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House Buying – What Solicitors Do When You Are Buying A House.

What is a Solicitors role when I am buying a house?

You instruct a solicitor to handle the legal process of buying your property. This includes reviewing the Contract documents that you will be required to sign and the information provided by the sellers solicitors, also known as the “Contract Pack”. This will include a copy of the title deeds for the property, property information forms that have been completed by the seller and other property documents that may available, for example guarantees.

Your solicitors will provide advice on the information provided  by the seller and will conduct property searches on your behalf. The standard property searches that are conducted are a Council Search, Water Search and Environment search. There are other searches available that may be applicable to your area or that you may wish to have carried out and your solicitor will advise you of this. these searches check that your property will be connected to essential services, highlight any development work happening nearby and check other matters relating to the property.

If you are obtaining a mortgage to fund your purchase, your solicitor will provide advice on your mortgage offer and will arrange for you to sign the mortgage deed. It is worth noting that when you are obtaining a mortgage, your solicitor will not only act for you in the purchase of the property but also the mortgage lender. Your solicitor will need to comply with any requirements by your mortgage company before your lender will allow your mortgage funds to be released.

It is usual for some enquiries to be raised from the information provided by your seller and from the result of your property searches. For example, this may to be to clarify the information provided and/or you may have some queries about the property yourself that your may wish  your solicitors to raise.

Once the investigations have been concluded, you will now be asked to sign the legal documentation which is the Contract of Sale, Transfer and is applicable Mortgage Deed. The documents can be sent to you for your signature or if you prefer an appointment can be made. Once the documents are signed and you are happy to proceed, you will discuss a moving day, also known as “completion day”.

Once a date has been agreed, your solicitor will request your authority to “exchange contracts” which is the formal step which makes the agreement between you and the seller legally binding and confirms the moving day. On the moving day, your solicitor will arrange to transfer the monies to the sellers solicitors and once the sellers solicitors have confirmed receipt of the same, you will be able to collect the keys for your new home. These are usually collected from the estate agent.

After completion, your solicitor will take steps to inform HMRC of your purchase and pay any stamp duty land tax that may be required and also to formally register you as the new owner of your property at the Land Registry.

Do I need to obtain property searches?

If you are obtaining a mortgage, your solicitor is acting for both you and your lender in the purchase. It is a standard requirement of mortgage lenders that property searches are obtained. The standard searches that should be obtained are a Council Search, Water Search and Environment Search.

Other searches may be required by your lender for example, a Coal Mining Search if you are buying a property in a coal mining area.

If you are a cash buyer, purchasing the property without the aid of a mortgage, it is entirely your decision whether you obtain the searches.  But it should be noted that when you are buying the property, the caveat is “buyer beware” and the onus is on the buyer to obtain as much information about the property before exchanging contracts. Unless, you know the area and the property well, we would recommend that a prudent buyer would  obtain the property searches. You should discuss this option with your solicitor before making a decision and if you decide to proceed without obtaining the property searches, you will be required to sign a disclaimer confirming your decision.

How long does it take?

Giving a timescale is difficult, as each purchase is different. However as a guide, your matter should complete in about 6-12 weeks from receipt of the contracts and initial information about the property from the sellers solicitors.

Do I get documents to say I own the house?

You will receive  a copy of the Title Information Document which is the main deed that confirms your ownership of the property. You may also  receive some documents that are applicable for the property that were provided in the contract pack. It is rare today that you will get a large bundle of old documents, unless the property is quite old.

Any documents that you do receive, should be kept in a safe place as you will be required to provide the documents to your prospective buyer if you were to sell the property.

What costs are involved?

The standard costs that you are required to pay are your solicitor fees and the disbursements. Disbursements are third party payments that your solicitor will make on your behalf; these are your property searches, stamp duty land tax and registration fees. For an instant, detailed quotation of all the costs associated with buying a house use our online quotation tool.

Should I use the “Free Legal” service with my Mortgage?

A number of mortgage lenders may offer this incentive to you as part of your mortgage product and you should consider this option carefully.

If you are minded to proceed with the “Free Legal” solicitor, you should bear in mind that it is likely the solicitor will not be local to you or the property that you are buying. Therefore, you will only be in contact with your solicitor via email and telephone. This may be suitable for some people but it does not work for everybody.

