:

  • How the company will be run.
  • How important decisions will be made.
  • Shareholders’ rights and obligations.
  • How shares in the company can be sold.
  • Protection for the company and minority shareholders.

If you will be a minority shareholder, the agreement can protect you in certain ways – for example, ensuring your opinion is heard on major decisions, even if you are outvoted.

You may also be able to enforce a rule allowing you to be offered the same for your shares as any offer made to a majority shareholder, so you will not be left out in the cold on such transactions either.

For majority shareholders, the agreement can also allow the converse; if you agree to an offer to buy your shares, you may be able to force minority shareholders to sell at the same price.

You can also protect company intellectual property and trade secrets, so a minority shareholder cannot simply take your knowledge and set up in competition.

Even as you’re reading this, you might be thinking ‘that would never happen to us’ – and you might be right.

But if your relationship with your family or friends is as good as you think, they won’t be offended by taking the professional approach to setting up in business.

On the other hand, if you’re viewing your new business partners through rose-tinted spectacles, it’s impossible to stress enough how important it is to protect yourself against an acrimonious board-level split months or years down the line.

By Pricketts Solicitors

The process of buying your first home

Buying your first home should be an exciting time, and although it can be, it is also likely to be one of the most stressful times of your life.

It’s always stressful trying to buy a property, whether it’s your dream home or just a first step on to the housing ladder, but when you’re unfamiliar with the process it’s even worse.

Consider using a mortgage broker to take some of the stress out of it – you can find brokers who charge their referral fee to the lender rather than to you, so there may not even be a financial downside to going through a third party.

Also, make sure you trust your estate agent; it’s their job to sell you a house, so you can expect them to be slightly skewed towards the positives of a property, but that doesn’t mean there are no decent estate agents out there.

When you are choosing your lender, mortgage broker or estate agent, look online for any customer reviews or discussion forum threads about them, and make sure they are reliable and trustworthy – and get a solicitor you trust on your side from the outset too.

Do this at the beginning, as trying to change any one of these things later can be disastrous for your whole property purchase.

Once you have the basics covered, it’s likely you will be a passenger for much of the rest of the ride: your lender will contact you about valuation surveys and so on; your solicitor will handle the land registry searches and environmental hazard assessments; and the estate agent will release the keys to you on completion.

All you can really do to make things run more smoothly is to make sure your finances are in good order, all of your ID is up to date, you have evidence of your income and current address, and so on.

Remember, if you are buying from somebody else who is moving house, you might be at the end of a lengthy property chain, which will determine the completion date and when you can collect the keys for your new home.

Be patient, try to have a contingency plan in case of delays (if you can cover the cost of remaining in your rental property until after you have the keys, that might be the best option) and try to stay clear of the stress.

There will be bumps in the road, but with a good solicitor and broker on your side, you should be ready for anything the lender or estate agent throws at you.

By H. Pipes & Co

Top tips for starting a business

There are many, many different ways to get into business, from buying out your current employer, to starting a new company from scratch; you can freelance as an individual, of course, or consider becoming a contractor who finds work via an agency, but is still self-employed.

Whatever you decide to try, there are certain top tips that will always apply and these are some of them:

Money Makers

Most importantly of all, make sure you are entering a profitable industry, sector or niche. As a new start-up, particularly a sole trader, you might have minimal overheads, so capitalise on this to drive as much profit as you can out of your takings.

Remember you are unlikely to hit the ground at a sprint, so to speak; your first month will be tough, and even your first year might be a learning curve, brand development and so on.

Work out how long you can live on the savings you have, and try to have a backup plan in case the customers simply do not show up at your door.

Company or Individual?

If you’re starting from scratch, you face the dilemma of whether you should register a company name, or work as a self-employed individual.

A limited company can protect you against some of the financial implications of business failure, or of any legal action you might encounter as a consequence of your work.

But if you expect to start small and want to keep things simple, work as an individual – but remember to consider registering as a company if your workload and income grow substantially.

