Keep the Tax Man away with #WILL power! An Interview with YVA’s Managing Partner Chris Yiannakas and LGR’s (London Greek Radio 103.3 FM) Pierre Petrou on the importance of having a Will and the benefits of Estate Planning.
In case you missed the interview that aired on-air Friday 15th May 2020 you can read the whole interview/Q&A session here:
Pierre at London Greek Radio
We are living in challenging times and some people may be thinking about making a will on the line I have Chris Yiannakas from YVA Solicitors in North Finchley. Hi Chris…
CY at YVA Solicitors
Hi Pierre, how are you?
Pierre at London Greek Radio
Very well thank you. Thank you for joining us here on LGR.
Question – What are the advantages than in preparing a will?
CY at YVA Solicitors
The biggest advantage is that there is clarity. A person leaving a will is telling the world what they want to do with their assets once they pass away. If somebody does not prepare a will then the law dictates as to who gets what. So let me just give you a scenario. You could have a couple who are living together as common-law husband and wife for 20 years. They have two or three children and the common law husband passes away. If he hasn’t prepared a will, leaving everything to his partner, she will effectively receive absolutely nothing. So there are definite advantages in preparing a will because one can decide where to leave their assets and to who.
Pierre at London Greek Radio
Right, so that’s what would happen.
Question – What would actually happen to assets if you died without making a will?
CY at YVA Solicitors
Well if somebody dies without a will then they are said to die in intestate and if somebody dies intestate, the law dictates who gets what.
Pierre at London Greek Radio
Right…
CY at YVA Solicitors
The intestacy rules basically say that if say somebody dies and they have a spouse, the spouse gets everything. If they die with a spouse and have children, the spouse will get all personal belongings, will get £250,000 statuary legacy and whatever is left will get divided as to 50% to the spouse and the remaining 50% to the children. If somebody dies without a spouse but with children, the children get everything.
Pierre at London Greek Radio
Ok…
CY at YVA Solicitors
The intestacy rules do not cover a situation where somebody may want to leave some money to a charity or they may want to leave a valuable watch to a close friend. It doesn’t cover these situations and that is why it is important that people do wills.
Pierre at London Greek Radio
Ok let’s go back a minute, you said the word spouse, Question – What is the definition of a spouse?
CY at YVA Solicitors
Spouse also covers common-law marriages, so, for instance, a gay relationship where the couple enter into a civil marriage ceremony it will cover such a situation as well as the conventional husband and wife situation. It does not cover couples that are living together as common-law husbands and wives.
Pierre at London Greek Radio
Ok so girlfriend, boyfriend, that sort of thing is not covered
CY at YVA Solicitors
Correct, it does not cover those situations.
Pierre at London Greek Radio
Right ok, now Question – What if I transfer my house to my children, will they have to pay tax when I die?
CY at YVA Solicitors
It depends. Unfortunately, within our community, I hear many situations where parents transfer the house that they live into their children thinking that when they pass away they will have no assets and therefore avoid any inheritance tax. I hear this many, many times but unfortunately, the inland revenue are clocked on – if a parent transfers the house that they live into a child or children, if they pay no market rent for the occupancy of that property, then the property will fall part of their estate for inheritance tax purposes in which case inheritance tax will be payable.
Pierre at London Greek Radio
Right
CY at YVA Solicitors
So it is essential that if anyone is going to transfer a property, they must take legal advice as to how it should be done properly, otherwise, the kids will end up having a potential inheritance tax liability.
Pierre at London Greek Radio
Question – And does a UK will cover assets for example in Cyprus?
CY at YVA Solicitors
It could do however I always say to clients: if they have assets abroad, they must do a will in the jurisdiction where those assets exist. Firstly because I don’t know what the laws are in a foreign jurisdiction, and secondly, I know in Cyprus for a fact that there are forced heirship rules. In other words, if I were to prepare a will leaving everything that I may have in Cyprus to my children and I exclude my wife, the forced heirship rules will force the estate to give something to the wife. And that is why it’s absolutely vital that people do seek legal advice in relation to the jurisdiction where those assets exist.
Pierre at London Greek Radio
Ok let me give you another scenario then Question – Where someone is terminally ill or in their final dies of life, or maybe is in a hospital or home or bedridden, can a will be made urgently on short notice?