The “Free Legal” solicitor will likely have a large number of cases and it may be that they are not able to progress matters in a timely manner. This is an important consideration as your mortgage offer will have a deadline date before it will expire and then you will be reliant on whether your lender will agree to extend that deadline.

It is recommended that whilst considering this option, you should  consider the other mortgage products on offer to you  to see if they are more suitable  i.e. a cashback incentive. Depending on the offer available to you, you may find that a cashback incentive may cover some or all of the costs required by your solicitor. It is therefore recommend, that you do some research and obtain some quotations from different solicitors to determine the costs and consider the mortgage products available to your carefully.

What are the benefits of using a local firm?

If you are buying a property locally, a local firm as they will have the local knowledge and understand the possible quirks of the area, for example whether mining was carried out in the area or if shale is known to be present in the area.

Another benefit, is that  you can arrange an appointment to see the solicitor handling your purchase to discuss it in detail rather than just dealing with your matter by email and telephone.

At Clark Willis we have specialist property solicitors at both our Darlington and Catterick Garrison offices and have experience in Forces Help to Buy funding*. Whether you are a first time buyer, moving up the property ladder or are a landlord with a buy to let portfolio, our solicitor led service means that you can trust us to get you and your property transaction moving.

*Defence Discount Service Card holder discounts applicable.

Divorce Darlington

How to get Divorced – The Basics.

How do I actually get divorced?

You marriage has to have broken down ‘irretrievably’ meaning that there must be no prospect of reconciliation i.e. getting back together with your partner. You have to prove one of five facts on the application form and provide a statement in support of your application e.g. if relying on your partner’s unreasonable behaviour, you will have to list half a dozen examples which are timed/dated by way of illustration for the court. These are known as ‘particulars’.

How long will it take?

The process can take at least 6 months. There is an administration backlog currently within the courts (with the new centralised divorce units). Further, if you intend to sort a financial settlement this may prolong the finality of a divorce too as you ordinarily obtain a financial Court Order before you apply for to finalise your divorce. It is not unknown for a case to run for up to 2 years (if the finances are somewhat complex). The process may take longer if you or your partner are not resident in the UK or your marriage occurred overseas (out of/not in England and Wales).

What do we do about finances, the house and our debt?

You can agree arrangements between yourselves informally however this type of agreement would not be legally binding or enforceable by the Court. You can apply to the Court for a Consent Order where the Court will formally record your mutual agreement and can help protect each of you in the future. If matters are complex, protracted or disputed then Court proceedings can be issued to have the Court intervene to make the final decision.

To do either of the above, you and your partner will be required to provide full information regarding your current financial circumstances. This would mean current bank statements for each and every bank/building society account you have, interests in any properties or businesses, current pension provisions and liabilities such as loans, credit or store cards.  You will also be asked about your current outgoings and standard of living to determine your financial needs. This information will demonstrate what assets, income and liabilities there are available within the marriage/civil partnership for negotiation and settlement.

If we agree finances now, can my ex later come back for more?

Yes, unless you have obtained a ‘Clean Break’ Court Order. This is another good reason to have any financial arrangements formalised through the courts rather than informally agreeing matters between ourselves. Whilst things may be amicable at present this position may change in the future and one party may also have a significant change in circumstances, for example an inheritance or new relationships.

Who will the children live with?

Again, this can be mutually agreed between partners however, If this cannot be agreed amicably, parties can consider the assistance of a family mediator. As a last approach, an application may have to be made to the Court for a Child Arrangements Order to determine with who the child shall live and how much time is to be spent with the parent the child does not live with.

What happens if my partner won’t agree?

If your partner may refuses to sign and return the Acknowledgement of Service which is the document that they are sent by the Court following your application to the court, you will have to prove to the court that your partner has in fact received the papers but is just not co-operating. There are a number of ways of doing this, for example instructing a process server.

Your partner may indicate on the Acknowledgment of Service form that they do not agree with the reasons for the divorce that you have put on the application. Your partner has to state the grounds on which they disagree with your statement and they may wish to defend the divorce.

Your partner may also refuse to contribute towards the court fee of £550 for the application to be processed by the Court.

