fbpx

The Money compass Podcast

Catch Up with our latest episodes
SpotifyApple Podcasts

The Bank of Mum and Dad with Louisa Bradberry

Jun 22, 2022 | Episodes, Personal Finance, Special Guest | 0 comments

This episode of The Money Compass podcast was published on 15th June 2022. You can listen again by heading to our Episodes page, or on your favourite podcast player.

In this Special Guest episode Emma is joined by Louisa Bradberry, senior associate at Ashtons Legal. She is here to discuss the hot topic of the Bank of Mum and Dad and the importance of Wills.

Louisa’s Key Points

  • How reliant are children or younger people on their parents?
  • Gifting money to your children to help them with a deposit and the possible advantages that come with loaning it to them instead.
  • The importance of having a will, the rules of intestacy and the way in which writing a supporting letter of wishes to go with it may be helpful. It’s much nicer in their own words and having their own personal reasons for leaving what they have in their will. A lot of people think what’s in their will is a secret, and nobody’s allowed to know anything about it until they have passed away. Perhaps it is much better if they’re quite open about it, and the way communication can help this process.

The Bank of Mum and Dad

Emma Knights
This morning, I’m joined by Louisa Bradbury, who is a senior associate at Ashtons Legal. Very nice to have you here today.

Louisa Bradberry
Hello. Nice to be here.

Emma Knights
Thank you very much. Louise is here today, and we’re going to talk a little bit about the Bank of Mum and Dad, which is in Julie’s book, the money compass on page 58, if you want to find that chapter and have a read. There’s lots of stories in there, but I’m sure Louisa is going to help us today and tell us a few stories about bits and pieces that she’s experienced some wills and probate information, hopefully as well.

Do you want to start Louisa and tell us a little bit about who you are and what it is you do?

Louisa Bradberry
Well, as you’ve said, I’m a senior associate at Ashtons legal. I’m currently based in the Norwich office, although we do have quite a mobile policy. I can work in any of our offices. I’m quite often seen in Diss and sometimes in Bury St. Edmunds as well. I live quite centrally to all three, so very easy for me to get to all of them. And we’ve also got office offices in Cambridge and Ipswich and Leeds haven’t yet been to the Leeds office, though. It’s no exactly just popped in the corner, is it? It’s a rather nice office for French law.

So, one of our extra little things that Ashtons can give that many firms can’t is we have French law team.

Emma Knights
Well, I’ve learned something new.

Louisa Bradberry
Yes. If you’ve got any clients who have, you know, French, or anybody listening has got any French legal requirements, they should get in contact, because not very many firms in the country do it. This is a good department as well.

Emma Knights
Fantastic.

Louisa Bradberry
I have been a solicitor since 2005. I’ve been qualified for nearly 18 years, or is it 17? My maths isn’t very good. I’ve mainly specialised in Private Client Law Lifetime Planning, as we call it, Ashtons, which is wills, probate, tax, and trusts.

Currently, I head up the Norwich department of Private Client Team Lifetime Planning. I do a lot of probate work, a lot of wills, drafting and advising on trusts as well. A little bit of everything, a little bit of editing, but sort of all within the same area.

I tend to do more tax and trusts than, say, Vulnerable Client Law, which is about the Care Act and things like that. There are two routes you can take with Private Client Law. And I think you tend to find people sit one on one side of the fence or the other. So I’ve gone slightly darker route of tax. Nobody really wants to do that. But no, we all need to know we all need to know about it.

Emma Knights
Definitely. And if we don’t know ourselves, we need an expert that does quite well as.

Louisa Bradberry
We were always told you can’t afford death and taxes. So certainly, the right environment to be in for that.

Emma Knights
Most definitely. What led you to be a solicitor? What made you take that path? That was a little chuckle!

Louisa Bradberry
No, no, it surprisingly wasn’t an accident. When I was quite young, my dad gave me some very salient career advice. He said be a lawyer, an accountant, or an undertaker, because all three of them stayed employed, regardless of the economic circumstances – there will always be work for you.

The irony is I don’t particularly like maths. If my maths teacher happened to be listening to this, he would probably laugh his head off. I’ve done anything to do with maths. I’ve sort of taken a little bit of everything and merge that into probate law. So yes, it’s kind of wasn’t when I was 18, I had a very different idea about I wanted, I wanted to go off and run a bar in Portugal.

Emma Knights
Slightly different.

Louisa Bradberry
Yeah, there’s a story behind that, but probably not one for the listeners.

Emma Knights
When you went back to law school to become a solicitor, did you go with the intention of this as the area that you wanted to specialise in?

