Australian Court decides a text is a Will

The widow of a man who took his life applied to the courts in Australia to be appointed to administer his estate. His brothers contested the case on the basis that an unsent text found on his phone was sufficient to constitute his Will. The case went all the way to the Supreme Court in Queensland.

The text read:

“Dave Nic you and Jack keep all that I have house and superannuation, put my ashes in the back garden with Trish Julie will take her stuff only she’s ok gone back to her ex AGAIN I’m beaten. A bit of cash behind TV and a bit in the bank Cash card pin 3636
My will”

Despite Mrs Nicholl, his widow arguing that her late husband had died intestate and, as such, she was entitled to be appointed, the Supreme Court ruled against her. The Court decided that the text was sufficiently clear to indicate the deceased’s intentions and despite not being sent or signed, could be considered his Will.

The legal interpretation in Scotland

The rules in Australia regarding Wills were relaxed some years ago. This can’t happen in Scotland as there aren’t any provisions that would allow for a digital Will. However, the Law Commission in England is conducting a consultation into Wills and how these might be constituted and this will take into account current technology. You can view that Consultation here.

If you would like to read the Australian Supreme Court judgement, please click here.

We continually remind our clients that it pays to be organised and to prepare for the inevitable so if you haven’t yet done so – contact us today and make your Will.

Inheritance Tax – Residence Nil Rate Band

A new Inheritance Tax allowance comes into force on 6th April 2017. This will apply to property left to direct descendants. The Residence Nil Rate Band, as the new relief is called, means that from this year, a new tax free allowance will apply to a property left by a deceased person to a descendent. If there is more than one property in the estate, the executor can decide which property is to be allocated for this purpose.

This allowance starts at £100,000 and will rise in £25,000 blocks over the next 4 years until, in the tax year 2020/21, it will stand at £175,000. If the property is held in joint names of a married couple or civil partners, each of the parties enjoys this relief - and it’s transferrable from one to the other on death if it’s not been used up.

Here are the basic rules. The Residence Nil Rate Band will apply if the:

  • individual dies on or after 6 April 2017
  • individual owns a home, or a share of one, so that it’s included in their estate
  • individual’s direct descendants such as children or grandchildren inherit the home, or a share of it, and
  • The value of the estate isn’t more than £2 million

Direct descendants include, the children, grandchildren and further lineal descendants of the deceased. They also include the spouse or civil partner of a direct descendant. Also included are step children, adopted children, fostered children and children of whom the deceased was guardian.  You can find an outline of what are considered to be descendants on the HMRC website. You can click here to view this information.

Direct descendants don’t include nephews, nieces, siblings and other relatives who aren’t included in the list above.

The Residence Nil Rate Band is in addition to the current Inheritance Tax (Nil Rate Band) threshold of £325,000. This is also transferrable between spouses or civil partners if it is not exhausted on death.

The total Inheritance Tax allowances available to married couples and civil partners from the tax year 2020/21, will be £1 million – and after that the allowances will increase in line with inflation (as measured by the Consumer Price Index).

There are a number of helpful case studies on the HMRC website ranging from the most simple and straight forward to the very complicated. You can view those case studies by clicking here.

Interestingly, if one spouse or civil partner dies before April 2017(whether or not they owned a share of the property or had already passed a share to children), the survivor will be able to use both of their family home allowances when he or she dies.

If you have a Will, you need to make sure it’s up to date so that you can take advantage of this tax-free allowance. If you don’t have a Will, you need to make one now to ensure you can decide who will benefit from this allowance.

Inheritance Tax planning is a complex process and we recommend this be undertaken by an expert in this field.

Get In Touch

Contact us on 0141 887 5271 (Paisley) or 0141 886 5678 (Renfrew).

Some decisions are better taken sooner rather than later...

It’s understandable that when making certain big decisions, people often stall or put it off altogether.  Often a lack of information, or an information overload, can make the experience particularly daunting.  However, we should consider the importance of making these decisions, and what’s more, making them at the right time.

Power Of Attorney

One such decision which is often overlooked is putting in place Power of Attorney.  It’s likely that you’ve heard this term being used before, whether that be in a passing conversation or even on TV, but we would stress the importance of making this decision with regards to your personal welfare, finances and property.

For those of you who may not know much about this, a Power of Attorney is a written document that appoints a person(s) of your choice as your Attorney, who therefore has the authority to make decisions on your behalf, should you not be able to do so.

There is a common assumption that it is not as important to grant Power of Attorney until you are older, however we feel you should consider doing so at the earliest opportunity.  Many people have their Will drawn up around the time they buy their first property, or when they start a family, this would also be an ideal time to grant your Power of Attorney.

Interestingly, you may prioritise drawing up a Will, in the interest of passing on your assets, but in reality, Power of Attorney is much more important as you never know when you may become incapacitated and unable to manage your day-to-day life, including your own welfare and finances.  Should this happen, your Attorney would be able to make certain decisions (as established by yourself) on your behalf.

However, you will not be able to grant Power of Attorney after an accident has occurred and applying to do so at this time is an extremely laborious and potentially expensive exercise through the courts.  All of this is avoidable if you have chosen your Attorney beforehand.

Not only are there potentially extensive costs, but this process is not quick or easy and therefore could take months to have someone officially granted Power of Attorney, all happening at a time you really need someone you trust looking after your interests.

Responsibilities of Attorneys vary, as they can manage day-to-day finances such as bills or larger decisions such as investments.  Nevertheless, we suggest granting Power of Attorney to one or more person, as soon as possible to ensure that your affairs continued to be managed as you, would manage them.