If your partner is hostile to the divorce they may also not provide all the relevant financial information documentation to enable each party’s financial circumstances to be determined and a fair financial settlement reached.  Financial proceedings therefore may need to be issued to run alongside your divorce.

All of the above may cause delay, additional legal fee costs and stress.

What next?

What is certain with every divorce is that each couple, their relationship and their attitudes to separation are unique and that whilst there is plenty of material to read and advice flowing on the internet, it is always beneficial to speak to a specialist legal adviser. There really is no substitute to a confidential discussion with a solicitor as to your own circumstances and what divorce may mean to you as a divorce is a very personal experience.

Our trusted Family law team have a wealth of experience in divorce, financial and childcare matters, include members of the specialist Resolution group (https://resolution.org.uk/) and also include trained mediators meaning that you can have peace of mind that your separation is in safe hands. Contact your local Clark Willis office at either Darlington or Catterick Garrison to make further enquires and see how we can help.

Law Firm Darlington

No3. ‘Law Firm for Life’

The third of our black and white monthly images, entitled ‘Lawyers for Life’, of course has to have a festive feel given it is released in December and so what better image to feature than a Christmas tree covered in snow. During the festive period, households across the country bring in real trees and put them at the heart of their homes, central to the celebrations, until after the festivities are over in when they are often discarded.

Similarly, instructing a law firm can be an isolated, short term event. You may never require the services of a solicitor or may only ever need to use a solicitor when you purchase a home, largely a short term experience of 6 to 8 weeks, similar to the enjoyment of the Christmas tree.

Depending on life events, people may also require solicitors to help personally on other occasions such as following a personal injury or car accident, getting divorced or leaving a long term partner, dealing with a bereavement or to assist with Court disputes. Unless you have used a solicitor before, you do not tend to think of yourself as having a solicitor, in the same way as you have a Doctor for example, where you automatically register with a local surgery just in case you need future medical assistance. For most individuals, a law firm is a transactional relationship.

At Clark Willis however, we believe in being a Law Firm for Life, in being there for our customers and their families when life events mean that they require a solicitor and to help them plan for the future.  We invest in this ethos in four main ways:

  1. Ensuring we have a core of personal legal services to ensure we can meet an individual’s legal requirements throughout their lifetime. Some of our core services include buying or selling Property, Will writing and estate planning, Divorce and Childcare, Personal Injury, Dispute Resolution and then finally assisting in sorting our matters through Probate when a person passes away. This cradle to grave mentality means we can genuinely be a ‘Law Firm for Life.’
  2. Focus on delivering excellent customer service levels to ensure that our client’s experience of a law firm is positive. We are rated 4.7/5 for customer satisfaction and seek feedback off every client we serve to constantly seek new ways to improve our customer journey with us. Instructing solicitors can be daunting and often at emotional times, where aspects as basic as being able to speak to your solicitor on the phone, being made to feel at ease and emotionally supported can make a real difference to the experience and challenge the traditional reputation of solicitors appearing aloof.
  3. Rewarding loyalty. Existing clients receive discounts on our standard rates for future work and those people utilising our residential conveyancing service or family team services also qualify for discounts on writing our updating Wills to reflect their new circumstances. We also offer complimentary storage of key documents as standard.
  4. We view the ‘Law Firm for Life’ ethos as equally applicable internally where we invest in future talent, recruit to retain and provide a positive working environment for our team. Many of the current team have trained with us and we have even had several team members who have left to explore life outside of firm and who have returned back to the fold. The longest serving employee has been with us for over 40 years. We believe this internal ethos flows through positively into our service.

So whether it is externally for our clients, or internally for our team, we genuinely wish to be a Law Firm for Life.

‘Law Firm For Life’ is the latest in a series of monthly monochrome images to be featured over a 12 month period on our social media channels to highlight some of the key elements of our service so be sure to follow us on Facebook, Twitter, Instagram and LinkedIn to see the series as they are released.

For more information on our firm please see www.clarkwillis.com

For those of you reading this who live in Darlington and who are enjoying a real tree this Christmas, why not consider using the Christmas tree collection service raising vital funds for St Teresa’s Hospice in the New Year. For more information and to pre book a collection visit https://www.darlingtonhospice.org.uk/event/christmas-tree-collection-service/

We take this opportunity to wish all of our customers and contacts an enjoyable festive period and good wishes for the New Year.

