WILLS AND INCENTIVES

Wills and Incentive Trusts

Friday, 16 September 2011

Wills and Incentive Trusts

A guide to leaving your assets
by
Nish Patel

What is a Will ?


What is a Will ?

A will is a legal document which sets out
how you wish your assets to be
distributed on your death and who should
manage your assets

Why m ake a Will ?


Why m ake a Will ?

I f y o u d o n o t m a k e a Wi l l t h e n t h e
following problems arise


If you do not make a Will....



! Yo u a r e r e g a r d e d a s I n t e s t a t e o n y o u r
death and your assets will not pass on as
you wish



you wish

! Yo u r a s s e t s w i l l t h e n b e d i s t r i b u t e d i n
accordance with the Rules of Intestacy



you wish

! Yo u r a s s e t s w i l l t h e n b e d i s t r i b u t e d i n
accordance with the Rules of Intestacy

!T h e R u l e s o f I n t e s t a c y a r e e x p l a i n e d l a t e r


! If you are unmarried your partner will
not get a share



not get a share

! Yo u w i l l n o t b e a b l e t o a p p o i n t s o m e o n e
of your choice to look after your assets or
your children,



not get a share

! Yo u w i l l n o t b e a b l e t o a p p o i n t s o m e o n e
of your choice to look after your assets or
your children,

! Yo u m a y n o t b e a b l e t o p l a n f o r Ta x
Savings if appropriate

W h at c a n yo u l ea v e ?


Rea l ly e ve r y t h i ng y ou ow n


Rea l ly e ve r y t h i ng y ou ow n

This is known as your Estate
a n d i n c l u d es. .. . .

Yo u r E s t a t e i n c l u d e s . . .



• Mone y in a n y a ccou n t s a n d ca sh




• Land and Buildings





• Stocks and Shares





• Pro c e ed s of I n sur a n ce P o l i ci e s





• Pro c e ed s of I n sur a n ce P o l i ci e s
• Cont e nt s of S a f e D ep o s i t b o x e s



• Gold and Jewellery




• Va l u a b l e i t e ms su ch a s p a i n t i n g s





• P e rs on a l a n d h o u se h o l d g o o d s





• P e rs on a l a n d h o u se h o l d g o o d s

• C a rs


Who sho u ld yo u l ea v e y o u r a s s e t s t o ?



• The p e rson s w h o b e n e fi t f rom y ou r
est a t e a re c a l l e d B en efi ci a r i e s



• Yo u c a n l e a v e t o w h o m e v e r y o u w a n t



• Yo u c a n l e a v e t o w h o m e v e r y o u w a n t

• How ever p e op l e common l y l e a ve
their assets to...


Peopl e c ommon l y l e av e a s s e t s t o . .



• Their Husband , Wife or Partner



• Their Children , older or younger




• Family Members




• Family Members

• Friends




• Family Members

• Friends

• P eople als o so me t i m es l ea v e a s s e t s t o . . .

P eo ple so me t i me s b e n e fi t



• C h a ri t i es



• C h a ri t i es
• R eli gi ou s I n s t i t u t i o n s



• C h a ri t i es
• R eli gi ou s I n s t i t u t i o n s

• For good causes


Who w ill ta ke c a re o f e v e r y t h i n g ?



• In order that your affairs are looked
a ft er you ma y ap p o i n t . . .




• G u a rd i a n s





• Executors





• Executors

• Trustees


W h at a re E x e cu t o r s ?



Ex ecu t ors a re p e r sons wh o y ou ca n
ap p oint t o look a f t e r t h e admi n i st r a t i on
of your estate



Ex ecu t ors a re p e r sons wh o y ou ca n
ap p oint t o look a f t e r t h e admi n i st r a t i on
of your estate

They will collect together the assets
and de al w ith t h e p a y me n t o f d e b t s a n d
see t ha t t h e r i g h t p e op l e re ce i ve t h e i r
shares

Wh a t a re Tru s t ee s ?



Trustees are persons who will look
af t er y ou r e st a t e i n si t u a t i on s w h e re
y ou h ave se t ou r con di t i on s w h i ch a re
req ui red t o b e f u l fi l l e d b e f ore
di st ri b u t i on or w h ere y ou r
Beneficiaries are still young



Trustees are persons who will look
af t er y ou r e st a t e i n si t u a t i on s w h e re
y ou h ave se t ou r con di t i on s w h i ch a re
req ui red t o b e f u l fi l l e d b e f ore
di st ri b u t i on or w h ere y ou r
Beneficiaries are still young

In g ene ra l Ex e cu t or s a n d Tru st e e s ca n
be the same people

Wh om sh o u l d I a pp o i n t ?


