Estate Archives - Emyr Pierce

Jan 27

Why are there Prohibition Orders against the property I’m purchasing?

I am purchasing a property but my solicitors have advised me that the Local Authority Search has revealed there are Prohibition Orders registered against the property. What does this mean?

Occasionally, searches will reveal Enforcement Notices registered against properties. This will relate to Planning Conditions having been breached or the Local Authority declaring the property unfit for habitation.

A Prohibition Order is a little more serious googletest. This prevents the property from being used for a particular purpose until conditions set down by the Council are satisfied – for example the inability to use a property or part of a property, for residential purposes because certain alterations, usually unauthorised, are a risk to the health of any occupier googletest googletest googletest.

You need to consult with the Local Authority to establish what is required to satisfy these Orders as the cost of satisfying these requirements need to be included in your anticipated budget.

One other important point to note is that such entries revealed by the local authority search may have been satisfied but the entries remain on the Local Land Charges Register. If an entry is therefore revealed by the search your lawyer will need to enquire of the local authority as to whether the Notice remains valid or whether it has been satisfied.

* Emyr Pierce is Managing Director of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property googletest. Contact www.emyrpierce.co.uk or email law@emyrpierce.co.uk

Jan 27

What happens in a jointly owned home if one person sells their half of the property?

Three years ago my mother (who is now 79) put my name on the deeds to her bungalow so that we owned it in joint names. If mum needed to go into residential care would she have to sell it to fund her care and what happens to my half?

There is excellent guidance available on the Age Concern website with regard to whether or not such a gift into joint names three years prior to entering into residential care would amount to a dissipation of assets.

In other words would it be a transaction that could be questioned by the Local Authority whereby it could be argued that your mother deliberately transferred the property into your joint names in an attempt to avoid having to pay Care costs. If it was deemed that this was the case, then the gift three years previously would be capable of being overturned and the property could be sold with a view to funding your mother’s Care.

If you lived there with her prior to, and since, the date of transfer into your joint names then obviously there would be an argument for saying that your mother was doing so to protect your position as you had lived there for some time and presumably contributed towards its maintenance, repair and outgoings.

I would strongly advise anyone considering these matters to consult carefully the websites of Age Concern and other organisations where invaluable and useful information can be obtained on this complex subject or take formal advice from a lawyer specialising in this field.

* Emyr Pierce is Managing Director of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email law@emyrpierce.co.uk

Dec 6

Can I create a DIY Will?

We have just bought our first house and need to make a Will. A friend of mine has created a DIY Will using a special pack bought from a local stationery business. Is this something I can do fairly simply?

One thing you can always guarantee is that when somebody intends to make a Will they will claim it is straightforward and simple.

If this were the case then it would be perfectly in order for everyone to simply draw up their Will on the back of a cigarette packet. However, half an hour with a Lawyer specialising in Will drafting will identify many aspects that you may not have considered.

You may well have a good idea of what you want to leave – and to whom – but it is the provisions within the Will that take into account certain unforeseen circumstances or, in particular, people dying in the wrong order, which can often be critical.

Ensuring that provision is made for surviving children, even if you do not have any at the time of making your Will, along with the appointment of Guardians for young children, ensuring that your share of any joint matrimonial assets will actually end up with any children from your first marriage, (and similarly for your wife), and above all else your specific wishes recorded in a legally binding document are all critically important.

Do yourself a favour – and consult a specialist to draw up your Will. In the round it really isn’t that expensive and increasingly we are seeing more and more Estate disputes as the consequences of poor or home-made Will drafting becomes apparent.

Nov 8

What will happen to my parents’ Estate if they go into residential care?

My wife and I are considering selling our home and moving into my elderly parents’ house to look after them. My parents’ Will leaves their Estate to me and my sister but we would buy her share of the house on the death of my parents. How safe are we though if one or both of my parents has to go into residential care and the only asset they have is the house?

If you moved into your parents’ home it would be sensible for your parents to transfer the property into the joint names of themselves and yourselves as this would take advantage of an exemption available to your parents in that they have transferred one-half of their interest in the property to those who also occupy the same.