Louisa Bradberry
No, not at all. Like everybody, I watched all the legal programs. I mean, I’m a teenager of the 90s so for any listeners that will remember the show This Life, which was based around young, newly qualified or trainee solicitors and barristers. That was probably the pre-18 reason why I wanted to be a lawyer. But no, I didn’t. You always see the glamorous corner office everybody kind of having a lovely party atmosphere and not doing a lot of work. And I would say that the reality of it is, there’s a lot of work to get there. And it is a constant job.

Emma Knights
It’s not one that you can just pick up and have a few days and disappear.

Louisa Bradberry
And I think it stays with you. Whether you’re at work or not, you know, in the back of your mind, you’re thinking about things.

You must expect that in a career in law, you can’t just think, oh, at five o’clock, the clock start, you know, the work clock time, tools down. You’ll wake up and think about things and you’ll suddenly be in the middle of Tesco’s or Sainsbury’s and go, I needed to do that. It’s a career, and I think it is a passion.

I didn’t choose to do Private Client instantly. I was very interested in it after I did my, I mean, when I did my degree. The degree is very academic, not much of what you learn on your degree actually transfers forward to the work you do as a practicing solicitor. Maybe it helps more as a barrister, because you’re more reliant on cases and you know, in statue, but certainly not for the area I’ve gone into.

I did enjoy private client when I studied in law school, which again, is ironic because it’s very maths based. And it was very focused on the tax. But when I embarked on the law school route, I did a law degree and then subsequently law school, I did want to do a real type of law, something that involves real people.

And I mean, I used to joke when I first qualified to do conveyancing and I always used to get questions about divorce, you know, in the pub to your lawyer on you. Do you do divorce? No, no, I don’t – I don’t know anything about it. I’ve never done any kind of family law, or anything like that. And now I get so do you sell houses?

Emma Knights
I think it’s such a broad area that people just assume that you must do it, because you’re a solicitor. That’s what solicitors do, they don’t realise the details behind it.

It’s interesting how you talk about how it’s a career. You said, ‘you never just go home at five o’clock.’ When I was introduced to being a Financial Adviser, I was always told, ‘it’s not a job. It’s not a career, it’s a lifestyle’, because it will be with you wherever you go. You will go on holiday and something will pop into your head, you’ll need to do something if a client calls and they want you. You need to be there to be able to deal with whatever it may be. It sounds like it is very similar.

Louisa Bradberry
Yes, very much so yes. What I find really amusing, and my husband finds more amusing than ID, is that I will get a message on Facebook out of the blue from somebody I haven’t seen for the best part of 15 years saying ‘you’re a legal, can I just pick your brain about…’ usually something completely unrelated to what I do. You know, it’ll be about a boundary dispute or divorce. I think the good thing is, and certainly working for a firm that has many separate areas and teams, I’ve always got a person I can refer to.

I’ve been asked about franchising law, which again, is quite unique, luckily Ashton’s has a big franchising team. I’ve been asked about disputes, you know, ‘oh, this person died and I want to challenge their will’, which is probably something that will come up as a course of this conversation, and always divorce employment. I’ve been given a settlement agreement, ‘what do I do with it?’ Yeah, so I’ve got colleagues that I can refer them to. I always welcome them. And I always get the ‘I’ll buy you a drink when I next see you’ which is going to probably be in 15 years.

Emma Knights
It has taken 15 years for them to reach out and contact you with a message. That’s going to be a while for the drink. But never mind.

Louisa Bradberry
Do people scroll through their Facebook friends and go ‘right, do I know anybody who can help with this?’ But this is same thing – I will ask my friends who are plumbers, ‘I’ve had this quote, does this sound right?’

Emma Knights
You want to know that it is someone that you can trust in, someone that you can rely on. When it’s a referral from someone that you know, you always feel more confident than just searching on Google.

Louisa Bradberry
I’d rather I’d rather they asked me who I recommend rather than they searched on Google and just found something, any old person. You know, getting decent professional advice is always the way forward the same as financial planning, I’m sure.

Emma Knights
Most definitely.

As I mentioned earlier, today, we’re looking at the Bank of Mum and Dad and wills, and basically about how reliant children or younger people may be on older, people now.

An example of this I can give you is my colleagues, obviously, quite a bit older than me. They’ve been in financial services for 30 years and in recent years, the last two or three years, we’ve been to see people and they’ve said ‘oh, we’re going to give a gift some money to our children to help them with a deposit for our house.’ My colleague, Ralph, gets quite irate about it. He says, ‘why are you giving them any money? When you were younger, nobody helped you’ All the normal stories that you would expect, and he gets really annoyed about it.