Peo pl e c o mmon l y a p p o i n t . . . .



Their Husband , Wife or Partner




Their Children if they are old enough





Other Relatives





Other Relatives

C l o se F ri e n d s



Solicitors



Solicitors

Banks



Solicitors

Banks

O t h e r p ro f e s s i o n a l s s u c h a s
Accountants


Wha t i s a Gu ard i a n ?



A G uardia n i s a p e r son wh o y ou ca n
a p p oi n t t o l ook a f t er y ou r mi n or
children



A G uardia n i s a p e r son wh o y ou ca n
a p p oi n t t o l ook a f t er y ou r mi n or
children

The choi ce of a G u a rdi a n ca n b e ma de
fro m c lo se f a mi l y a n d fr i e n d s


P ow ers o f A t t o rn e y


P ow ers o f A t t o rn e y

Should consider at time of Will

Lasting Powers of Attorney


Wills


Wills
F o r a Wi l l t o b e v a l i d i t m u s t b e ;


Wills
1. Ma de b y a p e r son w h o i s a g e d 1 8 or
over; and


Wills
over; and
2. I n w r i t i n g ; a n d


Wills
over; and

3 . Sig ne d b y t h e p e r son ma k i n g t h e
Will in the presence of two witnesses


Wills
over; and

4. Sig ne d b y t h e t w o w i t n e sse s i n t h e
p re s e n c e o f t h e p a r s o n m a k i n g t h e Wi l l


Wills
over; and

4. Sig ne d b y t h e t w o w i t n e sse s i n t h e
p re s e n c e o f t h e p a r s o n m a k i n g t h e Wi l l
continued....

Wills

5. Ma de vol u n t a r i l y a n d wi t h ou t u n du e
in fl u en c e f rom a ny o n e ; a n d


Wills

5. Ma de vol u n t a r i l y a n d wi t h ou t u n du e
in fl u en c e f rom a ny o n e ; a n d

6. Made b y a p e r s o n w h o i s o f s o u n d
mi nd and w h o i s a w a re of t h e n a t u re of
w h a t h e i s s i g ni n g


Wills
It wi ll b e see n t h a t t h e for ma l i t i e s of a
Will are quite simple


Wills

However ca re a n d a t t e n t i on n e e ds t o b e
taken with the drafting of teh clauses so
t hat t h ere i s n o a mb i g u i t y ot h e r w i se
p ro b l e m s a n d d i s p u t e s m a y a r i s e


Wills

However ca re a n d a t t e n t i on n e e ds t o b e
taken with the drafting of teh clauses so
t hat t h ere i s n o a mb i g u i t y ot h e r w i se
p ro b l e m s a n d d i s p u t e s m a y a r i s e
In t he circu mst a n ce s p rof e ssi on a l
a d v i c e i s i m po rt a n t

Does a Will need to be registered



In England and Wales a Will does not
ne ed t o be re g i st e re d



In England and Wales a Will does not
ne ed t o be re g i st e re d

H ow e ve r i t c a n b e v o l u n t a r i l y
reg i s t e re d w i t h t h e
N a t i o n a l Wi l l R e g i s t e r


Funeral


Funeral

You can se t ou t i n y ou r Wi l l h ow y ou
would l ik e you r Fune ra l co n d u ct e d .


Funeral

You can se t ou t i n y ou r Wi l l h ow y ou
would l ik e you r Fune ra l co n d u ct e d .

These w i she s a re n ot l e g a l l y b i n di n g ,
howeve r i n m o s t c a s e s y o u r w i s h e s
would b e ob se r ve d b y y ou r Ex e cu t or s ,
i f po ssi b l e


Death


Death

Bu r i a l


Death

Bu r i a l
or Cremation ...

Death
C rema t i o n


Proba t e


Proba t e

Af t er y ou r de a t h y ou r Ex ecu t or s w i l l
mak e an ap p l i ca t i on t o t h e C ou r t t o b e
g rant e d t he r i g h t t o ma n a g e y ou r
e st a t e


Proba t e

Af t er y ou r de a t h y ou r Ex ecu t or s w i l l
mak e an ap p l i ca t i on t o t h e C ou r t t o b e
g rant e d t he r i g h t t o ma n a g e y ou r
e st a t e

Declarations will have to be made to
t he Tax au t h or i t i e s a b ou t y ou r e st a t e
a n d arra ng e me n t s se t i n p l a ce t o de a l
w it h a n y Ta x l i a bi l i t y

Proba t e
A G r ant of P rob a t e i s i ssu e d b y t h e
Court, to aut h o r i s e y o u r E x e c u t o r s t o
deal wit h y ou r a sse t s a n d ma k e
distributions


Intestacy


Intestacy

If y ou die wi t h ou t a Wi l l t h e R u l e s of
Intestacy will apply


Intestacy

If y ou die wi t h ou t a Wi l l t h e R u l e s of
Intestacy will apply

These Rules provide as follows....