Solicitors for the Elderly – What does it mean?

Some of our literature refers to the fact that our Wills, LPAs, Tax & Trust team includes members of Solicitors for the Elderly (SFE) but for those of you who are perhaps not involved in the legal or financial world the organisation name itself, and more importantly the reasons for choosing SFE members for legal advice, may be largely unknown. Being part of a select group of law firms in Darlington with SFE members (only Clark Willis, Latimer Hinks and Hewitts) we think it is vitally important to explain why, for legal issues involving those in advancing years, a SFE member should be a preferable choice.

Who are Solicitors for the Elderly?

SFE was founded in 1996 and set out to be a specialist group to help, support and make a difference to older people. It has now grown into a national organisation of over 1500 lawyers all committed to its founding principles. It is a not for profit organisation to meet the needs of its members, so that they can provide good quality legal advice to older and vulnerable clients, their families and carers.

Why use a Solicitors for the Elderly member?

SFE is a national association of independent lawyers who specialise in older client law. As specialists, SFE members are also trained in older client care so that they are able to take into account any difficulties both mental and physical which can affect older and vulnerable clients and are aware of the health and social problems that people may face.

SFE members will provide independent advice, which is in the best interests of older or vulnerable clients, respecting their dignity and understand their need for a holistic approach to problem solving. All advice given is confidential. They will endeavour to follow a plain English policy ie they will always communicate in easy, understandable language and will explain any necessary legal terminology. Their wealth of experience and training will help to put people at their ease when dealing with complex, life changing issues.

Our solicitors who are members of SFE:

  • Are specialists in advising older and vulnerable clients on legal matters
  • Are fully qualified solicitors, barristers and chartered legal executives who have all undertaken additional specialist training in older client law
  • Have spent a substantial amount of their time working with older and vulnerable clients
  • Have gained the Older Client Care in Practice Award which is accredited by SJF (Skills for Justice) a government body which shows that they have the required additional skills to be able to advise and support older and vulnerable people
  • Follow a strict code of practice
  • Are committed to providing affordable, good quality legal advice
  • Are regulated by their professional bodies such as the Solicitors Regulation Authority
  • Keep their knowledge and skills up to date by undertaking regular training

What sort of legal matters do members deal with?

Solicitors who are members of SFE , including ourselves, undertake the following types of work:

  • Wills, Estate planning, tax planning, trusts and probate
  • Mental Capacity issues: Powers of attorney, Deputyships, Court of Protection
  • Advanced Directives (often known as Living Wills)
  • Care funding including asset preservation
  • Deprivation of Liberty safeguards
  • Abuse issues

How can we help?

You can be confident in speaking to our solicitors that you, or your elderly relatives, are receiving experienced advice. Often this involves working alongside your financial adviser to ensure that the relevant expertise is brought into play where necessary and a holistic approach is taken.

Our initial appointments are complimentary and our clear, fixed pricing for any legal matters you may then choose to instruct us in, means you can have peace of mind that accessing the right advice will not cost you earth and tackle the myth that taking advice from solicitors is expensive. If we can help you, your elderly relatives or someone you are perhaps a carer for, either get your affairs in order or deal with pressing issues, such as financial abuse or moving into residential care, then contact your local Clark Willis office (Darlington or Catterick Garrison)  and ask for one of our trusted team.

For more information on SFE, please visit their website.

Expert solicitors

No2 “No Magic”

The second of our black and white monthly images, entitled ‘No Magic’, represents the training and development of our legal team behind the scenes, as well as solicitors in general, to reflect why choosing the right law firm for your legal matters needs more thought than just plumping for a name.  Not all legal providers are made equally (some are not even solicitors) and your choice can have a direct impact on your matter.

It is not down to magic that our solicitors are experts in their own field and the right choice for your legal need but rather a dedication to learning, training and developing to make them not only competent lawyers but specialists in their respective fields.

Experts in their Fields

In addition to the training requirements to become a solicitor, 4 years of higher education and 2 years in practice, we encourage our solicitors to undertake additional training and qualifications to make them specialists in their respective areas of practice and respected amongst their peers.