Finance and Banking

Following on from whether you work as an individual or as a business, there is also the question of whether you accept customer payments into your personal bank account, or set up business banking.

The latter will usually not be free, so again you might be reluctant to open a business bank account, but it can be helpful to keep your professional finances separate from your personal finances, especially if you are applying for a business loan, personal loan or mortgage in the near future.

Growing the Business

If things go really well, you might need to register for VAT – and you’ll have to file your accounts annually either way, so make sure you have a good accountant as early as possible.

Try not to push it on tax deadlines, so you definitely don’t incur any penalties for late filing or overdue payments, and keep a good eye on your bottom line to see how well you’re doing.

Some things can wait until they become relevant, so don’t let the stress get to you; your new business has the best chance to thrive when your head is clear and focused on making it a success.

By Pricketts Solicitors

Do I need a cohabitation agreement?

A cohabitation agreement is typically used if you are living with a partner, but are not married – of course under modern laws, this should usually apply equally whether you are a same-sex couple or heterosexual, or any other sexual orientation.

The agreement will set out certain commitments that allow you to be treated as a couple, while in other respects you will continue to be treated as individuals.

Ultimately the idea is that you should be able to make certain decisions about your property together, while any pre-existing financial interests or ownership are protected.

With a cohabitation agreement in place, you can specify who will pay what towards the upkeep of the property, and who holds certain responsibility for its maintenance.

If you separate or move out of the property later, or if one partner moves out following a break-up, or indeed for any significant change in your financial circumstances, you can turn to your cohabitation agreement to determine who gets what.

However, there is something you should be aware of – and that is the potential for a judge to simply ignore your cohabitation agreement, if certain circumstances render it unsuitable.

For instance, your agreement might be ignored if a dependant is at risk, or any vulnerable person would be significantly disadvantaged by dividing the assets as prescribed.

It can still be beneficial to have a cohabitation agreement in place, but you might also want to obtain a trust deed to reinforce any rights over the property, and of course a will to bequeath your estate appropriately in the event of your death.

By Marsh Brown & Co

Flood Alert

The Environment Agency is reminding people to sign up for flood alerts ahead of the expected heavy rain in the next few days.

The current weather conditions bring a risk of localised river and surface water flooding to west and south west England as well as the western parts of the Midlands.

As always the Environment Agency is urging people to take care and avoid putting themselves or others at risk.

John Curtin of the Agency said, “People can sign up to receive our free flood warnings, check their flood risk and keep up to date with the latest situation on the GOV.UK website or by following @EnvAgency and #floodaware on Twitter for the latest flood updates.”

By Nisha Gorania

H. Pipes & Co Solicitors

Property Flood Risk

Flooding is a growing risk for British property.  Aside from physical damage caused by floods, if a property is at risk of flooding it may be difficult to:-

  • Sell it, or
  • Obtain suitable insurance cover

This is likely to affect the price of the property.

Whilst some properties near to a river or a sea may obviously be at risk of flooding, other properties may be exposed to surface water, overflowing sewers or ground water flooding.

Whilst we as solicitors are not qualified to give advice on flood risk or interpret technical flood reports, we can make further investigations:-

  • Conduct a Flood search; and
  • Make enquiries of the sellers (who will normally be expected to answer questions about flooding in their Property Information Form)

Any property purchaser or tenant will be advised to arrange a private survey, and the surveyor ought to consider the question of potential flooding.  We can also, if you agree, let the surveyor have a copy of our Flood Search so that he can apply his own technical interpretation of it.

In any case, you should take immediate advice from your insurance adviser as to the terms on which buildings insurance, including flood risk, is available. You must arrange building insurance well in advance of signing Contracts; if there are any risks of flooding revealed in our searches and enquiries or as a result of your own survey, then those risks must be discussed with your insurance adviser.

