The latest from Pooleys
FAMILY LAW – ALTERNATIVE DISPUTE RESOLUTION
CANTONESE OR MANDARIN
Mrs Brenda Wong Robinson of Pooleys Solicitors LLP originates from Hong Kong; she is bi-lingual in Cantonese and English and has been practising Family Law in Englandsince 1988. She is a member of the Law Society Children and Family Law Panels; Since 2006 she has been a Family Law Mediator, and a Collaborative Family Lawyer; she is a Family Law specialist with Resolution.
The Family Procedure Rules 2010 came into effect in April 2011. In accordance with the rules, parties in divorce proceedings will be expected to have followed the protocol and to explore the scope for a mediated outcome. Failure to do so can lead to the proceedings being stayed; there may be cost penalties which can be very expensive.
Forms of alternative dispute resolution:
Family Mediation; this is a way of helping parties make the practical arrangements they need for the future. Should parties be willing to attend round table meetings, then the aim of the process is to help find a workable solution that meets everyone’s requirements. Family Mediation takes place in a private and informal setting with only the Mediator present with the parties directly involved. The Mediator is not there to tell the parties what to do nor to take sides, but to help explore different solutions. Mediation is not counselling; it is a way of settling disputes or making joint decisions. It can be an economic way to reduce conflict and misunderstandings and can improve communication between the parties.
The parties can use Mediation at any stage whether or not they have consulted solicitors or have started court proceedings. A Mediator generally meets with each party separately so that concerns can be discussed before any joint session..
The parties’ solicitors can give independent legal advice both during and at the end of Mediation to ensure that any agreement reached is right for the party. Should Mediation break down, discussion and decisions reached during the Family Mediation process cannot be disclosed in court later.
Collaborative Family Law; under this approach, parties meet round the table for discussion with their solicitors to reach a workable solution; this is an alternative to the more ponderous method of limiting contact between parties to correspondence between solicitors.
Parties need to have a genuine desire to make the process work; they must be open and honest in all dealings. To begin the process of collaboration specially trained Collaborative Family Lawyers sign an agreement that parties intend to reach a solution without going to court. Once an agreement is signed, it will disqualify the Collaborative Lawyers from representing the parties in court should the Collaborative process break down; following such a breakdown, parties will have to find new solicitors to represent them at court.
Extended family or children; in appropriate cases, Mediation and Collaborative Family Law can involve the extended family or the children during discussions.
July 2011
Mrs Brenda Wong Robinson
Pooleys Solicitors
Opening hours: 9.00 – 5.00 p.m. Monday-Friday (except public holidays)
10-15 Regent Circus Swindon SN1 1PP
Tel: 01793-488848 Fax: 01793-511209
Email: mail@pooleyssolicitors.co.uk
Website: www.pooleyssolicitors.co.uk
POOLEYS LLP
Readers will see that this occasional newsletter is issued under the heading “Pooleys Solicitors LLP”, which indicates that the firm now carries on business as a Limited Liability Partnership, rather than as an old fashioned partnership between individuals. The new facility to trade thus has been available following the passing of the Limited Partnerships Act 2000 since when professional firms, such as solicitors, have increasingly tended to change to the new medium for business; one of its advantages is likely to be an attraction to potential new and younger partners hereafter. There will be no reduction in the protection afforded to clients and to client monies; in practical terms clients are unlikely to notice any difference between us acting as solicitors in partnership, and as solicitors who are members of a Limited Liability Partnership.
The members of the LLP are Nicholas Buckley and Brenda Robinson; Martin de Bertodano (who edits this newsletter) has been a partner in Pooleys (or its predecessors) for over forty years. He remains with us as a Consultant; it is unlikely that clients will notice any difference in his input, at least in the medium term.
The Limited Liability Partnership hopes that you will find this newsletter to be of interest; we have tried to make its content wide ranging over our principal areas of practice, conveyancing, matrimonial and private client work.