And it wasn’t until I went to look to buy a house, and shared some of the information with him about, well, this is the deposit I need, I’m not earning quite enough; I need to be earning more to be able to afford to do on my own. And he realised, oh, that’s why people are giving their children money, because their children can’t afford it!

So that’s why it’s good to speak to you today. Just to get your viewpoint on it as well, about how you’ve seen things change in recent years of gifts to people in lifetime and how wills maybe differ now to how they might have done previously. And the importance of it all, really.

So would you say, as you write wills and deal with probate all the time, would you say there’s been a change in the trend of what you’ve seen?

Louisa Bradberry
I would say that there are large percentage of parents particularly, and sometimes grandparents, sometimes aunts and uncles, but more commonly parents who are interested in their children having their inheritance early and being able to use it, so they can see their children benefit from it.

There are always several reasons behind that I think. I don’t think it is just purely, ‘I love my child so much, I want them to benefit’. I think there is a, you know, they think that they can mitigate Inheritance Tax, possibly avoid all their hard-earned money and assets being used to pay for care home fees, that sort of thing.

Put it like this, I think it’s a case of if you wanted to give £50,000, would you rather give it to your child or to HMRC – and not many people in my experience would like to see the taxman benefit.

Emma Knights
I don’t think anyone would be up there saying, ‘yeah, give it to HMRC’.

Louisa Bradberry
One of my colleagues did draft a will where somebody did leave money to HMRC. And no, I’m not joking. It is genuine.

It’s not someone I work with now, and it wasn’t while we were at this firm, we worked at a previous firm together. And yes, a beneficiary of a will she drafted was HMRC. I cannot remember the reason why this person chose to leave it to the taxman, but what I always wanted to know is they’re not a charity, would they be taxed?

Emma Knights
That’s a very good question.

Louisa Bradberry
That’s what I always wanted to know. I would imagine so. But I don’t think so. Well, they’re not spouse, and they’re not a charity. No. Amazing if they charge themselves inheritance, I’d love that. I would love that to happen, I might find it I might do some research and find it out or just ask her if she ever be easier.

Parents do want to help their children. And I think, you know, everything costs more these days, not just in the last few months with the rising heating costs, energy costs, fuel costs, all of the every day rising. If I use myself as an example, when my parents bought the house that I grew up in, they paid £30,000 pounds for that, or around £30,000 pounds. It wasn’t their first house, they may have had some equity. I think the first house they bought, which is in the outskirts, Norwich was £1000 in the 60s. In the 70s, the fact that the house prices have gone up to £30,000 pounds still in East Anglia, you know, it’s but now you’re looking at, you know, first or second houses could easily be in the region of £300,000 pounds.

I think I remember comparing it, having a conversation with my parents about whether they could lend me any money to buy a house or, you know, be the Bank of Mum and Dad, to which they said no.

I came out of university and law school as much in debt as the cost of their house. If I then apply that to my children, you know, my first mortgage was about £200,000, are my children going to be £200,000 in debt from university and a postgraduate course? So I can see why people want to stop their children getting into that form of debt. And, because the value of house prices or the value of property has not increased in the same level that the average earning potential has. Particularly after the subprime mortgage crash in 2007/2008.

People used to get over and above mortgages, they can’t get those anymore. I don’t know off the top of my head what the average earnings are, but let’s just say it’s £30,000 pounds is average wage for the country. You multiply that by four, that’s only £120,000 pounds, and I don’t know, anywhere in East Anglia where you could get a house for £120,000 pounds, not for a family. You might be able to get a very small flat or a very small house somewhere, probably where nobody wants to live. You know, I would think the average house prices in this area are around, you know, over £220,000 Something like that.

Emma Knights
There was something on the radio the other day further east of England excluding Kane Bridge and Essex, think the average house for a first-time purchase was £246,000 pounds. And it’s just unbelievable.

Louisa Bradberry
People need to be be earning £50,000 pounds a year, you know. And then that, despite what a lot of people will think, that is not average, not average at all. Certainly not in your mid 20s, post degree. Certain professions, and certain jobs, yes, people will be able to, or they’ll be entrepreneurs. But absolutely, that’s not normal.

Emma Knights
I think it is now designed that two people need to buy together to have the earning capability to be able to do it, if anybody’s looking on their own.

Louisa Bradberry
Absolutely. And that comes with all its own problems, particularly if you’re buying with a non-married partner or non-spouse. You know, you can have real difficulties with that, especially if you’re borrowing money from Mum and Dad. They might not feel so inclined to lend it to your boyfriend, girlfriend, significant other as they do, to give or to loan it to you as their child.

Emma Knights
It’s very interesting thing you say that, because I went to the bank of Mum and Dad, when I looked to buy my first house and the bank of Mum and Dad said, yes, we will help you. But there was a condition of we are not giving you this money, we’re loaning it to you, for that exact reason. I was looking to buy with my partner at the time, they obviously did the right thing, because it was my partner at the time, not anymore.

Their money was protected to make sure they got it back. And I think it is a risk of doing things in your lifetime and giving money as a gift that you no longer have the control over it. So doing things as a loan, to help other people out is a good way to do it, because you still retain the control over it and can have it back there.

Louisa Bradberry
Absolutely, there can be tax implications for loaning money, depending on the terms of the agreement and situations like that. And obviously from a protection and a control point of view, it is an option that parents can take, because it does mean that they get the money back. They haven’t lost it if their child’s relationship breaks down or even the child goes bankrupt, something like that. It’s not it’s not a gift. So, it is still within their control.

The interesting thing is that people nowadays will more happily commit to a 30-year mortgage than they will to commit to getting married or forming a civil partnership. I don’t know what that says about society or whether that’s a good or bad thing. Each to their own in my view.

But that is the very real risk is that when you borrow money from a parent, or from any other source, and you’re in a relationship – if it breaks down the parent is not protected.

Planning needs to go into it, there needs to be some thought. And it’s not just a case of, you know, I’ve got this £40,000, I inherited it from my parents, so I’m going to just give it to you. And, you know, it’ll all be hunky dory, and everybody will be happy. And it’ll be you know, moonbeams and flowers all the time. Life isn’t like that. Life’s really complicated and relationships, you know, can be 25 years long and still break down.

And then if there’s any element of this where the parents have given a gift they, or the loners, can feel quite upset. You would like to think, wouldn’t you, in that situation – well, I would like to think that if my Mum and Dad had had given me some money and if I bought a house with my husband before he was my husband, that my husband certainly wouldn’t want to walk away with that money because he’s a decent, fine, upstanding human.

However, I do know of situations, not my own personal ones, but of friends’ situations where exactly that happened. Mum and Dad inherited money, gave to an only child as a deposit for a house and their long term partner, a few years later, decided they weren’t interested anymore. And oh, well, it was gifted to me as well so we’ll be having half. When they did, everybody was angry.  And to be quite honest, there are I’ve seen many of those situations.

Emma Knights
And I think it’s when money is involved, you always think that things will be amicable and we can sort this out nicely. It’s the same as when somebody dies and there’s a will in place. The arguments that there can be, I’m sure you’ve experienced that many of times, the arguments there can be over the silliest little things.

Someone was telling me the other day that there was an argument and a dispute that ended up going to court and all sorts of things because somebody wanted a set of garden shears, and they couldn’t settle it between themselves and I just think, ‘why?’.

Louisa Bradberry
The mix of grief, death, guilt and money is a horrible one. I know, my colleagues hear me say this a lot, but I think that is the perfect storm. And I think it’s where parents need to be very, very careful when they’re drafting their wills or gifting money to one child because one child needs it more, how badly that can affect relationships.

I think people quite often talk about ‘oh, nobody told me there is no automatic right to inheritance in this country, you know, just because you’ve got children, it doesn’t mean that you must leave your money to them. So, you can choose to leave it all to the cat’s home, if you if you really want to. There are certain avenues that your children can go down to say that that is not right, but they are limited.

The situation with not treating your children equally is one of those which can really cause massive aggravation and upset and hurt feelings. And I think that, although I don’t deal with contentious probate – which is where somebody contests a will, I think that a lot of people that come in and want advice about that is because it’s the principle, well, it isn’t fair. It’s not, I didn’t get this or that, I think, you know, I’ve experienced that, again, in people that I know, personally, not just in clients, and it does feel very personal.

That’s why when I see clients, and they’re doing their wills, and they want to potentially not benefit one child, as much as the other, I ask why. And if there is a good reason for that, you know, we look at how we can maybe call it into account in the will. So that when all is said and done, and the estate is distributed, there is equality. But not all parents want to do that, you know, some have one child that is hugely, self-reliant and successful. And they may have another child that, for very many reasons, whether it’s health or other issues, that aren’t able to provide for themselves quite as well as child A, shall we say?

