Tuesday, December 30th, 2008
A woman has been awarded nearly £4,000 compensation after she suffered burns to her back during a massage therapy at a beauty salon.
The court heard she still had a scar four years after the treatment.
The woman, who was 46 when the incident happened, had gone to the salon for massage therapy that involved her lying on hot stones. Following the treatment, she was aware of a tingling sensation on her back and then discovered red areas and blisters on her skin.
The therapist apologised and applied a cold flannel to the affected areas. The woman’s pain and discomfort increased when she went home and her GP later confirmed that she had suffered burns to her back.
The woman, who is now aged 50, experienced pain and discomfort for about 15 months after the therapy. She became very sensitive about the appearance of a scar that had formed and worried about it showing through light clothing. She felt restricted in what she could wear and was unable to go swimming because she was self-conscious about her appearance.
The salon disputed liability and negligence. It claimed the woman had extra sensitive skin and had failed to fill out its questionnaire correctly.
The court ruled in the woman’s favour and awarded her damages of £3,863 to compensate for her pain, suffering and loss of amenity together with her care costs and other expenses.
If you are unfortunate enough to have suffered injury contact Steven Kinch.
Tuesday, December 16th, 2008
A man has successfully challenged the validity of a second will made by his uncle at a time when his health was failing and he was no longer able to read.
The court heard that the uncle had made his first will when he was in good health and there was no doubt that he knew what he was doing. This will left all his estate to his nephew who was also appointed as sole executor.
Later, however, the uncle’s health began to deteriorate and one of his friends began to act as his carer, managing his financial affairs including drawing his pension.
The uncle then made a second will dividing his estate into three parts. His nephew was to receive half the estate while the carer and another friend were to each to receive a quarter. At the time he made this will, the uncle had medical conditions that affected both his hearing and his ability to read. However, the solicitor who drew up the will was satisfied that he had sufficient testamentary capacity and so knew what he was doing.
Later, the carer wrote to the solicitor saying that the uncle wanted to execute a codicil – that is to make an amendment – to change this second will. This change would give half the estate to the carer and reduce the nephew’s share to 25%. The uncle was unable to read the wording of this change and so the solicitor had to read it to him.
When the uncle died, the nephew challenged this second will and the codicil on the basis that they had been brought about by the intervention of the carer. He submitted that his uncle had been too ill to approve them.
The court held that if a person, as in the case of the carer, had helped to draw up a will in which he was a beneficiary then there was an onus on him to demonstrate that the process was legitimate. The court had to be confident that the will represented the deceased person’s true wishes and that he had not been not been unduly influenced by anybody else.
In this case, the second will and codicil had been influenced by the carer at a time when the uncle’s health was failing. The carer had not given any reason for the nephew’s share being reduced and had failed to establish that the second will truly represented the uncle’s wishes.
Therefore, the court ruled that the second will was invalid and the first will, leaving everything to the nephew, should be re-instated.
Will and probate claims require clear constructive advice.
Contact Steven Kinch for more information.
Wednesday, December 10th, 2008
A man has won a 16-year legal battle to prevent a doctor described as manipulative and calculating from inheriting £1m from his sister.
The High Court was told that the doctor moved in to live with her 91-year-old woman patient after treating her in hospital. The woman then made two wills in October 1990 leaving all her estate to the doctor.
The woman’s brother together with other family members challenged the validity of those wills saying the woman lacked testamentary capacity when the she made them. However, in 1998 the High Court ruled against them saying she was aware of what she was doing and approved of the contents of the wills.
Later, during police investigations into the woman’s death, further evidence emerged. The two witnesses to the woman’s third will said they had not actually seen her sign it. Neither had they signed any documents to that effect. They had merely signed a document without actually knowing what it meant.
The family renewed their legal challenge and now the High Court has ruled in their favour. The judge ruled the two contested wills to be invalid because the woman was suffering from dementia at the time and so lacked testamentary capacity when she signed them.
The judge said he found the doctor, who represented herself during the hearing, to be untruthful, manipulative and calculating. By contrast, he considered the woman’s family to be a close-knit unit. Her brother wrote frequently to her and visited her on her 90th birthday.
The ruling means that her family will now inherit the estate under the terms of a will she made in 1978.
This has been something of a legal marathon for the family but, of course, most cases are settled far more quickly. Please contact Maria Turner if you would like more information about any aspect of wills and probate.
Thursday, December 4th, 2008
A court has ruled that a woman should be allowed to keep her family home even though her husband’s creditors wanted it to be sold to help clear his debts.
It is an unusual case and illustrates the benefits that can arise from making a declaration of trust.
The husband had bought the house several years before in his own name. However, he had an alcohol problem and also liked gambling. Eventually, his wife became concerned about the family’s financial security. To protect her future, she insisted that her husband made a declaration of trust in her favour which effectively handed the house over to her.