PRIVATE CLIENT DEPARTMENT
We have experienced members of the firm who can assist with Wills, Trusts, Capital Tax Planning, and Powers of Attorney.
Elaine Stacey has many years of experience in these matters and particularly in Probate and in Lasting Powers of Attorney (see below). Martin de Bertodano has been a partner in this firm (and its predecessors) for many years; he is now acting as Consultant, especially in Capital Tax planning for individuals and also in the drafting of Wills, an important process which is too often ignored. The team is completed by Jan Iwaniszyn who has been a valued member of staff for over 30 years, dealing with Wills and Probate, and with long experience running our Accounts Department. Jan is also a qualified Energy Assessor.
A recent survey by the National Centre for Social Research suggests that nearly two thirds of people who die in the United Kingdom, have made no Will. In the absence of a Will the law prescribes a formula for division of assets; this is described in the next article “Intestacy”. All too often that prescribed division does not accord with the wishes of the person who has died, let alone with the needs and expectations of the heirs. A simple Will can cost as little as £140 plus VAT - £180 plus VAT for a pair of Wills for spouses or partners.
INTESTACY
Intestacy arises when a person dies leaving no will. It frequently causes difficulty particularly when a married person dies and leaves a surviving spouse. Intestacy law entitles that survivor only to take personal possessions (“chattels”) and a statutory legacy of EITHER:
§ £250,000 if there are issue - children or remoter descendants of the intestate person OR
§ £450,000 if there are no such children or descendants
The surplus assets (over and above the statutory legacy) are divided into two equal half shares. The first half share of the surplus is held in trust, to provide an income for the surviving spouse during lifetime; thereafter it passes outright to the nearest blood relations as indicated below, subject to any Inheritance Tax (IHT) payable on the death of the surviving spouse. There are complex provisions to enable the survivor to claim a capital sum instead of this income.
The surviving spouse will have no claim to the second half share of the surplus. This half share (which may be liable to IHT) will pass at once to the nearest blood relations – very often direct descendants. If there are no such descendants, then parents inherit equally (or the surviving parent wholly). The parents are followed by brothers and sisters and their descendants. Intestacy provisions enable more distant classes of blood relation to inherit in the absence of nearer classes. Everything goes to the Crown only in the rare case that there are no blood relations close enough to share descent from at least one grandparent of the deceased person.
Obviously provision has to be made for succession where there is no Will; though the statutory legacy has been increased many times over the last eighty years, the principle indicated above has been in place since 1926. Division on such old fashioned lines suits practically nobody.
To avoid it, please consider instructing Pooleys to prepare for you a Will to include provisions suited to the particular needs of the family.
Please note the following:
1. The survivor of an unmarried couple has no rights upon the intestate death of the other partner.
2. Marriage almost always cancels a pre-existing Will but:
§ Cohabitation without marriage will not cancel a pre-existing Will
§ In the absence of marriage the surviving partner will get nothing under the intestacy provisions; unmarried couples may have made separate Wills before co-habitation begins; pre-existing Wills may well be valid but they are unlikely to have made provision for the surviving unmarried partner.
3. Blood relations of the other spouse or partner (including step-children) inherit nothing under intestacy.
4. The survivor of a registered civil (same sex) partnership has the same intestacy rights as a surviving spouse.
The moral of all this… MAKE A WILL & KEEP IT UP TO DATE
DRAFTING OF WILLS AND POWERS OF ATTORNEY
Readers should be aware that the preparation of Wills and Powers of Attorney is not regulated in England and Wales; in other words anyone may prepare such a document for another person and charge for it. The work of qualified solicitors in these (and all other) respects is regulated by law. Readers should be on their guard against attempts by unqualified persons to obtain instructions for a Will.
In the absence of regulation it is impracticable for the customer to distinguish between good and bad unqualified Will drafters, some of whom are not covered by insurance, and some of whom disappear quickly from view.
