real_%26_personal_-_autumn_2012

It's a sad fact that nearly half of all

marriages end in divorce, leaving many

couples to fight over the spoils of their

failed relationship.

Stone King specialises in helping divorcing

and separating couples reach agreement

on their financial and practical matters,

often without lawyers in the room. But

there may be times when you also need

specialist advice from one of our

experienced divorce solicitors.

If you are considering splitting up we

will explain what separation entails so

you can decide whether it is the best

approach for you. And if your relationship

has broken down irretrievably we will

help you establish grounds for divorce

and advise you on how to protect your

financial interests and those of

your family.

The issue of pensions, for example, can

be complicated and often requires expert

advice. For example, should you divide

the cash equivalent transfer value of the

Contents

Personal Affairs News Autumn – 2012

real & personal

1-2 Protecting your wealth when

relationships fail

3 Who will inherit your wealth?

4 Losing mental capacity

and managing overseas assets

Protecting your wealthwhen relationships failReaching agreement on financial

matters can be difficult when a

relationship breaks down. Sometimes

you need expert legal advice to

safeguard your assets, says Stone King's

John Brownrigg.

�

pension equally? Is it wise to offset the

value of the pension for a greater stake

in the family home? Or should you share

the income from the pension pot equally,

taking into account different life

expectancies?

When deciding this, should you look at:

• the whole pension pot?

• the value of the pension pot built up

during cohabitation and marriage?

• or the value of the pension pot built

up during the marriage only?

When it comes to family capital, you

should establish whether there is

enough money to provide a suitable

home for the children and the parent they

live with and, if there's enough money,

another property where the children can

stay during contact visits with the other

parent. You need to establish the value of

your assets and how big a mortgage

each of you are able to pay. Only then can

you know if there's enough money to buy

more than one property.

You should also seek advice on whether

you can protect money from an

inheritance or, if you are a beneficiary

of a trust fund, whether that asset has to

be taken into account. Similarly, you will

need advice about any family business or

farm, particularly in establishing whether

its value can be released and how.

It is common knowledge that a parent

looking after a child can apply for

maintenance and look to the Child

Support Agency to enforce payments.

But a spouse also has a claim for

maintenance where there is a substantial

difference in earning capacity or actual

income.

Sometimes you can offset your

maintenance claim against receiving

a greater capital lump sum. But you

should be cautious about doing this if

you have young children.

At Stone King we have five solicitors who

specialise in divorce law and three highly

trained mediators, all of whom have

helped many parents work together to

find their own solutions to the problems

they face. Mediation can be quicker,

cheaper and often offers longer lasting

solutions for you and your family.

For more information about Stone

King's specialist family law services

please contact

John Brownrigg on 01225 324441

www.stoneking.co.uk

Protecting your wealth when relationships fail (continued)

�

However, dying without a will – or

‘intestate’ to use the legal jargon – may

have undesirable results. The surviving

spouse or civil partner may end up sharing

the family estate with distant relatives who

are already well provided for.

Things can be even worse for unmarried

cohabitees who have no automatic right to

inherit their deceased partner’s assets if

they die without a will. A recent ruling, in

which the cohabiting partner of a deceased

man was bypassed for the inheritance of a

£750,000 estate in favour of their three-

year-old son, highlights the problem.

The Law Commission is proposing major

reform of our intestacy rules which would

give cohabitees similar rights to those

enjoyed by married couples. But it could be

some time before we see the law changed.

At the moment when someone dies

intestate their assets are distributed

according to antiquated rules dating back

to the 1950s. Where there are children,

the surviving spouse receives a legacy

of £250,000 and a life interest in half of

everything that is left over. The children

receive the other half.

Where the deceased

has no children the surviving

spouse gets a statutory legacy of £450,000

and half of what is left. The other half

passes to the remaining relatives, with

parents coming first in order of priority,

followed by brothers and sisters and then

their children.

If the intestate is married and is in the

unusual case of having no children,

parents, siblings, nieces, nephews or

grandparents, the spouse gets everything.