This could safeguard against the whole of the property being taken to pay for future care fees, as only the half which your parents retained would remain in their ownership and would technically represent the half to which your sister would otherwise have been entitled in the event of your parents’ death.

Should your parents move into care in the meantime then it may be that only the remaining half share in their name would be assessed as evidence could be supplied to show the reason why the property had been transferred into your joint names.

Should your parents die without having to go into care then you would have to buy out the remaining half of the property from your sister as, technically, the half remaining in your parents’ names would pass to your sister on their death as you had already received your share during your parents’ lifetime.

Nov 8

Should I sign a pre-nup before living in my husband’s house?

I am getting married in five months and we plan to live in a house which was bought for my future husband by his parents. They are suggesting we sign a pre-nuptial agreement to ensure their investment remains in their family in case we separate. Is this something I should agree to?

Prenuptial Agreements are a little mercenary and can cause suspicion from the outset which is not always good for one’s relationship! It may be better to simply view it from a basic property ownership point of view as if you were not getting married at all. In those circumstances there are two issues which arise.

If it was a genuine gift to their son then it may be important for Inheritance Tax purposes for this gift to continue in time – particularly if they gifted the property say 5 years ago – as once a period of 7 years has expired since the gift the value of the gift falls outside the Estate of the in-laws in the event of their death. This may, therefore, have substantial tax savings.

The only way that they can ensure that you agree from the outset that you have no intention of claiming any interest in this property is to enter into such a pre-nuptial agreement recording this intention. Your rights as a wife may still afford you certain rights of occupation etc that may benefit you – regardless of any such agreement and you need to seek specialist advice before doing anything at all.

Alternatively, your in-laws could take a charge over the property for the full value of the purchase price, which means they retain an interest in the whole amount that they advanced to enable the property to be bought. However, this will imply that the purchase monies were not a gift from your in-laws.

If they at some time in the future (after you have been married for some considerable time) wish to release that charge for no consideration then at that time it would amount to a gift and the 7 year rule would start to run from that date. Should you separate then the in-laws’ investment is preserved as they still have a charge on the property.

Oct 25

Who will inherit my Estate if I die without making a Will?

Will my dead husband’s children from a previous marriage inherit my Estate if I die without making a Will? I have no children and no living relatives.

Should you die without making a Will then your assets would pass in accordance with the Intestacy Rules.

If your husband was still alive then he would inherit the first £250,000 of your Estate if you have surviving children and £450,000 if you do not, which could, in turn, make its way to his children from a previous marriage in the event of his subsequent death.

On the basis that he has predeceased you then your assets will pass in accordance with the remainder of the Intestacy Rules.

Should you have no living relatives whatsoever then your Estate would pass to the Crown. If you are single or widowed, have no living relatives to include parents, children, brothers, sisters, half-brothers or half-sisters, nephews or nieces, then there is a great risk that your Estate will pass to the Crown.

It is, therefore, essential that you make a Will – even if it is to leave your assets to Charity, or your close or good friends.

Oct 25

When does property become subject of the lifetime gift exemption?

If my father gifted his house to me, how long would he need to live for to ensure the taxman could not claim back taxes between the gift date and death?

A lifetime gift more than seven years before the death of the donor will usually be the subject of the lifetime gift exemption. If this was a gift of money or any other asset, once the seven years had elapsed from the date of the gift then the asset would no longer form part of your father’s Estate in the event of his subsequent death.

However, with houses it is slightly more complicated in that you must beware of the “Reservation of Benefit Rule” whereby the Revenue will regard your father as having reserved an interest in the asset which he has given away, as he will continue to live in the property, without paying any commercial rent to you, the new owner.

In such circumstances the effect of the Reservation of Benefit Rule is that the Revenue will regard your father as having reserved an interest in the asset which he had previously gifted to you, the consequence of which will be that, for tax purposes, the Revenue will include the value of the property at the date of your father’s death in the overall value of his Estate.