There are reasons why parents do want to do it unequally but again, the key to everything is getting good advice about it, it’s not just going ‘I can write this on a piece of paper, this is how it works’. You don’t know what you don’t know and that can be quite dangerous. Also where people are getting advice from non-specialists, or non-regulated people – and when I say regulated, I mean by the Solicitors Regulation Authority. Most reputable solicitors firms are regulated, there are institutions that will writers can belong to. There will be very many of those people that know a lot about what they’re doing. But there will also be people who start a business and go, oh, that’s great, I can pay a subscription fee once a year, get a stamp. And because I can write it down, and it makes sense on a piece of paper, when you then actually look at that post it and you see those wills and you think why would anybody have ever written this? This is hard, even if it seems simple.

So yeah, the key is getting some balanced advice that doesn’t just look at what you want to do but looks at that sort of 360 degrees of the advice all around it.  There are certain pitfalls that you can drop into quite easily, where people only know about writing a will, rather than actually dealing with the estate on the other side.

Emma Knights
If somebody were to come to you, and they want to do something a bit controversial, maybe leave one person out or whatever it may be. Is there anything specific that you would say to them that they need to do to make it more watertight? Other than obviously, that the legal part of the will? And you looking at it all the way around? Is there anything you would specifically say to them that they need to do as well?

Louisa Bradberry
What a lot of people don’t understand is that there are certain categories of people that can make a claim against your estate, on death, if they are not left reasonable Financial provision in your will. So that comes from the inheritance provision for Family and Dependents Act 1975. And there are certain categories of people that can bring a claim for reasonable financial provision, very broadly those are a spouse, funnily enough, and children, somebody who’s treated as a child, somebody who’s been financially dependent on you, and in some cases, an ex-spouse.

The level of financial provision that I suppose the court would deem reasonable is varied. You can’t sit in a meeting with somebody and say, this is what the court will say. If anybody does contest a will or make an inheritance tax claim, the matter would proceed on its own facts. So, it would be looked at who have you left, who else is left who you disadvantaging by doing that?

So, over the course of the last 10 years, there’s been a long running case where a mother did exactly that, she decided not to leave anything to her child, or she left him a small amount, I can’t remember the facts of it now. But she left a small amount, and the child said this isn’t fair. And it did make people a bit worried because the findings in that case, were found in favour of the child. But I think that was quite unusual.

A spouse is obviously going to have a higher level of reasonable financial provision than a child. And in fact, there is a different standard for a spouse that claims rather than a child. So I think if you’re trying to cut a child out, I would always ask what the reason is, is it because my child is really, super rich, they’re a millionaire, and they don’t need the money? Okay, so put that in your letter of wishes and say, you know, ‘Dear Bob, I didn’t leave you anything because, you’ve got more than enough, and it’s not going to make any difference.’ Or is it because you don’t see them? Is there a reason that you don’t see them? And what people must anticipate is that sometimes after making their will, where they’ve cut, you know, Jim out of their will, they will suddenly reform their relationship with Jim. And then they die before they can change their wills.

So, there are situations where you can write a letter of wishes that goes alongside your will, that basically says, why you’ve made this decision. But there is nothing you can specifically put in a will that says, I don’t leave anything to this child and that it eradicates their ability to be able to bring a claim. So, its statutory claim, whether they choose to bring it is a completely different thing.

Emma Knights
For some people, that would be well, they can’t afford to make a claim, or they think, oh, it’s not worth the hassle, or whatever it may be. So, I wouldn’t necessarily go anywhere, but they obviously still have the option.

Louisa Bradberry
Absolutely. And although, you know, the cases if they go fully to court and cost tens, if not hundreds of thousands of pounds. So obviously, as a claimant, you have to be very sure that A) you’ve got a strong case, and B) that there’s enough money to actually fund what’s going on, because the executives will be able to cover costs from the estate in most cases, because, particularly if they’re not beneficiaries of the estate, they shouldn’t be out of pocket.

So yes, I think to go back to the question, it’s a case of understanding from a client point of view and saying why they want to cut that person out and explaining to them that it might not be absolute. And it will depend on what that person does as a result. But I certainly think if it’s a case of where you’ve said, your child is adequately provided for, or talk to them and say, ‘look, I’ve left this all to your sister, because, you know, you don’t need it, I don’t want you to be upset’ you can also make sure that you leave them maybe personal items that so they’ve got something.

I think, as a disappointed beneficiary there’s nobody who you can ask about it. You can’t say to your mom if she’s just died, why did she do this? So, I always encourage my clients to write a letter of wishes, I don’t have to read it, it can be very personal.

