Ageing Population
- With an ageing population and many baby boomers reaching retirement, estate planning is more important than ever as these individuals look to pass their wealth down to the next generations.
- Also linked to an ageing population is the rise in the number of people who are experiencing This, in turn, is thought to be a key reason for more people making Powers of Attorney.
- At the end of last year, the Government backed a Bill that will allow Lasting Powers of Attorney to be made completely online. The impetus for this change is that the Office of the Public Guardian is “drowning in paperwork”, with wait times for registering documents taking an average of 20 weeks, and the reliance on paperwork is making the process unnecessarily complicated. The argument is that if the process is made completely online, it will be faster, will reduce errors and will alleviate the administrative burden, which will, in turn, reduce waiting times. Whilst these changes are likely to be positive and make LPAs more accessible, the Bill received critique from The Law Society for failure to address the need for LPA certification to expressly include consideration of the donor’s capacity. The Bill is currently at committee stage, so it is currently a case of ‘watch this space’.
Wills
- As a result of the pandemic, it became possible to witness Wills by video link and this will continue to be a valid method for completing Wills for the duration of 2023. Whilst this is invaluable for those who are vulnerable and still remaining cautious about interacting with others, the legal requirements for valid execution of a Will still remain and the potential for errors is rife – incorrect dating of the Will, confusion regarding signatures and timing of the witnesses to name a few. We recommend that the use of video technology should therefore be a last resort.
- Charitable Legacies have been steadily increasing in recent years, reportedly reaching £4bn in 2022. Due to the economic climate, whilst we may not continue to see a year on year increase in charitable legacies, analysts Legacy Foresight anticipate that it will remain static for the next couple of years and then continue to rise to reach a value of £4.4bn by 2027. Charitable legacies can be a useful tax planning tool, with legacies to UK charities being exempt from inheritance tax (IHT). Additionally, if you leave 10% of your estate to charity, your estate will benefit from a reduced rate of 36% (rather than 40%) for IHT.
Estate Administration
- From late 2020, the online system for probate applications became mandatory, save for a few exceptions. 2023 will continue to see the online process being tweaked and practitioner feedback being taken into account by HM Courts & Tribunals Service to streamline this process and, hopefully, reduce the ongoing delays in waiting times for Grants.
- There is an increasing number of executors making applications for probate without seeking professional advice. Whilst this is possible and may be appropriate for estates with very few assets or of relatively low value, mistakes can be expensive for executors as they can be held personally liable. From experience, we usually find that involving us from the outset is less costly and more time efficient than if we are brought in at a later date to unravel mistakes.
- Estate assets are becoming increasingly diverse. This is largely due to digital assets, including cryptocurrency, becoming ever more common.
Estate Disputes
- There is a continuing upward trend in the level of estate disputes. This could be due to a number of reasons, several of which stem from the pandemic and the circumstances that we all found ourselves in:
- diversity and complexity of family structures – leading to a wider range of family members hoping to enjoy a share of your estate;
- younger generations spending above their means, in expectation of receiving a later inheritance, which leads to debts, if they then aren’t left what they had hoped for – this may become increasingly common due to the cost of living crisis;
- DIY Wills made in dubious circumstances during the pandemic;
- individuals who died during the pandemic, without leaving or updating a Will;
- individuals who delayed making or updating their Will during the pandemic due to the practical difficulties and have since died without doing so;
- families who struggled with the intense time spent together during the pandemic and made rash decisions regarding their Wills, which they perhaps would not have done otherwise; and
- finally, taking us full circle, an ageing population and the effects of dementia – individuals put off making their Will until such time as they are diagnosed with a cognitive impairment. Whilst this doesn’t necessarily prevent them from making a Will, it can bring mental capacity into question and make a dispute more likely.
If any of the above resonates with you, whether it be Wills, Powers of Attorney, estate planning or a dispute, please get in touch and we will be happy to assist.