Property is often the biggest asset and the

cause of many a family dispute. If the

matrimonial home is in the deceased’s

sole name, or the deceased owns a share

as tenant in common, the home may have

to be sold to satisfy the claims of other

family members.

This can be a particular problem in places

like Bath where property prices are high

and many homes are worth more than the

spouse’s statutory legacy.

The taxman may also grab a large chunk

of the children’s share of the family fortune.

This is because inheritance tax may be due

if the value of the estate passing to

beneficiaries other than the surviving

spouse exceeds £325,000.

Where the deceased is not married the

whole of the estate goes to the children,

which is bad news for the cohabiting

partner. However, you may not want your

children to receive a large inheritance

until they are mature enough to handle

the responsibility.

By making a will you can address all these

issues and distribute your estate in the

most appropriate and tax-efficient way.

Not making your wishes known can only

add to the upset experienced by the loved

ones you leave behind.

At Stone King we have extensive experience

of drafting all types of wills, providing

greater certainty and clarity for our clients

and their families.

For more information about Stone King’s

specialist Trusts & Estates team,

please contact

Charles Hayward on 01225 324404 or by

email [email protected]

Who will inherit your wealth?Nearly 30 million adults in

this country don’t have a will.

The figure is staggering but

perhaps not altogether

surprising given that no one

likes to confront their

own mortality.

Real and Personal deals with some current legal topics. It should not be used as an alternative to specific legal advice on the individual circumstances of a particular problem.

www.stoneking.co.ukBath � London � Cambridge � Melksham

Stone King LLP - registered limited liability partnership no OC315280, registered office 13 Queen Square, Bath BA1 2HJ T: 01225 337599

© Stone King LLP 2012 08/2012

A growing number of us are buying homes

abroad despite the downturn. Perhaps you

are in the fortunate position of owning

foreign property or aspire to have your own

place in the sun, or maybe you are a foreign

national with property in England.

But what would happen to those assets

if you lose mental capacity gradually

following an illness, or suddenly following

an accident. Would someone acting on your

behalf be able to manage or recover your

property from another country?

Unfortunately, there is no simple answer.

Each country has its own law governing

mental capacity and so it depends in which

country your property is situated as to

which set of rules prevails. Getting the

right advice can be crucial.

In England, for example, an individual can

execute a ‘Lasting Power of Attorney’ (LPA)

which gives someone appointed by you the

authority to make decisions about your

assets and/or wellbeing when you are no

longer able to do so. You can only make an

LPA if you have the mental capacity to do

so. English LPAs are not automatically

recognised by other jurisdictions and often

you will need expert help to smooth the

process. For example, you may struggle

to convince a notaire in rural France to

recognise an English LPA without the

help of an English solicitor.

If you do not have an LPA, the person trying

to manage your affairs may be forced to

argue your case in a foreign court (which

will be very difficult, costly and time

consuming) or even wait until the owner

of the asset dies and then try to secure the

asset through the local probate process.

This may be even more difficult because

the laws of succession (who gets what

when you die) differs in different

jurisdictions, which means the people you

wish to benefit from your estate may not

do so, even if you have a will.

Foreign equivalents to an LPA are not

always recognised in England – it is

important that foreign nationals with

UK assets make an English LPA to

avoid doubt.

Stone King has significant experience and

expertise in helping recover foreign assets

and dealing with the affairs of people who

lack capacity and can help:

• By providing practical solutions and

liaising with foreign counter-parts.

• By helping your English LPA be

recognised abroad.

• With the process of drawing up a foreign

LPA – such as a French Mandat de

Protection Future.

• By guiding you through your options if

you wish to use a foreign LPA to manage

English property.

• By helping you make an English LPA to

deal with your UK assets.

Stone King can also advise you on

international family, succession, property

and estate planning matters.

For more information please contact

Dan Harris on 01225 326761

www.stoneking.co.uk

Losing mental capacity and managing overseas assets