Also, if you are taking out a mortgage, your lender will impose its own requirements on you as to buildings insurance.  If you have any difficulties arranging insurance because of flood risk, then the lender may decline to proceed with your mortgage loan.

By Nick Seymour

Pricketts Solicitors

 

Can I vary my lease to amend the boundary of my property?

If the landlord and the tenant had wished to vary the rights or covenants of the lease, this could have been done by a simple deed of variation.  However by changing the plans to identify the change of boundaries in the property, this would affect the land to such an extent that the lease would have to be surrendered and a new one granted.

Of course, the landlord and the tenant can instruct for the existing lease provisions to be included in the re-grant, with the only difference in the old lease and the new lease being the plan to show the exact boundary of the property.

If the lease is to be registered at the land registry, the existing lease will need to be cancelled and the new lease registered in its place. This would lead to the creation of a new title for the leasehold property.

If the lease is granted after 19 June 2006, the new lease will need to be a prescribed clause lease. This could mean that the original lease and the new lease are produced in completely different styles, so care will have to be taken that all rights granted and covenants are as the parties intended.

The plans would need to be to scale, clearly identify the property, and the plans would need to be agreed, and therefore signed by the landlord and the tenant.

If the landlord has a mortgage secured against the freehold title, then the consent of the landlord’s mortgagee will need to be sought to the new lease.

Also, if the tenant has a mortgage secured against their title, their consent will also need to be sought to the new lease and the re-registration of the legal charge against the new lease.

When you usually have to surrender and re-grant a new lease you would normally have to pay stamp duty land tax. However if you are just amending the plan and no further premiums are payable for the extra land or for a rent increase does not result, no further tax is payable.

By Kulzinder Garcha

Pricketts Solicitors

Should I lease or purchase my commercial property?

Commercial property is a major part of setting up a business, or of running an existing company, and one of the fundamental questions is whether you should lease premises or attempt to buy your own.

Of course ownership is the more aspirational option – it brings a substantial asset into your company and gives you greater control over your premises – but it can be risky too.

Here are some of the differences and similarities between buying and leasing, to help you decide which is the best option for you.

Maintenance

A major ongoing cost – particularly if any one-off disasters like a fire, flood or even a leaky water pipe occur – is maintenance.

In leased premises, the landlord will usually be responsible for maintenance costs (as long as an incident is not your own fault) whereas if you own the property, it will be your job to cover the cost of any repairs.

Money

In the very short term, leasing makes more sense – you only have to cover your rent, rather than paying for the entire property outright, or placing a deposit on a commercial mortgage.

Soon after that though, the benefits of owning outright become apparent, and if you occupy the building for years or even decades, repaying a commercial mortgage will leave you with an asset, whereas leasing it will not.

Moving

If you want to relocate your company, owning your building might be very bad news indeed, particularly if you’re in the middle of an economic slump and can’t find a new occupant.

On the other hand, if you lease, you can move relatively easily; but you might also find you are forced to move when your lease is up, whether you want to or not.

More Money

Finally, in terms of its value as an asset, any building you own will increase in value if commercial property prices go up (although it will decrease in value if they drop, of course).

However, you can usually stay fairly confident that your mortgage repayments won’t change by a huge amount, rather than being subject to the whimsy of a profit-making landlord.

Finally, commercial mortgage interest payments may be tax-deductible, which is an extra financial benefit worth considering.

Overall

Ultimately, nobody can tell you to buy a commercial property, and nobody can tell you not to – if you’re in business for yourself, you are obviously a decision-maker, and this is one you will have to make.

However, a solicitor can help you with any property transactions and lease agreements – including sale-and-leaseback agreements if you are disposing of a property asset but want to remain as the tenant – to make sure whatever you decide, things go as smoothly as possible.

We will be running a free informative webinar on leasing or purchasing commercial property on March 19th at 1pm. For more information and to register to join the webinar please click here.

If you would like to speak to an advisor about your legal needs, please contact us today to arrange your FREE 30 minute consultation.

By Pricketts Solicitors