At the time this was done the husband had no significant debts and was able to meet all his mortgage payments. That changed a few years later, however, when he fell into serious debt and was declared bankrupt.
The trustees in the bankruptcy applied for an order setting aside the declaration of trust the husband had made regarding the house and his wife. They argued that it had simply been a way of putting the property beyond the reach of his creditors.
The husband denied this and said the declaration had been made at his wife’s insistence. She had threatened to divorce him if he didn’t sign over his interest in the family home to her. The only reason she had in taking such assertive action was to maintain her family’s financial security.
The court ruled in the family’s favour. The judge said he was satisfied that the main reason for the husband’s action was to maintain his marriage. The effect was to place the house beyond the reach of the creditors, but while that might now be a beneficial consequence of the declaration of trust, it was not the reason for making it in the first place.
The ruling does not mean, of course, that a person facing financial difficulties can avoid creditors by simply placing assets in someone else’s name. However, it does show that a declaration of trust made in good faith can help to protect a family’s financial security.
For your free information leaflet on Declarations of Trust please email medwards@bbc-law.co.uk now
Saturday, November 22nd, 2008
Following changes introduced in the pre-budget statement last October, the rules relating to inheritance tax (IHT) allowance have now been changed. They now allow a person, on death, to pass on their nil-rate allowance to their spouse or civil partner. This can mean that up to £624,000 of assets pass free of Inheritance Tax on the second death, at current rates.
Everybody has always had an allowance on death upon which there will be no IHT to pay. Everything above that amount is liable to be taxed at 40%.
Before last year’s changes, the allowance was lost if the deceased person left their entire estate to their spouse or civil partner, as the estate would pass under the spousal exemption, so there would be no liability to IHT. Then on the second death, the size of the estate would include the assets of both partners, and there would be a liability to IHT on everything above the nil-rate band.
In order to retain the nil-rate allowance of the first person to die, married couples and civil partners had to set up discretionary trusts to transfer assets to the value of the allowance away from the estate of the survivor. This ensured that, on the second death, the first person’s allowance could still be utilised, and was not lost.
The changes apply to married couples and civil partners who are now able to transfer the unused part of their nil-rate band to their surviving spouse. The transfer is passed as a percentage uplift to the allowance available on the second death.
For example; if a perosn has died this year, when the nil-rate allowance is £312,000 but their spouse had died in December 2005 when the nil-rate allowance was £275,000 and the entire estate to the spouse then the estate will now be able to take advantage of 2 x nil-rate allowance at todays rates. The spouse’s estate can therefore benefit from £624,000 of nil-rate allowance, and IHT will only be payable on anything above that amount.
This will clearly assist many families, who will no longer have any liability to IHT. However, there may be other issues that make a trust beneficial.
If you would like more information on Wills or Inheritance tax then contact Marie Turner now.
Wednesday, November 12th, 2008
The Government has announced plans to make it easier and cheaper to register Lasting Powers of Attorney (LPA).
It’s hoped the move will encourage more people to prepare for a time when they may be unable to make important decisions for themselves about their finances and about their health and welfare.
The proposals have been put forward as part of a review of how well the Mental Capacity Act 2005 is working. The Act came into force in October last year and introduced LPAs as a replacement for the previous system involving Enduring Powers of Attorney.
The new LPAs proved even more popular than expected. The Office of the Public Guardian (OPG), which administers the registration process, says that three times as many people applied to register powers of attorney over the last 12 months as in previous years.
The sudden surge in demand has led to delays which the OPG has been trying to address.
The OPG is to carry out a wide ranging review of the Act but will concentrate at first on powers of attorney. It is now conducting a consultation process on a number of proposals including reducing the registration fee from £150 to £120.
There are also plans to redesign the form and guidance notes to make them clearer and “introduce a new level of supervision of court-appointed deputies to give short-term support and scrutiny where needed”.
The Justice Minister, Bridget Prentice, said: “The Mental Capacity Act is an important piece of legislation that enables people to plan for the future, and helps protect the most vulnerable people in society. This welcome review will ensure the law continues to deliver what people need.”
LPAs offer a wide range of options to people who want to prepare for a time when they may lose some of their mental capacity.
The property and finance LPA allows you to appoint someone to look after your financial affairs if you become incapable of doing so yourself. The personal welfare LPA lets you grant an attorney authority over such matters as health care and the kind of treatment you receive.
The Office of the Public Guardian needs to register LPAs before they can be used. Registration is followed by a 42-day statutory waiting period to allow people to raise objections to the registration. This waiting period is one of the safeguards built into the process to ensure that the LPA has been drawn up properly and is not fraudulent.
The consultation period will end on 15th January next year and some of the changes will be introduced from the following April.
Please contact Maria Turner if you would like more information about Lasting Powers of Attorney.
Monday, November 3rd, 2008
A woman whose marriage broke down following an accident in which she suffered neck and back injuries has been awarded more than £400,000 in compensation.