Our Wills, Probate, Tax & Trusts team include members of the Society of Trust and Estate Practitioners (STEP) and Solicitors for the Elderly so they have vast experience and knowledge in Wills, tax planning matters and later life planning.

Our Family & Divorce team include members of Resolution Specialists, Collaborative Family Lawyers and trained mediators so they can take a holistic approach to separation and childcare issues.

Our residential property team have been awarded the Conveyancing Quality Scheme to reflect the quality of their work on property sales, purchases and mortgaging whilst our Dispute Resolution team includes mental health accredited panel members.

The firm as a whole has also been awarded the Lexcel award by the Law Society as a quality mark for practice management and client care.

As the law itself constantly evolves all of our legal team go through  annual training to remain at the forefront of their specialist legal areas.

A full list of our firm and individual accreditation’s can be found on our website.

Experience when it Counts

As a firm we have been assisting the people of County Durham, the Tees Valley and North Yorkshire with their legal matters for nearly 50 years.

Individual Solicitor’s experience is often referred to as post qualification experience (PQE,) in other words the number of years undertaking the job following the completion of the 6 years education and training set out above.

At Clark Willis, our longest serving solicitor and Partner, Peter Furness, specialising in Dispute resolution and Courts Martial work, has over 30 years PQE and our four Partners average 18 years PQE to lead our 28 strong team.

Whilst qualifications grant exposure to the relevant legislation and practice, it is experience that is the practical application of the law to assist individuals. The greater the number of years of practice, the more varied exposure to the real world application of the law and the greater ability to apply it to your matter, meaning increased knowledge and often swifter results.

Alternative Legal Providers

The is perhaps a little confusion by members of the public over solicitors, consultants, executives, Will writers, estate planners  and even the words lawyer and solicitor. Unless you a dealing with a law firm or solicitor regulated by the Solicitors Regulation Authority then you are not dealing with a solicitor with known training levels, experience and fully backed by insurance.

If you approach someone to write you a Will for example you would assume that there is a minimum training requirement for any person in England writing a Will, after all it is a document of significant magnitude. Many people are shocked that they could become a Will writer themselves within the same day with very little or no qualification behind them let alone any experience.

Whilst for simple affairs they may well be capable of writing a Will, just as a person can write their own Will without any help, it is perhaps best described in comparison to your doctor versus attending an alternative medicine provider. Your local GP has minimum training levels, can look at your entire circumstances instead of an issue in isolation and has access to the NHS behind them, to provide peace of mind and appropriate treatment. With alternative legal providers, especially Will writing, errors only become apparent after a death when they can’t be easily rectified, if they can be rectified at all.

Martin Lewis, the Money Saving Expert includes in his Will writing advice:

Here we want to start with a WARNING – unlike many areas of financial services, will-writing is NOT a regulated market.

This means there are a number of different ways to get a will, but the protections you have if something goes wrong can vary hugely, depending on who writes it.

Confusingly, while will-writing itself is unregulated, because solicitors ARE regulated professionals, if you use them you ARE covered by a range of potentially valuable protections.

With other (non-lawyer) will-writing services, you do NOT have the same safeguards, and with a DIY will essentially you are on your own.

 

No Magic

There really therefore isn’t any magic involved in dealing with our clients legal matters and our advice is purely based on training, experience and the knowledge and application of the law in a straight forward, clear way. So if you are in need of legal services in County Durham, the Tees Valley and North Yorkshire, then contact our trusted solicitors for peace of mind that what you are being advised is not hocus pocus.

‘No Magic’ is the series of a serious of monthly monochrome images to be featured over the next 12 months across our social media channels to highlight some of the key elements of our service so be sure to follow us on Facebook, Twitter, Instagram and LinkedIn to see the series as they are released.

For more information on our firm please see www.clarkwillis.com

Pre nuptial agreements

Civil Partnership or Marriage?

The Civil Partnerships, Marriages and Deaths (Registration etc.) Act 2019 requires the Government to make provisions by the end of the year to make couples of the opposite sex eligible to form civil partnerships. The result being that there is more choice available to couples wishing to make a commitment to one another, irrespective of their sex/gender/sexual orientation.