I know, some solicitors will write quite a standard ‘I have taken consideration and I refuse, you know, I don’t want to give this person any money under my will’. But from my point of view, that letter could be evidence to the to the court.

Emma Knights
It’s much nicer for it to be in their own words and their own personal reasons. I do think that a lot of people think what’s in their will is a secret, and nobody’s allowed to know anything about it until they’re gone. I think it’s much better if they’re quite open about it. Obviously some things they might choose they don’t want to tell someone, I completely understand. But when it’s something that could upset people, I don’t think anybody wants to die knowing that they’re causing a problem. Most people are making a will to kind of tidy things up and make things easier for people, the last thing they’d want to do is make things worse.

Louisa Bradberry
I would agree, I think I think it is a little bit of a dirty word, almost, talking about money and inheritance. It’s not a dining room conversation, people don’t want to do it. I try to encourage clients to not be like that, and to talk about it. If they do something controversial, and they tell their child, they’ve done something controversial and the child kicks off at that point, they can still do something to sort it out. You know, the child could plead their case and say, ‘oh, no, this isn’t fair you gave my sister this or my brother this’ or whoever. But once you’re gone, they can’t do that. And they have no ability to ask the questions that they would have done had you told them during your lifetime. It’s about communication and being open.

But like you say, most people are not very confrontational, and they don’t want to have those conversations. I always try and elicit that from a client and say, ‘are you concerned about what they’ll say?’. I have had clients that say, I just, I just want them to be happy when I’m gone and it’s like, I don’t really think what you’re doing is going to make them happy. I can see how this is going to work as a probate. It’s hard. I mean, you can’t make somebody leave a gift in their will, that they don’t want to. I can only advise as to point out what the problems could be.

Exactly, it’s very difficult, and it’s very emotional, and every situation will be very, very different. And you do find that people do not necessarily inherit what they were expecting, or they’re sharing their inheritance with their children, for example, that they weren’t necessarily expecting to do so. And particularly if they were counting on that money to pay off a mortgage or just, you know, not have a pension, because they’re like, Mum and Dad are going to die, that leaves me with several hundred pounds, I can just save that to, you know, provide for myself later.

It’s a massive boiling pot of emotion. And it’s, it’s very difficult. As the solicitor sitting in the middle of that, you must, if you’ve done the will, you will know, the reasons behind it. And you can share those with the beneficiaries, if they haven’t been shared during the lifetime, if there’s a letter of wishes that sits alongside the will, unfortunately, human nature is we don’t, we don’t deal with disappointment very well, whatever level it is, whatever age you are. You’ve been looking forward to something, obviously not the death of your loved on, you know, thinking that oh, will happen, I’ll be sort of fine.

I mean, I was trying to tell people that you shouldn’t count on having any inheritance. And, you know, certainly not with rising care costs and things like that, you know, there is a chance that there’s not going to be as much left.

I think in the last two or three decades, with house prices being so people are inheriting more than they may be anticipated. And also, the generation of, you know, people who on have dying, I suppose were more private about their financial affairs. I would say we get quite a lot of people who come in and are surprised that Mum and Dad had so much away in different accounts and things in there. The testator themselves usually has a very low opinion of how much their house is going to be worth. And they say, oh, well, you know, it’s probably worth £150,000, and you think it’s a four-bedroom house in a nice village outside Norwich, no, it’s not going to be worth that, you know, it’s going to be worth at least double that. And I will quite often look online for something comparable, just as an example to them to say this is more what you’re thinking about,

Emma Knights
I suppose, as well it’s the generation that they were quite frugal. They didn’t waste money, they didn’t spend things unnecessarily, they did save. So that’s why they have got so much to pass on.

Louisa Bradberry
Absolutely, they didn’t spend above their means, they didn’t have credit cards, they didn’t have the ability to have the credit cards either. Like we’ve all grown up with that ability to say, I am not going to wait for Christmas for this, I’m just going to buy it. I’m not going to wait to save up for it, I’m just going to get a credit card or higher purchase agreement, you know, people used to buy things outright.

And I think that does that does come across with the generation of the demographic crossbows of the clients that I deal with daily. Not all, some are just happy to give it away during their lifetime. And that’s very tax efficient if you live. But others are more, you know, they don’t want their children to waste it. And there’s a situation where you can get with them. You know, if you’ve got a client say in their 80s, you know, their children could be in their late 50s, early 60s, they could have their own inheritance tax problems. So that’s where you do get to status that will sometimes skip a generation leave it to grandchildren, which again, I think if the children are on board with that during your lifetime, there’s no nasty surprises. That’s not a bad way to do it.

