What documents should I shred and what documents should I keep?

I was visiting an elderly client recently and after our usual chat over a cup of tea and Chelsea bun I set about helping her clear the mounds of paperwork which were covering every work space in the kitchen and every surface of all downstairs tables .There were piles of assorted filing spewing forth from drawers and mountains of superfluous documents stuffed randomly into magazine racks.

But my client is certainly not alone in amassing ever-growing piles of paperwork. We all get tons of junk mail from credit card applications, insurance packages or a 50 page retirement fund report from a job you had a decade ago. Not only does excess paperwork take up a lot of space but it also makes things very hard for your family if you were to die or lose capacity and need to have your affairs managed by someone else. You can make life much easier for family members by having the right papers in the right places. It will also save you hours of hunting around for that document you urgently need but cannot quite remember the safe place you put it.

I think the main reason people accumulate so much paperwork is because they are uncertain what records to keep and what to discard. So to help you I have composed a checklist of what I think should be kept and where best to keep it. The list is of course not exhaustive!

Depending on what type of documents you are dealing with, you need to store some of them for certain periods of time, others you can digitise and others you can throw away. Let me start with the documents you need to keep physical copies of forever. These are best stored in the one place-perhaps in a metal fire-proof deposit box.

  • Birth Certificates
  • Death Certificates for deceased family members
  • Marriage Certificate
  • Any divorce or legal papers regarding dissolution of a marriage
  • Adoption papers
  • Copy of your current Will and Power of Attorney
  • Copy of the title deeds of your property
  • Important contracts
  • Household Inventory – if there were a fire or burglary in your home, this record will help you remember what has to be replaced and how much each item is worth. An inventory may also highlight the need to increase your insurance if necessary.
  • Education information such as degree papers, diplomas etc

You should also keep the following : A small filing cabinet is a perfect place to keep all the documents listed below.

  • Utilities- it is useful to keep a note of all your providers for gas, electricity, telephone, and internet together with account and customer numbers. You do not need to retain old bills.
  • Current insurance policies for building and contents. Outdated policies should be discarded.
  • Warranties, manuals and receipts for household appliances or guarantees for home improvements should also be retained. Expired warranties and guarantees can be destroyed.
  • Vehicle papers-(tax discs are all now done online). You should ,however, keep together the vehicle registration form, MOT certificate, car insurance policy and any loan documentation relating to the purchase of the vehicle.

Now for your financial papers, what should you keep?

  • Bank statements and tax certificates- Ideally these should be held for around 6 years although HMRC can in some circumstances look back further than that. At a minimum bank statements should be kept for two years following the end of the tax year to which they relate.
  • Life insurance policies should be stored indefinitely and all other insurance documents should be stored safely for as long as the policies remain active.
  • Investments –Almost all shareholdings now are held without certificates. You should keep a written list of all your investments noting down any holdings which are held as share certificates and those which are not. The list should be up-dated as and when required. The papers relating to old inactive investments should be thrown out.
  • All relevant pension plan documents

Papers best stored by your solicitor:

  • Your Will- having a valid Will is extremely important and should be retained in a secure place and family members should know where it is. Mitchells Roberton offer a free storage service.
  • Your Power of Attorney-I cannot stress enough the value of having a Power of Attorney in place. Again Mitchells Roberton will store a Power of Attorney for you at no charge.
  • The title deeds to your property are best held by your solicitor. At the moment we hold many thousands of title deeds for our clients.

Digital Assets- Keeping a track of your digital assets is as important as keeping paperwork safe. There is a delicate balance between security and enabling a family member to access any passwords should they be needed.

That is pretty much it!  But remember that your papers should be reviewed ideally once a year to discard items no longer needed. Of course you should always shred anything that has personal information like your name, address, phone number, or bank account details.

There is no time like the present to get your paperwork in order and if I can help  please call me Alison Gourley on 0141-552-3422 or email me at ajg@mitchells-roberton.co.uk.

And now I am going home to give the shredder a well overdue work-out!

School Mock Court Case Project

Two of our trainee and one of our newly qualified solicitors were delighted to volunteer in The School Mock Court Case Project, a national cross-curricular event encompassing a range of subjects- from art to journalism, debating and writing skills, to name just a few. The purpose of the exercise was to allow private businesses to come into the school environment to help put learning into a context. The Mock Court Case let children all across Scotland learn about the law as they prepared a case to take to the High Court in Glasgow.

Heather Warnock, one of our trainee solicitors was working with the children in Mosspark Primary, Andy Lindsay also a trainee was with Wellshot Primary and Angela Ainsley a newly qualified assistant was assisting at Fernhill Primary. The classes involved in the project were either Primary 6 or 7.