The woman was 29 at the time of the accident and had two children. She was in her car when it was hit from behind by another vehicle. The other driver admitted liability.
Before the accident the woman was very active and enjoyed competitive horse riding, bike riding and skiing. She worked as a cleaner and child minder. After the accident, however, her ability to walk and stand was limited and she had to use a stick for support.
She underwent several courses of treatment to relieve the pain from her neck and back injuries but to little effect. She went on to suffer from depression which eventually led to the break-up of her marriage.
The woman was awarded a total of £421,073 compensation. The figure included £40,000 for her suffering and loss of amenity, £248,603 for future loss of earnings and £108,840 for miscellaneous expenses including child care, cleaning and travel expenses.
Anyone who suffers injury as a result of someone else’s negligence is entitled to claim compensation.
Please contact Steven Kinch if you would like more information.
Thursday, October 30th, 2008
There has been a large increase in the number of people taking steps to prepare for a time when they may no longer have the mental capacity to make decisions for themselves.
The annual report of the Office of the Public Guardian (OPG) says that in the last 12 months, three times as many people applied to register powers of attorney as did in previous years. The report says the increase is due to the Mental Capacity Act 2005 which introduced Lasting Powers of Attorney (LPA) as a replacement for Enduring Powers of Attorney (EPA).
The old EPAs allowed people to appoint someone to look after their financial affairs if a time came when they were no longer able to do so themselves. The new LPAs work in a similar way but are broader in scope because they also provide the facility to appoint an attorney who can make decisions on your behalf about health and welfare matters should the need arise.
LPAs have to be registered with the OPG before they can be used. There then follows a 42-day statutory waiting period to allow named individuals to raise objections they may have to the registration. This is one of the key safeguards to prevent LPAs being drawn up fraudulently.
The sudden increase in demand has put pressure on the OPG. Its Chief Executive Martin John said: “The introduction of the Mental Capacity Act has resulted in a high volume of applications to register powers of attorney, a sign that people are increasingly thinking about and planning for their futures.
“Due to the unexpected and considerable demands on our services, we are continually improving our processes and deploying our staff to help manage the workload. We will continue to work closely with customers and stakeholders to make sure that we can deliver the service they expect.”
Please contact Sue Bedwell if you would like more information about Lasting Powers of Attorney.
Wednesday, October 22nd, 2008
The new tax rules for “income in possession trusts” have now come into effect
The Finance Act of 2006 changed the rules affecting the tax status of the trusts in certain circumstances. Holders of existing trusts were given until 6th April this year to rearrange them if they wished, such as by transferring them to a different family member, while still remaining under the old tax regime. That transitional period was then extended until 5th October.
The new rules, effective from 6th October, mean that when the income beneficiary of an existing trust is changed, the new beneficiary will be liable to pay tax on withdrawals at up to 6%. There will also be a 6% charge every ten years.
The arrangements can be complicated. Please contact David Edwards if you would like more information.
Friday, October 10th, 2008
The Government is to raise the amount of money a husband or wife can automatically inherit if their partner dies without making a will.
However, it could still leave the surviving spouse at risk.
Many people believe that when a person dies, all their estate will be passed on to their surviving spouse. This is not the case. The estate is in fact divided between surviving relatives in a manner laid down by the law.
At present, if the deceased person has children then the surviving spouse receives £125,000 from the estate, assuming it contains that level of assets. If there are no children then that figure is increased to £200,000.
The rest of the estate would be shared out between the children or other relatives if there are no children. These thresholds - known as the statutory legacy for people dying intestate, that is, without having made a will - have been in force since 1993.
Now they are to be increased to £250,000 when a deceased person leaves children and £450,000 when there are no children. The increase is well below house inflation over the same period and also below the figures recommended by the Department for Constitutional Affairs in 2005. It suggested £350,000 and £650,000 respectively.
The level of the threshold is very important because most people’s main asset is their house. If the value of the house is above the threshold, the surviving spouse may have to sell up so the deceased’s children can receive their share of the inheritance. There have been examples where this has happened.
Announcing the increases, the Justice Minister Bridget Prentice, said: “This increase will give extra protection to married couples and civil partners whose spouse or civil partner dies without making a will. But it also highlights how important it is for both men and women to make arrangements for their loved ones in the event of their deaths.
“Married couples and civil partners should not assume that when their spouse or civil partner dies, they will automatically be entitled to everything. It is up to individuals to make sure that their wishes are respected by making a will.
“My message to people is, don’t leave it to chance. Make sure your loved ones are properly provided for by leaving a will.”
The new statutory legacy figures come into effect on 1st February 2009.
It is perhaps unfortunate that the Government did not raise the threshold further but the advice to make a will is well founded and should be followed by anyone who wants to ensure that their estate is divided according to their wishes.
Failing to make a will can lead to considerable hardship and heartache for your spouse and family. Please contact Maria Turner if you would like more information about wills and probate.
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