Emma Knights
But it just involved in the whole family in the planning process really, isn’t it rather than just assuming that’s the right thing to do?

Louisa Bradberry
Yes, you can get children that are very interested in their parents financial planning, as I’m sure you’ve experienced recently, and what they do with their assets and what their wills says and things like that. Obviously, there’s strict rules of bank confidentiality, and we must make sure that the instructions are coming from our clients and not from a well-meaning family member.

So yes, I mean, it is difficult, and I think it all comes back to communication, getting good legal advice, good financial advice, knowing exactly what you’ve got to leave, and how those assets could be used.

I certainly will say to my clients, you know, we try and make your will flexible in that it you know, if you get a grandchild that you didn’t expect, you can change your will for that. But you must think about this is what you’ve got today. And you know, we were told at university in law school to get hit by a bus the day after you sign your will, what happens? So, we want it to work for that inevitable situation.

Emma Knights
It needs to be what you want as of right now.

Louisa Bradberry
But also, what will work if you don’t look at this for 20 years.

Emma Knights
Is it going to adapt to your changing circumstances?

Louisa Bradberry
I always suggest that people have a look at their wills every couple of years and any major life events like, deaths, births, divorces, inheritance, and their own inheritance or children’s inheritance from, you know, other avenues, things like that. And it’s good to review, certainly to look at every five years, and keep an eye on the financial pages and the news, because sometimes legislation comes in very quickly that we don’t anticipate. Obviously, we have certain things where it’s said ‘this will take effect as of the new tax year’, but sometimes it can come in, like after election result, and it will just change the law.

Everything you were saying on a Monday could be completely different on the Tuesday, I have seen instances of that happening in the past.

Emma Knights
We’ve mentioned a few different things about obviously, what things you can put in your will and how they can help. But why do you think having a will is so important, ultimately.

Louisa Bradberry
Because it says where your assets are going to go. If you don’t have a will, they will it will pass under the rules of intestacy and you may be surprised at where your assets turn out. So having a will is your last chance to say what you want to say. And any supporting letter of wishes that goes with it. Even if it’s where your Granddad’s medals go, they will go to beneficiaries that you might not want them to go to if you don’t write a will. One thing that does get overlooked quite often, I guess, is people thinking they don’t need a will, that they’re not old enough to need a will.

Well, I think if the last two years and the COVID pandemic has taught us anything, and also the war in Ukraine, is that the situation in the world can affect whether you need a will very, very quickly. And you know, there will be people who did not anticipating dying in their 30s in a war or as a result of COVID, who probably died without leaving a will.

People also say I have nothing to leave, but quite a lot of people in that bracket have children. You can appoint a guardian in your will if you have got a situation where it’s not the surviving parent who would look after your children. And I think it’s important that you give thought to those sorts of things as well, not just money and your assets.

One of the interesting things that does come up is quite often younger people. When I say younger people, I probably mean people under 50, that keeps me in that bracket as well, over 18 and under 50 sort of thing. I have nothing to leave, they do have that quite a lot of that age range will have houses, if they own them, so they pass to the other co-owner or not.

It’s a separate thing, but quite often people have debt and service payments that they sign up to on their first day where they’ve got a whirlwind of paperwork, and they just signed something, and do they know where they pass? Do they pass to a person specifically, to a spouse to children? Or do they just form part of your estate on death and do have life insurance policies that you you’ve taken out because of something? And you don’t know where that money goes when you die. If that forms into your estate and your estate is then it passes along the rules of intestacy, it could end up going to that child that you don’t want it to pass on to. Or it could end up to the parent that you’ve had nothing to do with for 40 years.

It’s just important because, you then choose its choice. It’s having the last say, which I quite like. And also, it’s the choice of where your assets go, rather than somebody who wrote the rules in 1925 says where they should go and amended them, you know, 9/10 years ago?

Emma Knights
You’ve mentioned the rules of intestacy a few times. I know it’s a very lengthy process. I know a lot of people that I’ve spoken to in the past think that if you haven’t made a will, it all goes to the state or something like that. But I just wondered if you could give us a brief little overview of kind of the first few places that it may go if you don’t have a will.

Louisa Bradberry
Of course, I was going to say earlier, I think TV plays a massive part on what we think about wills and all of this kind of thing because people sort of have this pre conception, and lawyers to an extent, you know, they think oh, you just pop up. It’s like the lawyer in EastEnders, who is always the same lawyer, and it doesn’t matter what they’re doing. They’re fighting a murder charge, they’re dying, they’re buying a house. It’s the same lawyer that does it and I think the days of that sort of jack of all trade’s solicitor is probably on the way out.