Should your father’s Estate, inclusive of the value of the house, be below the Inheritance Tax threshold, then his gift will not have any adverse effect on the tax position as even if the value of the property is written back into his Estate, it will not be of sufficient value to result in any Inheritance Tax being payable.

If, on the other hand, the property is of substantial value, what may appear to be a substantial saving in Inheritance Tax as a result of the gift may not necessarily be available despite his lifetime gift should such gift fall foul of the “Reservation of Benefit Rule” .

Oct 25

My father held leasehold interest but my mother held freehold interest – what happens now?

My mother has recently died. She was the owner of the freehold interest in the property but on receipt of the Title Deeds we note that the original leasehold interest remains in the sole name of my late father who died 10 years ago. What do we need to do?

South Wales has a number of properties that were originally leasehold but as the years have passed occupiers have purchased the freehold interest.

It is often the case that on acquiring the freehold the freehold title will be registered separately to avoid having to merge the two interests and pay a higher Land Registry fee. This gives rise to potential difficulties if the property was originally in the sole name of one only of the spouses.

In this case that spouse has since died and the surviving spouse has purchased the freehold interest in her sole name. This leaves the freehold interest in the wife’s name and the leasehold interest in the late husband’s name.

A Grant of Representation will be required for each Estate in order to properly deal with the interests in the property that the respective spouses owned. This will deal with the deceased husband’s leasehold interest in the property. It will not take too long, but will inevitably delay any on-going sale.

It may be that the executors of each spouse’s Will may be the same and accordingly a Grant of Representation to each Estate can be obtained by the same individual.

Sep 23

My father died a widower without leaving a Will. Do his estranged sons have a claim?

My father died a widower without leaving a Will. I thought I was his only child but it appears he had two sons by a previous marriage who are making a claim against his Estate, which includes two properties. He had no contact with them in more than 40 years. Do they have a claim?

Unfortunately, your father died without making a Will and his spouse had predeceased him. In the absence of a Will he will be deemed to have died Intestate.

In an Intestacy assets will pass in accordance with the Intestacy Rules which is an attempt to anticipate what the deceased would have done had he made a Will. The order of beneficiaries entitled will dictate who is entitled to his Estate.

As he died a widower, but leaving children, then ALL of his children will share his Estate equally. Sadly, despite not having seen anything of his other children for over 40 years they are undoubtedly his children, just as you are. Therefore, all three of you will be entitled to share your father’s Estate equally.

In other words all three of you are entitled under the Intestacy Rules and his two sons need not necessarily make a claim against his Estate as they are absolutely entitled in any event.

This is different to two estranged sons who suddenly make a claim against an Estate where there may have been a Will leaving everything to you. In those circumstances their claim would not succeed unless they could show that they were dependants of your late father and, after no contact in 40 years, this would be impossible to prove.

It is examples such as this which emphasises the importance of making Wills – particularly if you have children by a previous marriage or previous relationship.

Aug 19

Is a Will valid if it is not signed?

My wife’s uncle has recently died. He intended to leave a Will and had left a piece of paper in his writing desk with details of what he wanted to happen to his Estate, but while the draft was dated it was not signed. He was childless and his parents and siblings are deceased. Would this draft act as his Will?

No. For a Will to be valid it must be signed by the deceased, who must sign in the presence of two independent witnesses, who themselves must also sign in the presence of the Testator (person making the Will) and both witnesses must state his or her name, address and occupation. The Will must then be dated with the date of signature of all parties.

A Will must also appoint individuals to administer the Estate, called Executors. The piece of paper in this case may represent an expression of wishes and, while dated, it was not signed and therefore has no validity whatsoever.

In the absence of a valid Will, the person making the Will will be deemed to have died Intestate and the order in which beneficiaries are entitled to share his Estate would be in accordance with the Intestacy Rules. On the basis that the deceased was widowed and his parents and siblings had predeceased him, and he had no children, this would result in nephews and nieces being entitled to the Estate.

Accordingly, your wife, as a niece of the deceased, may well be entitled to a share in her late uncle’s Estate.

* Emyr Pierce is Managing Partner of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email law@emyrpierce.co.uk