Intestacy


Intestacy

( a ) T he ho useh o l d c o n t en ts a n d ca r s P l u s


Intestacy

(b)T he firs t £ 4 5 0 , 0 0 0 o f y o u r e s t a t e P l u s


Intestacy

Yo u r S p o u s e g e t s



Intestacy



(c) Half of a n y e x ce ss ove r £ 4 5 0 , 0 0 0


Intestacy



(c) Half of a n y e x ce ss ove r £ 4 5 0 , 0 0 0
a nd y o u r o t h er rel a t i v e s g e t . . . . .

Intestacy
Your p aren t s or ( i n non e a l i ve ) y ou r
b ro t h e r s o r s i s t e r s g e t


Intestacy

Th e b alance of t h e h a l f of a n y e x ce ss ove r
£450,000


Intestacy

Th e b alance of t h e h a l f of a n y e x ce ss ove r
£450,000

If y ou are ma r r i e d b u t ha ve n o ch i l dre n or
p aren t s or b rot h e r s or si st e r s y ou r Sp ou se
gets everything


Intestacy
If y ou are Si n g l e , Wi dow e d or
Divorced


Intestacy
Divorced
Every t hi ng g oe s t o y ou r ch i l dre n ( i f a n y )
ot herwi se t o y ou r p a re n t s ( i f a l i ve )
ot h erwise t o y ou r b rot he r s or si st e r s ( i f
a li ve ) ot he r w i se y ou r g r a n dp a re n t s ( i f
a live ) ot h erw i se t o y ou r a u n t or u n cl e s ( or
t heir chi l dre n ) a n d if n on e of t h e se a re
a live t he n i t a l l goe s t o t h e Tre a s u r y


Intestacy
Divorced
Every t hi ng g oe s t o y ou r ch i l dre n ( i f a n y )
ot herwi se t o y ou r p a re n t s ( i f a l i ve )
ot h erwise t o y ou r b rot he r s or si st e r s ( i f
a li ve ) ot he r w i se y ou r g r a n dp a re n t s ( i f
a live ) ot h erw i se t o y ou r a u n t or u n cl e s ( or
t heir chi l dre n ) a n d if n on e of t h e se a re
a live t he n i t a l l goe s t o t h e Tre a s u r y

These are the Rules as at January 2011

C on c l us i o n


C on c l us i o n

It will be seen that it is important to
consi de r ma k i n g a Wi l l


C on c l us i o n

It will be seen that it is important to
consi de r ma k i n g a Wi l l

As Lawy e rs w i t h w i de e x p e r i e n ce of
such matters we can advise and assist
you to make suitable arrangements


Wha t el se c a n w e o ffe r ?



P erhap s a
new
a ppro ach to
the way
Wills are
created.



P erhap s a
new A Sp eci al
a ppro ach to Wa y t o
the way l ea ve y ou r
Wills are money
created.



P erhap s a
new A Sp eci al
a ppro ach to Wa y t o
the way l ea ve y ou r
Wills are money
created.

We l c o m e t o . . . . .

Incentive Trusts


Incentive Trusts

A good way to leave your money is to
p ro v i d e I n c e n t i v e s f o r B e n e f i c i a r i e s

Introduction


Introduction
If leave i t w i se l y t he w e a l t h w i l l b e
spent wisely


Introduction
If leave i t w i se l y t he w e a l t h w i l l b e
spent wisely

A way to share the
Wisdom of your Wealth
a n d t he
We a l t h o f y o u r Wi s d o m


Mak in g a w e l l con si de re d Wi l l ca n
p ro v i d e a c h a n c e t o s e t I n c e n t i v e s t o
G u i d e a n d I n s p i re y o u r B e n e f i c i a r i e s

Incentives


Incentives
W hen we alt h y p e o p l e l ea v e m o n e y t h e y
a re con cer ne d a b ou t t e h e ff e ct t h a t t h e
weal t h w i ll h a v e o n t h e i r ch i l d re n


Incentives
W hen we alt h y p e o p l e l ea v e m o n e y t h e y
a re con cer ne d a b ou t t e h e ff e ct t h a t t h e
weal t h w i ll h a v e o n t h e i r ch i l d re n

In order to ensure that good use is
made of the Inheritance arrangements
are made t o e n su re t h a t t h e
Benefi cia r i e s p rove w ort h y of t h e
Inheritance

Incentives

They do t h i s b y se t t i n g u p In ce n t i ve
Trusts


Incentives

They do t h i s b y se t t i n g u p In ce n t i ve
Trusts

Lets see what Incentives can achieve...


