Bank of Mum & Dad

According to a recent report by insurer Legal and General,  there is a suggestion that parents are providing financial support equivalent of the 10th biggest mortgage lender to assist their family members getting onto the property market.

If you are considering helping a family member with the purchase of a property then you should consider the following questions:-

Do you intend the money to form a gift?

This means that you do not wish for the money to be returned to you at any point in the future.  A gift of money that exceeds your annual gift allowance will need to be survived by you for seven years in order for it to pass out of your estate for inheritance tax purposes.

Do you want the money back either by repayments or capital upon sale?

This means that you are making a loan.  A loan can be documented by a Loan Agreement with terms agreed between the parties.  It can either be secured over the property or unsecured.  However, some mortgage companies may not find this acceptable and therefore it may affect your family members ability to obtain the full mortgage they require.  

Do you want to protect the money?

Is your family member buying a house with a third party, someone unrelated?  You would need to carefully consider how you intend the benefit of the money you are providing to be held. Matters can become complicated in situations such as these, in trying to balance the interest of the mortgage company, your family member and your own intentions!

We would recommend that you take legal advice if you are considering benefitting a family member in this way, and here at Seldons we can provide the advice and expertise you need in a this regard. Why not take advantage of our 15 min free interviews?

Government Push for Wills and Lasting Powers of Attorney

The Ministry of Justice this week has launched its own campaign which is aimed at encouraging individuals to create a Lasting Power of Attorney (LPA) and a valid Will  to ensure protection for your family should something happen in the future.

The useful links above detail step-by step how you can go about doing this.

If you would like to discuss creating a LPA or creating/updating your Will, please contact a member of our Private Client department who will be happy to help you.

What would happen if you die without a Will?

From the 1st October this year new legislation came into force that changes the way a person’s estate passes to their family on their death where they have not made a Will.

The main changes are as follows:-

1.A Husband and Wife without children.

On the death of the husband/wife the whole estate will pass to the surviving spouse. In effect what this means is that the rights of parents or brothers and sisters of the deceased who would have received an inheritance under the old rules where the estate exceeded £450,000 have been removed in favour of the whole estate passing to the surviving spouse.

2.A Husband and Wife with children.

On first death of the husband/wife, the surviving spouse and children will benefit. The surviving spouse will receive a statutory legacy of £250,000 together with all the deceased spouse’s personal chattels (personal chattels have been given a new meaning please see below). The surviving spouse also receives one half of the remaining estate over and above £250,000. The other half is held on trust for the children and divided equally between them once they reach the age of eighteen years. The effect of this is the children now receive less than they would have done under the old rules.

“Personal Chattels” This now covers all physical moveable property things that can be touched and moved except for freehold/leasehold property, money, securities or investments and property used solely or mainly for business purposes, property held as an investment.

Wills completed before the 1st October 2014 may refer to Chattels by reference to section 55(1)(x). That definition will still apply, however, it is not as wide as the new definition as set out above.

To discuss these changes and what they may mean for you and your family please call 01237 479121 and ask for the Private Client Department


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