As was made clear on a Panorama programme in August 2010, expensive mistakes can be made; a low initial fee can conceal high hidden charges. We have heard of one case in which a couple was charged £25 a year for storage of Wills, a service which Pooleys provides without charge; worse still we have heard of threats to destroy Wills unless the charge be paid or the Wills be collected personally.
The moral is be on your guard and instruct only firms of solicitors with suitable expertise – such as Pooleys. After death, it is often too late to rectify incompetent drafting which is all too often found in Wills prepared by persons who are unqualified and unregulated.
Some of the Wills which we have seen (prepared by persons not qualified as solicitors) have left much to be desired. In one recent case the witnesses were not present together; the seven page Will was invalid. In another distribution of the estate was insufficiently detailed, leading to expensive efforts to trace the descendants of persons born over 100 years ago.
We are aware of a case in which a substantial “up front” payment was sought for an illusory guarantee that the payer’s executors would need to pay nothing after the payer’s death for full administration of the estate. We obtained full compensation for the victim from an appropriate insurance fund. If you have received an approach about such a matter ignore it; if you have actually made payment please contact us.
ASSET PROTECTION BY WILL
(for married couples or registered civil partners)
Advice is often sought about ways of sparing a family the cost of a parent’s long term care for which full payment is normally required. In general, should long term residential care in England be needed by an individual - often elderly and frail – the full cost will have to be paid by the resident; however once the resident’s assets fall below about £23,000, the state (usually local authorities) will assist with care costs, help being effectively means tested.
This note is intended to suggest how such assistance can sometimes be maximised to protect (for the benefit of heirs) assets against means testing. It is assumed that a husband and wife share ownership of their own home, and that they wish to make wills by which they leave as much of its value as possible to their children, or other chosen heirs; however the suggested scheme can be used to protect part of any shared assets for the benefit of heirs (whoever they may be) by any married couple – or any couple in registered civil (same sex) partnership. To use the trust route suggested in this note owners who share “jointly” must ensure that they become “common” owners. This is easily effected, as is shewn by the separate note “Shared Ownership” which appears later in this newsletter.
Each of the couple should consider creating (by Will to take effect on the first death) an arrangement whereby that half of the shared assets passing on the first death is held in trust for the lifetime of the surviving parent, whereafter children can be the outright beneficiaries. The surviving parent and some (or all) of the children can be included as Trustees. The terms of the trust should give to the surviving parent legal rights to occupy (rent free) a residence, to have proceeds of sale invested in another home, or to have the income from the proceeds of sale paid to the surviving parent. Properly arranged such a trust can preserve the exemption from Capital Gains Tax which presently applies to a tax-payer’s own home. A trust of this sort can preserve for heirs (without risk of erosion by care costs) the full value of that half share of the family home belonging to the first of the couple to die. The Trust can be constructed so as to leave open the option of terminating it during the lifetime of the surviving partner or parent; though this option is desirable, it should be exercisable only by the Trustees in that capacity - not at the behest of the survivor alone. Exercise of the option to terminate the trusts would require careful thought, as it is likely to destroy the underlying protection for released assets which would otherwise be given to the heirs by the Trust arrangement. The survivor can be given discretion to allocate the Trust’s assets (which have passed on the first death) between a defined class of persons, perhaps children or grandchildren.
The effect of a trust arrangement of this sort will be to protect from means testing the full value of the Trust asset, often the half share of the parent’s family home which has passed on the first death. The arrangement can preserve the trust asset (for children or other eventual heirs), however long the period for which the surviving parent may need full time care; this objective must be desirable, on the basis that “half a loaf is better than no bread”.
It should be remembered of course that the survivor of the couple will usually be the outright owner of the other half of the trust assets; that other half will be normally subject to means testing, so that the survivor pays for costs of care from it. It follows that a trust scheme of this sort, though available, is unlikely to benefit the heirs of a surviving parent who is outright owner of assets so ample as to cover all expected care costs. However it may be possible for the survivor to invest in assets which are themselves not subject to means-testing. We can put clients in touch with suitably qualified Independent Financial Advisors (IFAs) who can make appropriate recommendations.
LASTING POWERS OF ATTORNEY
This note is intended to comment on the present facility to appoint another person to act for oneself, in such a way as to cover the possibility of losing mental capacity. Since 1st October 2007 a Lasting Power of Attorney (“LPA”), created under the Mental Capacity Act 2005, enables an individual (the “Donor”) to give appropriate powers to another person or persons.
(a) to deal (on behalf of the Donor) with property and financial affairs, thus avoiding obvious difficulties which can arise, for example arranging (or completing) the sale or purchase of a house should the Donor have become mentally incapable.
(b) to deal (on behalf of the Donor) with welfare matters such as medical treatment.
Age can lead to mental incapacity; it can also result from accident, hospital treatment or from any of the many other ills to which mankind is heir. Without an LPA mental incapacity can lead to real difficulties for the family of a mentally incapable person; these can often only be resolved by an application to Office of the Public Guardian (“OPG”) for the appointment of a deputy (formerly a receiver), an expensive slow progress.
It needs to be remembered that attorneys do have very considerable powers. It is important to choose trustworthy persons to act in that capacity. By LPA a Donor can appoint successor or alternate attorneys. As LPA powers cease immediately upon the death of the Donor, it may be sensible for a Donor to appoint as attorneys those persons who are to be Executors of the Donor’s Will.
The forms required for registration of an LPA (also with OPG) are lengthy, ten pages for each form.
The OPG often finds that the forms have been filled in incorrectly; to avoid difficulties and to discuss the forms contact Elaine Stacey on 01793-488848 or by email at Elaine.Stacey@pooleyssolicitors.co.uk
P.S. Please note that it is no longer possible to create an Enduring Power of Attorney. Should one have been completed before 1st October 2007, it will continue to be effective after that date. A properly completed Enduring Power of Attorney will still enable the Attorney to deal with financial matters (but not welfare matters) even after 1st October 2007.
DOMESTIC AND COMMERCIAL PROPERTY
The Conveyancing team is headed by Nicholas Buckley, one of the Solicitor members of Pooleys LLP; he has been practising law for over thirty years and is supported by Conveyancing Assistant Julie Down. The team has deep knowledge of housing matters and great experience in representing both landlords and tenants. It has good connections with other professional, Planners, Surveyors, Estate Agents and Architects, all of whom can be helpful, not least in commercial property transactions.
The difficulties and stress which can arise in buying or selling a property should not be under estimated. With our connections we are able to ease difficulties and resolve potential problems. One of these is the sharing of ownership.
SHARED OWNERSHIP
When ownership of a house (or of any land) is shared, it is important that this be arranged in a way which is suitable to individual requirements. English law recognises two types of shared ownership; “joint tenancy” and “tenancy in common”.
(a) Joint Tenancy; when two (or more) sharing owners hold property as Joint Tenants each of them is an absolute owner of the property. Though there are no divided shares, each joint tenant effectively shares equally with the other – or others. On the death of a jointly sharing owner the property passes automatically to the survivor – or equally to the survivors; the Will of the dead sharing owner (under joint tenancy) will not affect the position. For this reason a married couple usually shares ownership of the family home as joint tenants; this means that upon the death of one spouse, the survivor becomes sole owner of the whole of the house. This results from the existence of a joint tenancy, and is not affected by the Will of the first spouse to die. Joint tenancy means that the shares must be held equally by the owners.
