Thursday, 31 October 2013

The curious incident of the trust (and) the matrimonial property regime

Estate planners may dismiss the recently reported Court of Appeal case of Slutsker* v Haron Investments Ltd & Another ([2013] EWCA Civ 430) as one for divorce lawyers only.  However, for anyone engaged in setting up trusts or other wealth structuring vehicles, the case is an intriguing one.   

Thursday, 17 October 2013

What do SKI-ing and Inheritance Tax have in common?

On a week’s escape from the office recently, I had the pleasure of residing at a rather swanky Yorkshire hotel for a few days.  I was enjoying the novelty of a leisurely read of the paper over breakfast when I found my attention drawn to a conversation ensuing offstage left.
A lady was regaling her companions with tales of a forthcoming cruise.  “Of course the kids will be horrified with all this SKI-ing I’m doing.”  There was a pause, presumably while her audience tried to visualise skiing and cruising at the same time.  “Haven’t you heard of SKI-ing?” the lady continued. “Spending the Kids’ Inheritance.”  A lot of merriment ensued.  I busied myself with my eggs and soldiers (they are back on the menu at posh hotels, although my mum’s were better) but Inheritance Tax (IHT) had found me again, in deepest, darkest Yorkshire.
For married couples and civil partners, reducing their combined assets to at or below the IHT transferable nil rate band (currently, at most, £650,000) by the time of the survivor’s death is a great way of mitigating all IHT worries.  However, getting the timing right can prove tricky!  And for some, their main residence, which they can’t easily give away for IHT purposes, prevents them from reducing their wealth below £650,000.  Also, old age can be an expensive business (funding social or nursing care maybe) and this does not sit well with the perception that a lot of IHT planning involves denying yourself access to your assets – which, incidentally, is not necessarily the case.

Thursday, 3 October 2013

A ‘how to’ for attorneys and deputies

When a person loses capacity to look after their UK situated assets, usually someone has to assume responsibility for their management.  The well advised have often made an Enduring Power of Attorney, or nowadays, a Lasting Power of Attorney naming someone they trust to act as their attorney.  For everyone else, there’s the Court of Protection, which will name whomever the judge deems most appropriate to deal with the assets (known as the deputy).
Given how common losing capacity is in our long-lived population these days, it’s surprising that it’s taken this long for a few cases to come along to clarify how attorneys and deputies should invest an incapable person’s (the donor’s) assets and the parameters of acceptable gifts that can be made.  However, like the proverbial London buses, indeed they have come together this summer, in the guise of Re Buckley, Re GM and In the matter of Joan Treadwell.
So, if you are an attorney or deputy yourself, or advising those who are, here are some headlines from those cases: