HAS THE ECONOMIC MELTDOWN AFFECTED YOUR WILL?

Much (probably too much) has been written about the effects of the recession with which we are faced.

The credit crunch is affecting the availability of credit to both businesses and personal customers and with the lack of available finance businesses are closing their doors.  Interest rates are at their lowest on record, property prices have fallen considerably and stock market values have taken a similar hammering.  Many people, particularly those who are retired and are dependent upon their savings income, are finding that they are eroding their capital to maintain their lifestyle.

Very little has been written about how this may impact upon Wills which may have been written in healthier economic times but which now may have become out of date and be in need of updating.

It is not uncommon for parents to leave a property or shareholdings to one child and to leave other assets (such as savings) to another child or children to balance the distribution between them.  Further business interests may be left to a child who is involved in a family business and other assets of a similar value may be left to another child to balance the equality.  In recent times the value of the property, the shareholdings, the business or the savings may have been affected considerably and the proposed equality between the children may now be out of line.  An example as to the possible effects is shown at the foot of this article.

It is important that anyone with a Will who has not updated it recently should consider reviewing it and, if need be, change it to reflect their current financial position.

It is recommended that anyone who finds themself in this position should arrange to see their solicitor to review the Will.  A solicitor is best placed to provide advice as to any amendments that may be needed and can offer advice as to possible ways to mitigate any potential exposure to Inheritance Tax.  In the current economic climate it is particularly important to reduce any potential tax exposure.

For those who do not already have a Will now would be a good time to consider making one particularly  bearing in mind that changes were made to the Intestacy Rules (which apply when there is no valid Will) effective from 1 February 2009 and the Law Commission is currently reviewing the rules with a view to recommending further changes.

Example:

Mr and Mrs A are retired and made Wills in July 2007.  They have a son (S) who has left the family home and a daughter (D) who lives permanently with them.  At the time in their Wills on the survivor’s death they leave their home worth £400,000 to D and cash savings of a similar value to S.  Their home is now worth £300,000 but their savings are still worth £400,000 as their pension income maintains their lifestyle.  The son would now benefit £100,000 more than the daughter.  They may wish to review their Wills to balance this inequality.

Greg Baker is a Partner and Head of the Trusts and Probate Department of Hegarty LLP Solicitors and is a member of the Law Society Probate Section Executive Committee.

CRIMINAL TEAM AT HEGARTY SOLICITORS AMONG THE BEST IN THE COUNTRY

Hegarty Solicitors Crime department achieves Excellence (1) Peer Rating

Crime Solicitors at Hegarty LLP are among the country’s finest as they have been awarded an Excellence (1) rating in an independent report (the Peer Review) – only 2% of the country’s law firms’ criminal departments can boast this achievement.

Associate at Hegarty Solicitors and Head of Crime, Sarah Acres, comments “I am extremely proud of my team. We work very hard on behalf of our clients and I am delighted to have received external recognition for our efforts, especially as only a few firms in the country have achieved the highest score.”

Senior Partner, Richard Hegarty said: “I am delighted that our Crime team has received the recognition they deserve. This is a significant achievement for Hegarty LLP and further cements the firm as a leader in the provision of quality legal services for all.”

Picture shows some of the team of the Criminal department at Hegarty Solicitors from left to right:- Sam Cornforth, Rachel Davis, Sarah Acres and Sara Young

GREG BAKER ELECTED ONTO EXECUTIVE COMMITTEE OF PROBATE SECTION OF LAW SOCIETY

The Law Society Probate section was established in 1997 to provide best practice information and support to professionals working in the area of wills, financial planning, Court of Protection and estate administration. Greg Baker, Partner at Hegarty Solicitors and Head of the Wills, Trust & Probate department, who was elected onto the Executive Committee of this section in July, is the only Executive Committee member in the Peterborough & Stamford region.

By sitting on the Committee, Greg will be aware of potential developments that affect practising within this area of law and will have the opportunity to have some influence over its direction. He comments: “My motives for joining the Probate section Executive Committee are varied. I should like to be involved in considering the effects of the changes which are taking place in the legal profession following the Clementi review of legal services, and particularly how they affect probate work. I hold a firm opinion that it is in the interests of the public for will writing to be properly regulated”.

ANNUAL PROPERTY EVENT GOES WITH A BANG!

The annual “Bangers & Beer” event hosted by Hegarty Solicitors for property agents and businesses in the Peterborough area was a very successful evening. This year’s event which took place on Wednesday 12th November at The Brewery Tap in Peterborough attracted almost 80 of the most influential contacts in the local property market to network, talk shop and enjoy the local ales.

Hugh Nicholls, Partner and Head of Property at Hegarty Solicitors, commented “I was delighted to see so many familiar faces this year. These are difficult times and I hope it raised everybody’s spirits. It is more important than ever to keep in contact.”

Picture is of Richard Hegarty, Senior Partner Hegarty LLP Solicitors, serving up bangers & mash to John Wilkinson (Accent & Wilkinson) & Paul Bywater (Larkfleet Homes).

COMPANY LAW DEPARTMENT APPOINTS NEW TEAM MEMBER

Hegarty LLP Solicitors in Peterborough has strengthened its Company Law team with the appointment of Jemma Carpenter as a Company Support Executive. Jemma will provide company secretarial services for small and medium size companies and will help the team with its business acquisitions and disposals work.

Partner and Head of Company Law, Andrew Heeler comments “For private limited companies the post of Company Secretary is no longer mandatory and yet most of the functions that role would fulfil still need to be met; hence some company directors may find it more cost effective and time efficient to instruct a specialist provider. It seemed a natural extension of our existing service to offer Company Secretarial services and these are managed by Jemma”.

The services offered range from one off filing requirements such as annual returns to a full compliance service.

On the firm’s business acquisitions and disposals work Andrew says “Our team is very busy acting on a number of share and asset sales and purchases for businesses and Jemma will provide invaluable support to the company team and its clients."

GOVERNMENT'S STAMP DUTY ANNOUNCEMENT GOOD NEWS FOR HOMEBUYERS

The Government’s announcement on 2nd September that the stamp duty land tax threshold will increase from £125,000 to £175,000 is a really positive step for the residential housing market, claims Hegarty LLP Solicitors.

Buying an average home (currently £149,879 in the North rising to £371,983 in Greater London*) will now be more affordable and people trying to sell their properties in the £125,000 - £175,000 bracket should find it less of a struggle. Partner and Head of Property, Hugh Nicholls, comments: “This move should make it easier for first time buyers to buy property. The market has stalled on rumours of a change to stamp duty land tax and the increased certainty should help to get it moving again. It is a shame that the reduction is only for 1 year from tomorrow but it is always open to the government to make the increase in the threshold permanent if it has the desired effect.”

Further support for the beleaguered housing market comes in the form of helping first time buyers onto the ladder via the Government’s new shared equity scheme, or a free 5 year loan up to 30% of the property’s value where the households’ income is below £60,000. “In the current economic climate first time buyers are struggling to obtain mortgages. This is the government’s way of making housing more accessible to all and will hopefully boost the property market, at least in the short term” states Hugh Nicholls.

*Source BBC online UK House Prices 27/08/08

PROMOTIONS AT LEADING PETERBOROUGH LAW FIRM

Leading Peterborough law firm, Hegarty LLP, has announced the promotion of two solicitors to the position of associate. 

Vicki Chilton joined the firm in 2004 and advises on a wide range of commercial property work including sales and acquisitions of freehold premises and all aspects of landlord and tenant matters.  She represents a number of private developers with sites between two and twenty plots and is involved in land acquisition, planning and setting up the site for sales.  Vicki also acts for investor purchasers and advises on their property portfolios in excess of 60 residential and commercial properties

Andrew Hornsby handles primarily substantial commercial litigation matters, but also advises on personal injury and negligence issues. He joined the firm in May 2006.  He attended Kings School in Peterborough, then studied law at De Montfort University and qualified as a solicitor in 1996.  He is a member of many organisations including the Society of Computers and the Law, The College of Personal Injury Law and Association of Personal Injury Lawyers.  Andrew is currently completing his training as a commercial mediator.

Commenting on the announcement, Partner Matthew Sidebottom, said “The promotions reflect the hard work and commitment of Vicki and Andrew.  I am confident that their legal careers will continue to flourish at the firm.”

CHAMBER TALK A SUCCESS

The first networking event of year organised by Stamford Chamber of Trade and Commerce was a great success, attracting over 30 members of the local business community.

Members of Stamford Chamber of Trade and Commerce

The event was held at Lady Anne’s Hotel, and included a talk by solicitor Andrew Hornsby from Hegarty LLP Solicitors on the potential dangers of e-commerce.  In his presentation he highlighted some issues concerning emails, websites and e-commerce, and explained how businesses can take steps to protect their interests.

President of the Chamber, Tim Lee, commented, “We were delighted that so many members were able to support this event.  Email, websites and e-commerce give smaller companies fantastic opportunities to work more efficiently and have access to a bigger market but there can be pitfalls.  Andrew’s talk was very interesting and he passed on some tips which I’m sure we all found useful.”

Stamford Chamber of Trade and Commerce has almost a hundred members and has a schedule of events planned until the Autumn including a Budget Breakfast and a visit to Castle Cement.  Anyone interested in joining the Chamber or attending the events should contact Brian Montgomery, on 01664 474189 or email secretary@stamfordchamber.co.uk

Issued: 01.02.08

GREATER PETERBOROUGH'S BEST NEW BUSINESS IDEA 2008

Hegarty Solicitors are delighted to once again sponsor the Peterborough Enterprise Programme's annual competition to find hidden talent in Greater Peterborough.

The ‘Start Doing Something New Today’ competition is organised by the Peterborough Enterprise Programme and aims to find Greater Peterborough’s best new small business idea.

The winner will win a cash prize of £2,000, free mentoring from one of Peterborough Enterprise Programme’s business advisers and the support and advice of a panel of Peterborough’s leading business figures for a 12 month period.

The best new small business idea might be either:

• an idea for the establishment of a completely new business
• an idea for a new product or service from within an existing small business (with no more than five employees)
• a new business that has been trading for less than six months

The deadline for entries is 18 February and the winner will be announced at a special awards ceremony on 7 March 2008.  The competition is sponsored by Hegarty Solicitors, Athene Communications, HSBC bank, MacIntyre Hudson and the Peterborough Evening Telegraph.

For an entry form and full details about the competition please call Peterborough Enterprise Programme on 01733 426500 or email: businessidea2008@cambsenterprise.co.uk. 

Issued: 11.01.08

TWO NEW LAWYERS AT HEGARTY SOLICITORS

Peterborough law firm, Hegarty LLP, has recently welcomed two new lawyers, Kimberley Pender and Claire Baker, to the firm.

Photograph shows (left to right): Claire Baker, Andrew Heeler and Kimberley Pender

Kimberley Pender has been a fellow of the Institute of Legal Executives since 1997 but has worked in all areas of family law since 1990.  She specialises in divorce, separation, ancillary relief and the Children’s Act matters.  Kimberley has appeared on the BBC programme Newsnight to publicise the plight of parents being prevented from seeing their children, and regularly attends an advice surgery for the charity ‘Families Need Fathers’.

Kimberley said, “I’ve been helping at legal surgeries at local branches of Families Need Fathers for many years.  At the surgeries I can explain the options available to people if they want to separate from their partner or indeed they have separated focussing their concerns regarding the children first and foremost.”

“It’s great to be part of a large team, and I’m looking forward to developing my career at Hegarty LLP.”

Claire Baker originally trained as a nurse, but then decided upon a career change and undertook six years studying to become a solicitor.  She obtained a first in Law from Cambridge University.  After qualifying as a solicitor, she spent several years at a major law firm in Portsmouth before moving back to the Peterborough area.

Claire specialises in company law and has a great deal of expertise regarding smaller businesses.  Claire said, “Clients are often surprised to hear that I changed from nursing to law, but I feel it is a benefit that I’ve gained skills and experience in a different sector.“

“I think it’s important that a company solicitor does not only give legal advice, but can also provide practical assistance to clients to help them drive their businesses forward.  One of the hardest aspects of starting a business is when you lack the experience and knowledge of dealing with other businesses, especially with bigger players.  I can help a company to have the right terms & conditions to protect their business and put them in a stronger position for your business to succeed.”

Partner, and Head of the Company department, Andrew Heeler said, “I am delighted to welcome Claire and Kimberley to the firm.  Their experience and specialist legal knowledge in the fields of company and family law will be a valuable addition to Hegarty LLP.”

EMPLOYMENT TRIBUNALS INCREASE BY 15 PER CENT

Latest statistics from the Employment Tribunal Service released this month showed that the number of claims has increased by 15 per cent says Peterborough law firm Hegarty LLP.

The statistics relate to the period April 2006 to March 2007 and show that the number of cases brought before the tribunal has increased from 115,039 in 2005/6 to 132,577 in 2006/7.

Employment Partner Martin Bloom explained, “I think the 15 per cent increase should be regarded with some caution.  The increase is thought to be largely attributed is to a large number of local authority equal pay claims.”

“However, it still illustrates that many people are still deciding to bring a claim against their employers.  Organisations need to protect themselves by having in place written contacts and being fully up to date with the latest employment legislation.”

According to the statistics unfair dismissal is the most common reason for bringing a claim with the average compensation awarded by a tribunal in an unfair dismissal case being £7,974.

Age discrimination was one the major changes to employment law when it came into effect in October 2006. The report shows that there have been 972 age discrimination claims passed in that period.

Mr Bloom commented, “Complying with the age discrimination legislation meant a great deal of work for those involved in HR. I suspect that many HR professionals were concerned that there might be avalanche of age discrimination claims.  It remains to be seen if that is the case.”

“It should be remembered that as age discrimination came into force in October 2006, and the statistics are from April 06 to March 07, it only includes six months worth of age discrimination claims. I’m sure the number of age discrimination cases will be higher in next year’s statistics.”

Issued: 04/09/07

EASIER TO PROSECUTE COMPANIES FOR MANSLAUGHTER

A new piece of legislation passed this week could make it easier for organisations to be prosecuted for manslaughter.

The long awaited Corporate Manslaughter and Corporate Homicide Bill was passed on 25th July and is expected to come into effect from 6 April 2008.  Peterborough law firm Hegarty LLP Solicitors are alerting companies to take heed of this important new law.

Employment Partner Tim Thompson explained, “When we hear the phrase corporate manslaughter people often associate it with disasters such as the Paddington train crash in 1999 where 31 people were killed.  This law is also concerned with workers who are killed in the workplace.”

Latest statistics from the Health and Safety Commission suggest that the provisional figure for the number of workers fatally injured in 2006/07 is 241.  The construction sector has the highest total of fatal injuries and accounts for 31% of all fatal injuries to workers.

He continued, “Currently it is difficult to prosecute organisations for being responsible for causing death.  The law requires a specific person at the organisation to be identified as being grossly negligent, which is obviously very hard to prove, especially at larger organisations.  The new legislation no longer requires the identification of a single individual, director or senior manager before the prosecution of a company.”

It will be the company rather than directors who will be held liable for a breach of the duty of care by the firm. 

Mr Thompson commented, “Some people feel directors have almost been let off the hook.  They think that if directors are not liable then they may feel less committed to promoting a good safety culture at work.”

To convict a company the prosecution must prove that the failure came substantially from ‘senior management’.  Senior managers are defined as people who have a key role in the management of the whole or a substantial part of the organisation’s performance.

There was much debate about whether the new law could apply to the death of someone in custody resulting from gross negligence in the prison service or from those controlling police cells.  A clause has been included in the Bill so that this part may become operational at a later date.

The new law can impose unlimited fines and can order an organisation to take action to remedy their management failure that led to the death.  Also, it can impose a publicity order where the convicted organisation must publicise the details of its conviction and the amount of the fine.

“It should be stressed that the new law does not impose any new obligations on organisations. Those organisations that have a good safety record, and have the relevant procedures in place to comply with their health and safety obligations, should not be overly worried.  The new law is not meant to catch companies out, it’s aim is to protect people against organisations that recklessly ignore health and safety regulations,” said Mr Thompson. 

“I think it would be wise for all organisations to use the time before April 2008 as an opportunity to review their health and safety procedures, and make any necessary improvements.  Let’s hope that by this time next year we shall see an overall rise in safety standards in the workplace, and a reduction in the number of workers fatally injured.”

Issued: 27.07.07

NEW SOLICITOR JOINS HEGARTY LEGAL TEAM

The legal team at Hegarty Solicitors has been strengthened with the appointment of a new solicitor.

Litigation Solicitor Andrew Hornsby has joined the firm after 13 years with a Peterborough based firm of solicitors.

Andrew, who is based at the Stamford office, will deal primarily with substantial commercial litigation matters, but will also handle Inheritance Act Claims, personal injury and negligence issues.

Andrew commented, “I feel this is a superb opportunity to develop my career at a firm that has an excellent reputation locally.  My previous experience and understanding of the region will I hope be an asset to Hegarty Solicitors.”

Andrew attended Kings School in Peterborough, then studied law at De montfort University and qualified as a solicitor in 1996. 

He is a member of many organisations including the Law Society’s Personal Injury Panel, College of Personal Injury Law, Spinal Injuries Association and Association of Personal Injury Lawyers.

Andrew has been involved with a number of High Court matters that were reported in the legal press.  One of these cases is still the current precedent for the assessment of damages where the loss occurred overseas.

Away from work Andrew was until recently been appointed a governor of the Peterborough College of Adult Education.  He is also a keen cricketer and has recently taken up golf.

Partner Matthew Sidebottom, head of Litigation, said, “We are delighted that Andrew, who is already highly regarded locally, has decided to join Hegarty Solicitors. I am certain that with his enthusiasm, experience and specialist litigation knowledge he will make a valuable contribution to the firm.”

INHERITANCE TAX CONCERN OVER RECENT RULING

The ruling in a recent case is causing concern for many couples that have set up Nil-Rate Band Discretionary Trusts in their Wills to help minimise inheritance tax on their estate. Couples are being recommended to take professional legal advice to check whether their tax planning steps need to be modified in light of the case.

Inheritance tax is payable at 40 per cent on chargeable estates worth more than £300,000.  As property prices continue to rise, more estates are becoming liable so couples often look into tax-planning options to minimise inheritance tax.

In this case, Dr Phizackerley and his wife had bought their property as joint tenants in 1992 and later changed this to tenants in common so that they could each set up a discretionary trust under their Wills.  When the wife died in 2000, her share of the property, then valued at £150,000, was transferred to Dr Phizackerley subject to him owing £150,000 to the trust.

When Dr Phizackerley died two years later, H.M. Revenue & Customs claimed that the debt owing to the trustees was not a deduction in Dr Phizackerley’s estate thus increasing the tax bill by £60,000 (40 per cent of £150,000).

The Revenue disallowed the debt in Dr Phizackerley’s estate as they claimed that as Mrs Phizackerely had not worked or contributed to the purchase of the property her husband had ‘given’ her a share of the property.  The Revenue considered the arrangement was caught by an  anti avoidance provision.

The Special Commissioners, who handle disputes between the Revenue and taxpayers, found in favour of the Revenue.

Greg Baker, a partner at city firm Hegarty Solicitors, has received many enquiries from clients anxious that the ruling will threaten their tax planning measures. 

Mr Baker commented, “If you have already set up a Nil Rate Band Discretionary Trust in your Will and it is planned to use the debt arrangement then, if there has been a substantial gift to or from your spouse or civil partner, you should review your Wills to see if there are any revisions needed.”

“However, in our view where married couples or civil partners want to minimise the burden of Inheritance Tax and the major asset is the home it is likely that the creation of a Nil-Rate Band Discretionary Trust with a debt facility will remain the preferred option.  It is, however, important that the arrangements are both set up and administered correctly.”

“The ruling highlights that H.M. Revenue & Customs are actively targeting inheritance tax planning methods. When considering tax-planning, appropriate professional advice should always be sought and arrangements made should be reviewed regularly. The cost of a review may be a couple of hundred pounds, but could save your estate thousands.”

RECORD ATTENDANCE AT ANNUAL PLANNING CONFERENCE

Over 120 delegates recently attended the 5th annual planning conference organised jointly by Hegarty LLP Solicitors and John Martin & Associates at The Haycock in Wansford to hear two eminent speakers talk on issues relating to planning and the release of land for housing development.

Keith George, Divisional Planning Director of Persimmon Homes Plc, spoke on Planning Gain Supplement (PGS) a proposal for a fixed levy on the enhanced land value after it receives planning permission. He advised that it was the Government’s intention to move forward with this new land tax if, after further consultation, it continues to be deemed workable and effective and PGS will then come into force in 2009.  Mr George, who sits on various house building task forces and committees, said that the industry was moving firmly against the implementation of PGS and there was qualified support for an extended role of S106 Agreements

The second speaker was barrister Peter Goatley from No 5 Chambers in Birmingham, who spoke on the change in emphasis in planning for new housing arising from Planning Policy Statement 3 which will come into force on the 1 April 2007.  He said that there was much of interest within PPS3 and the emphasis was on “delivery”, in providing sufficient deliverable land, meeting housing need and demand and improving affordability.

Senior Partner Richard Hegarty from Hegarty Solicitors commented, “The PSG will have a major influence on the land supply available for development.  I think some landowners may decide to act very quickly before PSG comes into force to avoid paying, but many landowners who have thought about selling will simply keep their land and hope for a change in policy in the future.”