However, with intestacy, I suppose really the first Part is are you married, or in a civil partnership? If you are, then a part of your estate or possibly the whole estate will pass to your spouse. If you’re married and your estate, so that’s your assets that are solely yours, don’t pass by survivorship to a co-owner, for example, the sharing property, if that is over £270,000 at the moment, it is different as to whether it is and under that or depending on whether you have children. It is quite complicated.

It’s like the rules of intestacy is really who’s left? What have you got and who’s left to take it is where we start. If you’re married, and you’ve got no children, everything will pass to your spouse. So that’s, that’s quite an easy one. If you are married and you have children, your estate will pass between your spouse and children in the in the following way. The first £270,000 pounds is like a fixed sum which will pass to your spouse, as well as your personal chattels, as we lawyers like to call them, so your personal effects your jewellery, your cars, your mugs, and saucers, all that kind of thing that aren’t nailed down in your house and will pass to your spouse as well.

After that, £270,000 pounds in the personal effects, your estate is divided into two halves, one half passes to the spouse, absolutely, and the other half passes to your children. If your children are not yet 18 it will be held on statutory trusts until they are. So again, that’s another reason that’s important to make your will if you come back to the reason, again, your children under intestacy will inherit at 18. I think there’s probably a lot of parents out there who go ‘God I don’t want my 17-year-old to have money next year, though, they wouldn’t do anything sensible with it’. You can control the age in which your children inherit under a will. Obviously, intestacy is flat, they don’t get anything before18.

If you don’t have a spouse, and you just have children, then your estate passes equally to your children. Linking that into why it’s important to have a will, you might have a child that you don’t have anything to do with, for whatever reason, and you don’t want that child to inherit under intestacy. Make a will because otherwise, if you don’t have a will, it will just be divided between all of your children. Which again can be people who you haven’t seen for 25 years, why would they get something? If you don’t have children, it will bounce up to your parents.

Emma Knights
If they’re elderly, and they might already have inheritance tax problems, if they suddenly inherit a lot of money, then you could be causing problems for somebody else.

Louisa Bradberry
Absolutely. If your parents have both predeceased you, and again, you can have a situation where, and I’ve certainly seen this quite a few times in my career, where somebody dies intestate, and they haven’t had a relationship with their Dad, let’s just say, for 20 years, the other parent can be quite surprised when the Dad inherits. They say ‘oh, so you mean, they’re going to get something?’ So yes, they’re going to get exactly what you are, as the Mum in this situation. Right? Okay, well, I don’t know where they are. And that leads on to its own problems. It is a case of it will follow the rules. And if you don’t like the rules, the only way you can change them is to by writing a will.

And then obviously, if your parents have predeceased you, then it will go out to your siblings, if you have any. If you don’t have any, it can go up to your grandparents and if your grandparents probably if your parents have died, so if your grandparents and then it can go out to aunts, uncles and cousins. That’s where you end up. Somebody rings you from heir hunters, and says, great aunt Ina l left us some money.

Emma Knights
My aunt and uncle have been contacted from someone there before. I always thought it was a bit of a myth that people didn’t really do that.

Louisa Bradberry
It does devolve to the crown or to the state only after we have exhausted parents, siblings, half siblings, grandparents, your aunts and uncles, half aunts and uncles things like that. That’s the other thing, you know, there are many, many layers. And not that many people will die having absolutely no family left in their family. But they do quite a lot at the time. And my experiences of people don’t have, you know, close relatives they leave to charity or to friends. And so that can, again, have its own issues,

Emma Knights
They’ve then got the choice to be able to do that or you will whereas otherwise they wouldn’t know. Absolutely.

Well, I think we’ve exhausted the rules of intestacy. I think if anyone needs any more advice on that they can come and have a chat with you because you know the ins and outs of everything, but also their own personal situation, their circumstances. If I need to make a will, you are the right person to be speaking to.

Thank you for joining me today. Louisa. It’s been lovely to have you.

Louisa Bradberry
Oh, it’s been it’s been nice to be here.

Emma Knights
It’s your first experience of recording a podcast?

Louisa Bradberry
Yes, I can safely take that off the bucket list. And, yes, certainly, I mean, if anybody’s got any questions, or if you ever want me to come back and do something more specific about an area of rule, do let me know. We’ll be in touch.

Emma Knights
Thank you very much.