(b) Tenancy in common; when two (or more) sharing owners hold property as Tenants in Common each sharing owner has a divided share, the shares not necessarily being equal. The owner of each share can effectively give part of that share by Will, or by gift – or sale. This method of holding property is widespread, as between owners who are in business together (perhaps as business partners) owning commercial premises as tenants in common. Tenancy in common may be apt in other circumstances, perhaps where two friends own a property, particularly when financial contributions are uneven, one party having contributed more than half the deposit - or mortgage repayments having been made unequally. It is possible to stipulate that property be held (under tenancy in common) in any proportions that may be desired, from 50%:50% to 99%:1%, or in any other combination of shares. Unmarried couples are often well advised to share ownership as tenants in common; there should be a written agreement to cover such matters as death of either party, or the ending of the relationship, in which case one partner may wish to buy out the other; agreement should cover the liability for outgoings, and the division of increases (or decreases) in value. Tenancy in common may also be appropriate for a married couple, perhaps when one is beyond retiring age or if, for some reason, the property is not intended to pass to the survivor, on the death of the first spouse. In some circumstances Inheritance Tax can thus be reduced or avoided. In other circumstances it may be possible to increase state benefits for the survivor, by a trust arrangement excluding the value of the house share (formerly owned by the first spouse to die) from means testing – perhaps for cost of long term care of the survivor. To protect thus any part of the value from means testing, it is essential that shared property be held under tenancy in common.
A joint tenancy can easily be altered to an equal-sharing tenancy in common; to effect this any joint owner need only give written notice to all of the other joint owners, the notice being effective when all of the joint owners are aware of it; written acknowledgement is not strictly required but it is obviously wise to obtain it. Though a joint tenancy can be altered in other ways, for example by a course of action inconsistent with continued joint tenancy, it is not safe to rely on anything except written notice. In particular it should be noted that the making of a Will (even if specifically dealing with owned property in shared ownership) is unlikely to convert a joint tenancy to tenancy in common.
HOME INFORMATION PACKS
As was widely publicised in the media, the in-coming coalition government – as one of its first actions – removed the requirement for Home Information Packs (HIPS) which had been required upon almost all sales or lettings of houses or flats since November 2007.
However an Energy Performance Certificate is still required; an assessment for this purpose must be carried out by a qualified Energy Assessor. Pooleys have their own Energy Assessor who can carry out assessments of property at a time to suit the client.
Do therefore instruct Pooleys to prepare your Energy Performance Certificate. For more information please contact Julie Down on Swindon 488848 or by email at julie.down@pooleyssolicitors.co.uk
OUR FAMILY LAW DEPARTMENT
This is headed by Brenda Robinson, a Solicitor member of Pooleys LLP. She has been trained as a collaborative family lawyer; having been brought up in Hong Kong she is a native speaker and writer of Cantonese. She can also converse in and read Mandarin.
She is ably supported by Executives, Danielle Fox and Gemma Avenell.
We work closely with Barristers from many chambers; the local Pump Court Chambers, St. John Chambers and also Argent Chambers near the High Court in London, are particularly well able to provide our clients with first class legal representation.
For London based clients Pooleys LLP is able to offer face to face legal advice in London. Swindon is only an hour by train from Paddington.Modern technology makes communication easy, not merely by telephone, fax and email, but also by Skype - for the more technologically competent.
COLLABORATIVE FAMILY LAW
Pooleys LLP is able to offer this method of resolving differences. Available since 2003 in England and Wales, the process encourages an approach which is less confrontational, more private and usually cheaper than the traditional court procedures.
Essentially the process is a series of four sided meetings – two clients each represented by a legal advisor. Beforehand each client will have spent time with his or her own legal advisor preparing and setting goals. The preliminary procedure encourages communication and full disclosure of facts, identifying possible difficulties. Should (unusually) no settlement thus be reached the clients can resort to the courts, but with different lawyers. In almost all cases a resolution of difficulties through collaborative law will reduce bitterness, give priority to the needs of any children, and retain client control of the divorce and separation process.
Should you, unhappily, be in a domestic conflict situation, then – to ensure that you are well represented and correctly guided through the collaborative process – please consult us. For more information please ask for supplementary leaflets.