Despite same sex couples being able to marry or covert civil partnerships to marriage, civil partnerships remain a popular option. The number of civil partnerships registered has risen for the third consecutive year despite the fact that same-sex marriage could take place in England and Wales from the 29th of March 2014. For those of you that like to delve deeper into the statistics, the Office for National Statistics demonstrate that a civil partnership is most attractive to men and to older couples.

So what is a civil partnership and how does it differ to a marriage?

Differences between Marriage and Civil Partnerships:

In relation to the ceremony a marriage is formed when a couple exchange a prescribed form of words, whereas a civil partnership is when the second civil partner signs the relevant document, with no words required to be spoken. A marriage is often taken in the form of a religious or even a civil ceremony, however a civil partnership is entirely a civil process. There is no requirement for a ceremony to take place. Marriages are registered on paper, in a hard copy register, but the details of civil partnerships are recorded in an electronic register. Marriage certificates include the names of only the fathers of the parties whereas civil partnership certificates include the name of both parents of the parties. There are grounds of annulment available if married that are not so if you enter into a civil partnership e.g. if at the time of the marriage the respondent was suffering from a venereal disease in a communicable form.

Marriage, is a historic institution that is recognised around the world as being legally binding. A civil partnership conversely is not legally recognised in some other countries, which can cause difficulties if you are emigrating or require marriage rights while abroad. You will also find the same restrictions on same sex marriage in various countries – with some placing it at a similar level to a civil partnership, while others do not recognise it at all.

Civil Partnerships give couples the choice to formalise their relationship and celebrate with both friends and family without getting married. Many people see civil partnerships as being more modern, therefore expresses more equality within the relationship, rather than the institutionalised, patriarchy that is deep-rooted within marriage.

From a legal viewpoint, these two unions share very similar characteristics but there can be subtle differences following a separation in so far as process and rights.

Whether you are entering into a same-sex, opposite-sex marriage or a civil partnership, you may wish to consider a prenuptial agreement or pre-civil partnership agreements. The solicitors in our friendly family team here at Clark Willis are happy to discuss with you your options and the best way to financially protect yourself.

From our offices in Darlington and Catterick Garrison we offer a range of personal legal services including Family, Property Sales & Purchases, Wills, Lasting Powers of Attorney, Probate & Trusts, Dispute Resolution and Personal Injury across County Durham, the Tees Valley and North Yorkshire. Visit www.clarkwillis.com or contact your local office for more information.

 

No.1 “The Zebra”

Why We Are Seeing Stripes

Those of you reading this who follow us across our social media channels or who we have met recently at the Darlington Business Expo will not have failed to notice we have gone all dotty over stripes with the introduction of a Zebra combined with the phrase ‘Clear Legal Advice.’

Whilst a Zebra is instantly recognisable in its own right with its iconic stripes and is certainly eye catching across an Exposition hall, the choice of a Zebra to launch a series of black and white images over the coming months runs a little deeper than enabling us to be easy to spot.

Colour

Black and white have long been the colour scheme of Clark Willis Law Firm. Our heritage of providing legal services to the people of Darlington goes back nearly 50 years and so it was natural that the colours chosen by the firm during that early period reflected the colour scheme associated with the town itself and the football club.  As a firm we are proud to be headquartered in the heart of Darlington town centre and wear our colours to display this.

Clarity

‘Black and White’ is traditionally associated with clarity and an issue being easy to understand. The legal world, legislation and terminology can often be confusing  and daunting to those who wish to have matters clearly explained. One of our core values as a firm is that law should be made simple and we explain options clearly, in plain English to ensure our clients fully understand their position and enabling them to make informed choices.

Family

Zebras are family oriented animals and live in family groups of between 5 – 20 individuals. As a firm we enjoy a family team mentality across our 27 members of staff, many of whom have been with us for a significant period of time – the longest working with us for 40 years! Many of the current team have trained with us and we have even had several team members who have left to explore life outside of our herd and who have returned back to the fold. We believe this internal team ethos flows through positively into our service to clients as it enables us to work together across legal disciplines, to work more productively and efficiently and most importantly to focus on delivering an excellent service to our clients to uphold the firms reputation. You may have seen ‘Let Our Family Look After Yours’ included in our literature for this reason.