Each class was divided into two teams. One team was the “Pursuers” and the other team the “Defenders” and every child had a role to play. There were lawyers, researchers, witnesses, court artists, gown-makers and journalists.

The case was about an old lady called Mrs Telfer who sent her grandson to buy her a new mobile phone as the battery in her old phone wasn’t working. Her grandson brought back a new phone but Mrs Telfer claimed it was much too high tech for her to use as she only wanted to make phone calls and send a few texts. Not wanting any internet access, she didn’t understand why her phone bill was so high. She asked to change her phone and refused to pay her large monthly bill. The company Talk & Txt decided to take her to court so they could get their money for the phone.

Each team had to do the following:-

  • Prepare pleadings
  • Conduct research
  • Prepare evidence
  • Create court gowns
  • Present witnesses
  • Produce artists’ impressions of the court scene.
  • Present the case in court.

The project is now run across three regions: The Lothians, West of Scotland (Glasgow to Ayr) and Tayside & Fife. The founder and organiser of the competition Gerald Murphy notes  “ The desire was to integrate a project into the schools that children would enjoy without realising they were learning and that had an aim that would surpass what is not ordinarily available to inspire students-appearing before a real Sheriff in a real court.”

Unfortunately none of the teams tutored by Heather, Andy or Angela made it through to the finals which are being held on 29th February 2016 at Central Hall in Edinburgh but Angela’s group made it to the top 5! However all three of our staff members felt that the aims of the project to create confident individuals who are effective communicators, successful learners and responsible citizens were met. As Heather said “Volunteering in this project was very worthwhile and the children seemed to greatly enjoy it.”Angela points out that “The children embraced their roles whole heartedly and had such fun.”Andy admits that he enjoyed participating but what he will remember most is the little girl who would have much preferred a criminal case with lots of blood and gore who asked him “If I stood on a rice crispy and squashed it would I be a cereal killer?”

Cycle Safety in Glasgow

Last year at Doors Open Day my friend and I visited The White House Inn on Maryhill Road, Glasgow  which has now been taken over by Free Wheel North, an organisation working towards a fairer, healthier society by encouraging people of all ages and abilities to walk and cycle as part of their everyday life. Free Wheel North believes that one of the simplest and most effective ways to improve health and well-being is for more people to travel under their own steam. Whether by walking or cycling, we all benefit when more of us take to the streets on our own two feet. I firmly believe that to be true and am trying my best to cycle as much as possible but sometimes I have to admit that I do find the thunderous traffic on the busy roads a bit daunting and I’m sure I’m not the only one.

In theory Glasgow should be a cyclists’ paradise, being a reasonably compact city with many parks and green spaces offering car free journeys in pleasant surroundings. Indeed the city boasts the newly constructed Sir Chris Hoy velodrome built for the 2014 Commonwealth Games. But as Owen Duffy in a previous article states about Glasgow: “Plagued by 1960s planning, the city was built largely with a driving populace in mind. The grid-iron Victorian city centre connects with the M8 motorway, whose grim bridges and tunnels cut through the heart of the city. Its unsightly tangle of slip roads and interchanges can be tricky to navigate for two-wheeled road users.”

It was therefore welcome news to note that a cycling charity, CTC, has recently called for a detailed analysis of where road accidents take place in the city in order to have the correct speed limit restrictions imposed in the right places. Campaigners urged the Council to ensure that 20mph zones in the city become the norm, especially in areas that frequently result in accidents and fatalities for cyclists.

A study revealed that cyclists and vulnerable road users were much more likely to have an accident on roads leading into the city centre particularly where there are a combination of shops, on-street parking, frequent junctions and no cycle facilities. Examples include sections of the main Kilmarnock Road , Victoria Road , Dumbarton Road, Byres Road and Shettleston Road. The study also found that dual carriageways were particularly dangerous for cyclists with roundabouts on dual carriageways being the highest at- risk area. Auldhouse roundabout, on a dual carriageway on route to a retail park, is the highest single cycle accident locality in the city. Other roundabouts such as those on Barrhead Road, Shieldhall Road, Paisley Road West and Langside Avenue also have problems.

Another cycling charity, Go Bike, has also presented Glasgow City Council with a petition signed by more than 220 people calling for Glasgow to follow Edinburgh and become Scotland’s second “20mph” city. The case was laid out to the Council’s Petition’s Committee and was thereafter referred by the Council to their Sustainability and Environmental Policy Development Committee.