CY at YVA Solicitors
Well of course – Many times I’ve been called to attend nursing homes or to go to hospitals where the life expectancy of the individual is short because they have serious health problems and I have to attend and take urgent instructions, prepare a will and then go back and get the will executed. The most important thing however is that the individual must have mental capacity, must understand what they are doing. If they are in a coma or if they are so ill that they don’t understand what they are doing, then unfortunately they wont have the mental capacity to understand and sign a will; but many a times people who are gravely ill, whether they be at home or in a nursing home or a hospital – yes a solicitor should be able to attend to take instructions. In this day and age, through the current problems that we are having with this pandemic, it may be a little bit more of a problem but in normal times yes, it’s possible, of course it is.
Pierre at London Greek Radio
Question – And what happens when a will is challenged or disputed?
CY at YVA Solicitors
Technically speaking anybody can challenge a will. The question is are they going to have any chance of succeeding in challenging a will. Just because somebody is excluded from a will does not give them the divine right to have a share of the estate. If a will is professionally drawn by a solicitor and the individual who is making the will has mental capacity, has not been coerced or forced in any way then the chances of somebody successfully challenging a will are remote but obviously can never be excluded. At the end of the day it is a very expensive process and that’s why it is important that people do wills – because there is clarity, and hopefully it reduces the chances of anybody disputing the terms of the will.
Pierre at London Greek Radio
Ok and on the same sort of note Question – Does a will come into effect, should one lose mental capacity but does not die, for example when one suffers from Dementia?
CY at YVA Solicitors
That’s an interesting question. No – a will only takes effect upon death, so in other words if somebody suffers from Dementia or has a stroke and as a result loses mental capacity – I mean we all know people whether it be friends, relatives where they have lost capacity and cannot run their affairs but they do not pass away and it could be for 6 months, 2 years, 10 years. I call it the vacuum period as a will does not take effect because it only takes effect upon death. There is a vacuum because there is nobody in control of that individuals’ financial affairs. To avoid that problem people should register what is called a Lasting Powers of Attorney (LPA) and then if somebody does lose mental capacity their attorney has the right to run their property and financial affairs. That is the way of dealing with that vacuum period. If someone has already lost mental capacity, they can’t sign an LPA in which case a member of the family or a loved one would have to make an application to the court of protection to be appointed as the individuals deputy and then they take that role.
Pierre at London Greek Radio
Ok Question – If you already have a will but your circumstances have changed for example due to a divorce, remarriage, or dispute with someone who is a beneficiary, can you change your will?
CY at YVA Solicitors
Of course, a will can always be changed. A will only takes effect upon death. I always say to my clients that it is sensible to review a will every 5 years because circumstances inevitably changes, assets may change, beneficiaries may change. Most importantly if somebody remarries – a marriage ceremony revokes an existing will, which means that if you prepare a will and then marry, that will be no longer applicable, it’s void.
Pierre at London Greek Radio
Oh right
CY at YVA Solicitors
You have to do a new will upon marriage.
Pierre at London Greek Radio
Right ok…
CY at YVA Solicitors
Always it’s sensible to review a will. I always say to my clients to review their wills every 5 years. If you are happy with it, ok it carries on, if you want to change something it can be changed.
Pierre at London Greek Radio
Question – So what is the process then for making a will and what would I need to do?
CY at YVA Solicitors
Well some people prepare their own will – they go to Smiths and buy a standard will and complete it. The problem with that is that if they don’t follow the procedure properly, there is a chance of that Will being void. The law dictates that for a will to be valid it should be in writing, it should be signed, and must be witnessed by two witnesses who are present at the same time. The witnesses must be independent; you can’t be a beneficiary and be a witness in a will, because that will prevent that gift from taking place. Ideally, and obviously I am a solicitor, I will promote the legal profession, you make an appointment to see a solicitor, you give them instructions, the solicitor will advise you on inheritance tax issues and the way to try and save inheritance tax in the longer term, if it’s possible, and then draft up the will in accordance with instructions received.
Pierre at London Greek Radio
Question – Ok so Chris, give us your website and how can people contact you?
CY at YVA Solicitors
My website is www.yvasolicitors.com my personal email is cy@yvasolicitors.com. Also, I am more than happy to speak to people over the phone, my number is 0208 445 9898. Even though we are in lockdown at the moment, we are all working from home, so I can take calls, no problem.
Pierre at London Greek Radio
Chris from YVA Solicitors, North Finchley. Thank you very much for joining us here on LGR today.
CY at YVA Solicitors
Thank you very much and regards to all of your listeners and keep safe, all of you.