Resolution

Zebras are surprisingly courageous animals who will stand their ground and are not afraid to confront predators if required. The preferred choice however, is to avoid confrontation and the Zebras dazzling pattern structure and quick pace means that confrontation is normally a last resort. As one of the only firms in the area that can undertake mediation services, with two trained mediators in our ranks, we certainly believe in settling disagreements without confrontation where possible, but if required to do so we also have the legal expertise and experience to adopt a more robust position. This may be a simple pre action warning shot to a debtor for credit control or a more dogged pursuit of the right outcome on personal injury matter to achieve the best result for our clients.

‘No1. The Zebra’ is the first of a series of monthly monochrome images to be featured over the next 12 months across our social media channels to highlight some of the key elements of our service so be sure to follow us on Facebook, Twitter, Instagram and LinkedIn to see the series as they are released.

Trust Advice Darlington

Trustees – Managing trust money correctly.

One of a trustees main roles is to manage a trust fund correctly for the beneficiaries. This will often involve making decisions and investing money held by the trust correctly. Whilst this sounds easy, this is often one area that trustees find themselves in error, especially when family or friends are acting as trustees and can lead to personal liability for not achieving a reasonably return, failing to take advice and the potential for family disputes. Where a professional is appointed as a trustee they are expected to exercise an even higher standard of care and skill.

Investment Choice

The general financial principles are contained in the Trustee Act 2000 (s3) and may also feature in the trust instrument itself, to give the trustees power to put trust assets into any investment which they would be able to invest in if they owned the funds themselves. This is obviously a wide ranging power however, there is further guidance as to how the trustees exercise this function.

– Trustees must consider the suitability of proposed investments for the trust.

– The investment strategy should be diversified if appropriate to spread risk.

– Where trustees do not feel they are suitably experienced to take qualified financial advice to ensure the trustees are complying with their obligations.

 

Dependent on the nature of the trust other factors may need to be considered in the appropriateness of any investment, for example an Income in Possession trust (IIP) to produce income for a beneficiary for life before being distributed to remaining beneficiaries must way the balance between producing the income for those currently entitled against preserving or increasing the capital for those ultimately interested following the termination of the life interest.

Often something as simple as this can be overlooked and recently the writer has been involved in assisting a trust where a capital sum of approximately £10,000 was placed onto a trust in the 1980’s for the benefit of a surviving widow were only consideration was given to generating income for that surviving widow and not any subsequent capital growth.  In the 1980’s £10,000 had a significantly greater value then £10,000 in 2018 and had the fund been invested to both generate income and increase the capital then the trust fund wild have been substantially more, all beneficiaries would have been happy and more importantly the trustees would have acted correctly.

Beneficiaries age or tax position may also be relevant to investment choice of trustees and should be considered. If only £1,000 is held for a child until they reach 18 and they are currently 16 then a low risk choice would be sensible but if £25,000 is held for a 2 year old so there are 16 years to manage the fund, a longer term approach to grow capital would be more sensible. Income tax and reporting requirements to HMRC will be covered in a speedster blog but as a note of caution where trust funds are to be held for minor beneficiaries then trustees may consider a investment strategy to mitigate the need for income tax accountable to HM Revenue & Customs.

Investment Review

Following initial investment choices by trustees regular reviews should be undertaken and if necessary amendments made to ensure that trustees continue to discharge their professional duties and responsibilities.  Where financial advisors are utilised by trustees in relation to investments, this obligation is often met by the financial advisors submitting regular investment reports to the trustees.

With the uncertainty over Brexit and market reaction it is perhaps an ideal time for trustees to consider the investment strategy of their trust funds and as always document any decisions made to confirm that trustees have considered the investment.

Failure to Manage Correctly

Where trustees do not manage a trust fund correctly they can be held to have breached their position and be held accountable for loss. Where a loss has been incurred but the trustees have acted in accordance with their duties, for example if the stock market fell, trustees will not normally be liable if they have acted appropriately.

Often it is inaction of trustees rather than a incorrect informed choice that can lead to a question of negligence and in the pre-trustee act case of Nestle v National Westminster Bank PLC (1994) the beneficiaries argued that the trustees had exercised their investment powers too restrictively and that if the trust had been properly invested, it would have been worth a significantly greater value (over £1 million) Whilst the Court accepted the beneficiaries’ arguments they dismissed the claim because the trustees could not be held as following a investment strategy which no reasonably confident trustee would have done in the same circumstances.