Introduction
A financial expression of your family
values


Introduction
A financial expression of your family
values

A way to share the
Wisdom of your Wealth
and the
We a l t h o f y o u r Wi s d o m


W h y I n c en t i ves ?


W h y I n c en t i ves ?

To
Encourage
Inspire
Stimulate
Motivate


W h a t i s a Tru s t



G enerall y t ru st s i n re cen t t i me s h a ve
b een comp l i ca t e d b y t h e i r u se i n
a v o i d i n g Ta x


A t rust i s a si mp l e ve h i cl e w h e re b y y ou
ent rust ot h e r s t o ow n ma n a g e y ou r
assets eit h er d u ri n g l i fe o r a ft e r d e a t h



A t rust i s a si mp l e ve h i cl e w h e re b y y ou
ent rust ot h e r s t o ow n ma n a g e y ou r
assets eit h er d u ri n g l i fe o r a ft e r d e a t h

If you choose Trustees wisely and
creat e t he Tru st w i t h care , i t ca n l e a ve
an end u r in g a n d v a l u a b l e l e g a cy


Letter of Wishes


Letter of Wishes

Letters of Wishes are an informal way
t o p ro v i d e

Co nd i t i o n a l B eq u e s t s


Co nd i t i o n a l B eq u e s t s

Instead of Incentive Trusts can simply
l eav e a c on d i t i o n a l g i ft

Enforceability


Enforceability

Incent ive s h a ve t h e i r ow n e n f orce me n t ,
N o re w a rd i f t a s k n o t d o n e

Implementation


Implementation

Choose s u it a bl e pe op l e t o i m p l e m e n t

Incentives
If mak e a w i l l i n t h i s ma n n e r y ou a re
t a k i n g p a r t i n a p ro c e s s , a p ro c e s s t h a t
Is creative and interesting as much as it
i s so und and o f p r a c t i c a l a n d p ro f o u n d
value.
It is foundational in many ways.
A process to make a family think and
re al ise w hat i s i m p o r t a nt . T h e y d o t h i s
b y s e t t i n g u p I n c e n t i v e Tru s t s


The Process


The Process

There is sy n e rg y a n d crea t i vi t y i n t h e
p roce ss of cre a t i ng a Wi l l w i t h
Incentives

Business Succession


Business Succession
At time of making the Will can discuss
the strategy for any businesses


Business Succession
At time of making the Will can discuss
the strategy for any businesses

Such consi de r a t i on ma y p rove u se f u l i n
p l a n n i n g s t r a t e g y, d u r i n g l i f e a n d d e a t h


Ta xa t i o n


Ta xa t i o n

We c a n c o n s i d e r w i t h y o u t h e Ta x
i mpli c at i on s o f y o u r d e ci s i o n s

IHT Forms


IHT Forms

Fill out IHT forms at time of making
Will so get a chance to assess the likely
Ta x a n d t h en rev i e w l a t e r

The Incentives


The Incentives

Here fol l ow s a l i st o f I n ce n t i v e s


Po ssi bl e I n cen t iv e s


•To obta in a d e g re e f ro m a c h o i c e o f s e t
subjects


subjects
• To wor k f o r a C h a ri t y fo r a s e t p e r i o d


subjects

• To le arn a l a n g u a g e, w r i t t e n a n d
spoken


subjects

• To le arn a l a n g u a g e, w r i t t e n a n d
spoken

• To l e a rn a M u s i ca l I n s t ru m e n t



• To ma i n t a i n a c e rt a i n ca r b o n fo o t p r i n t



• To v i s i t I n d ia




• To Vi s i t E a s t Afr i c a




• To Vi s i t E a s t Afr i c a

• To re a d a l i s t o f ch o s e n b o o k s



• To h a v e j o i n t f a m i l y v a c a t i o n s




• To take par t i n c u l t u r a l a c t i v i t i e s a n d
societies




societies

• To l ea rn t h e f a m i l y fa i t h




societies

• To l ea rn t h e f a m i l y fa i t h

• To l e a rn a b o u t a l l m a j o r fa i t h s


• To ca rry ou t re se a rch in t o ch ose n
subjects


subjects

• To l e a rn t o d a n c e


subjects


• To t a k e e l o que n c e l e s s o n s


subjects


• To t a k e e l o que n c e l e s s o n s

• an d so on . . . w h a t e ve r y ou t h i n k , t h e
p ossib i l it i e s a re on ly l i mi t e d n y ou r
i m ag ina t i on a n d g o o d s e n s e