Bob Downie, the member of Go Bike who drew up the petition, along with fellow campaigner Tricia Fort argued that “just over 930 miles of Glasgow’s roads- including congested city centre routes and residential streets- should become 20mph limits.” The charity urged Glasgow to follow the example of Edinburgh where there are plans to convert 80% of the capital’s streets to 20mph limits using only signage.  Doing this is estimated to cost Glasgow £1.5 million and will take 5 years to complete as opposed to deploying expensive traffic calming measures such as speed bumps which the charity, using figures obtained under the freedom of information, advised costs the council £33,000 per mile.

The policy has also been rolled out in other UK cities, including Bristol, Plymouth, Oxford and Islington as a means of cutting pollution and improving safety.

Any proposals which would reduce accidents must be embraced. Being involved in an accident can be a horrific and life changing event. Of course being in an accident through no fault of your own means you may be entitled to make a personal injury claim and Paul Neilly or Hugh Grant in our Court Department would be able to help. They can be contacted by telephone on 0141-552-3422 or by email pdn@mitchells-roberton.co.uk or hjg@mitchells-roberton.co.uk. For me with new safety measures being put in place I ardently hope the necessity of making claims for compensation for personal injuries decreases.

Sorry May No Longer Be The Hardest Word

Over 35 states in the USA and many other countries around the world including Australia, Canada and New Zealand have successfully implemented effective apologies legislation. It is now the turn of Scotland.

The Apologies (Scotland) Bill was first proposed as a member’s bill in the Scottish Parliament by Margaret Mitchell MSP. The bill proposes that except in the case of fatal accident enquiries and actions of defamation, if an apology is made which contains an “express or implied admission of fault” this apology cannot be led as evidence in civil proceedings. The over-riding aim of the bill is to encourage apologies enabling wronged parties to gain closure and move on, without raising court action thus easing the administrative burden of the time and cost of litigation.

As a solicitor I wish I had a penny for every time I have heard the words “It’s the point of principle” or “It’s not about the money” but perhaps these statements should not be treated with cynicism but with the recognition that the use of apologies may in fact offer an opportunity to avoid the adversarial system.

Indeed the efficacy of an apology should not be underrated. Jennifer Robbennolt Professor of Law and Psychology , University of Illinois noted that “contemporary empirical research has…generally found that apologies influence claimants’ perceptions, judgements and decisions in ways that are likely to make settlements more likely- for example, altering the perceptions of the dispute and the disputants, decreasing negative emotion, improving expectations about the future conduct and relationship of the parties, changing negotiation aspirations and fairness judgements, and increasing willingness to accept an offer of settlement.”

But what is the definition of an apology? The proposal is that to benefit from “the immunity” an apology should contain three elements:

  • An acknowledgement that there has been a wrong doing
  • An expression of regret, sorrow or sympathy for the wrong doing
  • A recognition of direct or indirect responsibility for the wrong doing

I have mixed feelings about the introduction of this bill. I see it more of a clarification of the current law rather than a change. At the moment in Scotland an apology itself will not amount to an admission of liability, as liability is a legal conclusion drawn by the courts taking all evidence into account. Also I wonder if an apology expressed in such a formulaic way will genuinely provide closure for a wronged party. When this bill is passed it may be possible for parties to make admissions in the knowledge that if they parcel these admissions up in an apology these cannot be used in a civil court. Is that a genuine apology?

That said I recognise that there is huge pressure in Scotland for example on the NHS. The increase in compensation claims made by the NHS is staggering. Payments I understand have risen from £1.6 million in 2000-20001 to £58.24 million in 2010-2011 and these figures are only the tip of the iceberg if you think of the cost of out of court settlements, lawyers’ fees and other costs representing a major hidden drain of NHS funding so something has to be done.

The Apologies ( Scotland) Bill hopes to help the situation and I for one will keep an open mind. However as Margaret Mitchell herself admits “you cannot legislate to make people empathise.”

If I can help in any matters of dispute resolution please contact me Angela Ainsley by telephoning 0141-552-3422 or by emailing aja@mitchells-roberton.co.uk

Anti-Fraud Guidelines

Criminals are using increasingly sophisticated methods to target law firms and their clients. Most recently there have been multiple industry reports of seemingly convincing individuals contacting clients purporting to be an employee of the firm but with the sole intention of trying to extort personal details such as banking sort codes and account numbers.  At Mitchells Roberton trust is key and we are keen to raise awareness by providing reminders to help you avoid such scams.