Had they not taken any action at all in considering investments the outcome would have been significantly different with the trustees facing liability for the loss.

How We Can Help?

Our private client solicitors include members of the Society of Trusts and Estates Practitioners, the internationally recognised body of leading professionals in the areas of estate planning and trusts, and are available to provide advice on trust establishment, administration and winding up a trust to ensure trustees are complying with their obligations and reporting matters to HMRC correctly.

We can assist with ad hoc advice to trustees or undertaken a full administration service. We can also act as a trustee should you require a professional trustee to be involved in the trust administration.

Should you consider that you may need advice in relation to your role as trustee then contact our trust team at our Darlington office on 01325 281111 or visit www.clarkwillis.com or call into your nearest office.

Divorce law Darlington

Pensions and Divorce by Tanya Bloomfield, Family Solicitor and Mediator

Getting divorced can be an emotional, worrying and difficult time, however, for most couples sorting out the finances can be the most daunting part. In particular, pensions are not always straightforward and the options for dealing with them can be tricky depending on the circumstances of you and your family.

Do you need to consider pensions as part of a divorce?

The short answer is generally yes. When considering the resolution of finances on divorce the assets of the marriage are all considered. The starting point is to ask both parties to provide voluntary disclosure. This really means obtaining evidence to show how much all the assets are worth. Pensions form part of this process and we will generally request that you try and obtain a ‘transfer value’.

What is a transfer value and how is it used?

A transfer value is a calculation of how much the pension pot is worth on the date it is valued. You might get an annual statement every year which will give you an indication of how much the pension will pay out when you start drawing on it, but for divorce purposes we need to know how much the pension is worth as a whole. Most people will now have a pension in light of the auto-enrolment provisions, even though these new pensions tend to have quite a low value at the moment.

Will I lose my pension as part of a divorce?

Not always, but it will depend on a number of different factors. We will look at pensions with you as part of the divorce process and discuss all the different options available when looking at all the assets involved in your case.

We offer specialist legal advice on pensions and all of your other assets on separation and divorce. If you would like to discuss your case with us, please contact a member of our family team on 01325 281111.

Cash Is King – Debt Recovery for Business following Bathstore Going Down The Drain by Karl Medd

Why Keeping Your Debtors in Check is Vital for Your Business

 

When the specialist retailer Bathstore collapsed last month, 500 shopfloor and head office jobs were put at risk together with up to 300 bathroom fitters, suppliers and small businesses  paying a price. An article in the Guardian on The collapse of Bathstore makes a clear point, as do the case studies set out within it, that these are challenging times for businesses in all sectors. It does feel like there have been so many stories within the media regarding the precarious finances of some of the UK’s biggest businesses including Debenhams and Arcadia Group to name but two.

The difficulties of big business and the wider economy can also have a significant trickle down effect upon small and medium sized businesses, which are referred to in business jargon as “SMEs”. The article lays bare the effect that the failure of large business can have upon SMEs. One large contract or transaction can make, or break, an SME.

For the sake of impartiality, we have so far not mentioned Brexit, but this is clearly a matter of ongoing financial concern for business.

It is not just the financial fortunes of Big Business which can impact upon SMEs, as small and medium sized businesses very often work and trade with each other and therefore the livelihoods of all of employees are likely dependent upon receipt of payment, or contractual provision of goods and services, promptly.

Cash flow is extremely important for SMEs. In fact even law firms are not immune to the financial pressures of cash flow and bad debt. There is a well rehearsed adage in business and accounting circles which sums up the position neatly: “Turnover is vanity, Profit is sanity, but Cash is king.”

Reality can be extremely harsh if your business is struggling to recover bad debts which are impacting upon the financial health of your business.

At Clark Willis Law Firm, our Civil Litigation team are experienced in pursuing recovery of trade or commercial debts on behalf of individuals and SMEs and we act for some well-known business in the town to assist with their debt recovery. We can also provide practical advice and information as to your legal position should your debtor become insolvent, be it liquidation, Administration or a Voluntary Arrangement. So before outstanding invoices start having a detrimental impact on your business call our team on 01325 281111 to discuss ways we can help you.