In Amer ica t h e g oal s are a l i t t l e more
serious such as ...



serious such as ...
To ma t ch t h e B e n e fi c i a r i e s y e a r l y
i n c o me



serious such as ...
i n c o me

Rewa rd f or e v e r y y e a r o f s t a y i n g
married



serious such as ...
i n c o me

Rewa rd f or e v e r y y e a r o f s t a y i n g
married

Rew ard for w o m e n t o s t a y a t h o m e a n d
lo ok a f t e r t h e c hi l d re n


And on the deterrent side to restrict
p a y m e n t i f d ru g s t e s t s a re f a i l e d



And on the deterrent side to restrict
p a y m e n t i f d ru g s t e s t s a re f a i l e d

The sub ject of In ce n t i ve s i n Ame r i ca
form s par t o f a separ a t e p re s e n t a t i o n



• an d so on . . . w h a t e ve r y ou t h i n k , t h e
p ossib i l it i e s a re on l y l i mi t e d b y ou r
i m ag ina t i on a n d g o o d s e n s e

I n c en t i ves


I n c en t i ves

• And if the Beneficiary does not carry
out the task , then the money goes to
C h a ri t y.


I n c en t i ves

• And if the Beneficiary does not carry
out the task , then the money goes to
C h a ri t y.

• And if the Beneficiary does carry out
t h e t a s k , t h e n a g re a t e r a m o u n t g o e s t o
C h a ri t y


Incentives
Th e Ince n t ive s a re onl y l imi t e d b y ou r
imag i n at i o n a n d ou r g o o d s e n s e


Lawyers


Lawyers

As lawyers this is good clean work


Lawyers


The fees are paid on delivery so assists
cash flow


Lawyers


cash flow
F e w e r p re s s u re s o r d e a d l i n e s


Lawyers


cash flow
The work is capable of being delegated
a n d supe r vi se d


Lawyers

It is easy to start


Lawyers

It is easy to start

Good Marketing will bring forth clients


Lawyers

It is easy to start




Lawyers

It is easy to start


The advantages are numerous and set
out separately


Lawyers
In essence this work will


Lawyers

Attract New Clients


Lawyers

Attract New Clients

Attract Better Clients


Lawyers

Attract New Clients

Attract Better Clients

Impress existing Clients


Wills Extras


Wills Extras
Pi ctu re s at t i m e o f s i g ni n g Wi l l a n d
k e p t w i t h t h e Wi l l


Wills Extras

Pict ures o f B e n e f i c i a r i e s a n d E x e c u t o r s
a n d Tru st e e s


Wills Extras

Pict ures o f B e n e f i c i a r i e s a n d E x e c u t o r s
a n d Tru st e e s

Sp ecially de si g n e d Wi l l s f ol de r f or t h e
client


C on c l us i o n

Where the re i s a Wi l l , t h e re a re m a n y
w a ys, f or t h e w i l l i n g


C on c l us i o n


Yo u r w e a l t h c a n m a k e y o u r l o v e d o n e s
Wo r k , R e s t , P l a y


C on c l us i o n


Yo u r w e a l t h c a n m a k e y o u r l o v e d o n e s
Wo r k , R e s t , P l a y

a nd D a nc e t o so me o f y o u r t u n e s

A New Approach


A New Approach

It s not just In ce n t i ve s b u t a w h ol e
di ffere n t a p p roa ch t o h ow Wi l l s a re
n or ma l l y ma de

C h a l l eng e s


C h a l l eng e s

A sep ar at e p re se n t at i on de a l s w i t h
ob ject ion s a n d ch a l l e n g e s t o t h e
Incentives

O ff s h o re


O ff s h o re

The adva nt a g e s a n d di sa dva n t a g e s of
offshore arrangements


O ff s h o re


A separate presentation


O ff s h o re


A separate presentation

a nd D a nc e t o so me o f y o u r t u n e s

WILLS AND INCENTIVES

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WILLS AND INCENTIVES