Our Undertaking to You

We wish to advise all our clients that we will:-

  • Never ask you for credit or debit card details
  • Never ask you to provide us with bank account details unless we are in active contact with you
  • Never seek upfront payments over the phone for business not yet undertaken
  • Never send you an email with a link asking you to input personal information
  • Never initiate contact with you by telephone to solicit new business
  • Never withhold our number when phoning you
  • Never send you emails from a domain other than @mitchells-roberton.co.uk

Our request from you

We wish clients to report any suspicious activity to our MLRO Ian Ferguson by telephone on 0141 552 3422 or by email icf@mitchells-roberton.co.uk

Family Investment Company – A Good Idea

Perhaps something that may have slipped by most people in the Chancellor’s Summer Budget was the commitment to reduce Corporation Tax firstly from 20% to 19% by 2017 and then to 18% by 2020. The United Kingdom already enjoys one of the lowest Corporation Tax rates in the developed world comparing favourably with the United States (40%), Japan (33%) and Germany (29.65%).

It may not be immediately apparent how this impacts on estate planning so allow me to introduce the concept of a Family Investment Company (FIC). Since the Finance Act 2006 removed much of the favourable tax treatment for trusts there has been a comparative lack of alternatives to the more traditional trust structure.

In short a FIC is a private company whose shareholders are members of the same family. The shares can be structured to allow the ownership of the underlying assets to pass to the next generation without the older family members relinquishing control of the underlying assets before they are ready to do so.

If the initial subscription for shares is in cash there is no tax charge on setting up the FIC. If land or property is used it is likely there would be capital gains and stamp duty tax implications.

Perhaps this is best illustrated by example. The Jones family have considerable cash savings and create a FIC with Mr and Mrs Jones as directors and their four adult children as shareholders. They transfer £3.5 million in cash into the FIC with no tax implications.

As Mr and Mrs Jones wish to retain control over the company the children are not given voting rights meaning they are entitled to receive dividends and also to capital should the FIC be wound up.

Any profits the FIC makes are taxable at 20% which is significantly lower than the higher rate of income tax (40 or 45%) or the rate applicable to discretionary trusts (37.5 or 40%). Any UK dividend income received by the FIC will not be subject to tax but interest, rent and other income will be.

There is however the possibility of double taxation within the FIC structure where profits are first taxed at 20% and are then subject to income tax in the hands of the shareholders. It is still possible for shareholders to make tax efficient withdrawals in the form of dividends subject to their personal circumstances.

This is not to say that trusts no longer serve a purpose in estate planning. Where assets can be transferred into trust without incurring a charge to inheritance tax possibly through the use of business property relief or agricultural property relief it is likely that the more traditional trust structure will still prove to be more suitable. If the assets are cash a FIC is something that should be seriously considered as an alternative to a trust.

If the Treasury is committed to a scheme of graduated reductions in the rate of Corporation Tax it is likely that the FIC will become an ever more popular vehicle in estate planning in the years ahead.

If I can help or if you would like more information please contact me Bruce Battersby by email on bruce@mitchells-roberton.co.uk – Mitchells Roberton Solicitors in Glasgow.

Get on your bike!

Believe me when I tell you I have nothing in common with Norman Tebbit but, for entirely different and laudable reasons, I would coin his phrase and ask employees to “get on their bikes”. I am delighted to say that Mitchells Roberton has joined Cyclescheme, an initiative to encourage people to cycle to work. It is a super scheme. The health and environmental benefits are obvious but there are also significant financial incentives:

  • Reduced commuting costs
  • No parking costs – we are lucky that our offices at George House, North Hanover Street, Glasgow benefit from a secure and covered bike shed (and shower facilities!) – most places of work will have somewhere to park a bike at no cost.
  • Most significantly, employees typically save at least 30% on the cost of a new bike and accessories.

This is how it works:

  • The employer pays for a new bike & accessories (up to £1000) and retains ownership.
  • The employee hires the bike by a monthly salary sacrifice from their gross pay over an initial hire period (usually 12 months).
  • The employee then pays a nominal final amount (3%-7% of the initial cost of the bike) and after a secondary “hire” period (no further payments) ownership transfers to the employee.
  • The employee still earns the same amount. Deducting payments from gross salary rather than net salary is how the cost savings are achieved.

Most bike shops participate in the scheme and there are lots to choose from.

I joined the scheme recently and have been cycling to work since, so middle age and being dreadfully unfit are no barriers! My commute is about 4 miles and takes less than 20 minutes door to door. Glasgow’s roads are reasonably bike-friendly and there are extensive cycle lanes and paths to use. As I write my bike is in the courtyard waiting to be pedalled home.

Happy trails!