Monthly Archives: October 2018

Administer an estate

Should you use a lawyer to help administer an estate?

Losing someone you love is never easy. And, for families faced with administering an estate, it can be even harder. At such times, the support of a professional can help to reduce the burden.

Many people seek professional help when grieving. Not least because, the pressure of administering the financial affairs of a deceased loved one can be overwhelming.

Even the most organised of us might not cope well. Particularly as, for many people, looking after themselves and their family takes up most of their time.

When someone dies, it’s not uncommon for family disputes to arise. This can happen regardless of the size and complexity of an estate (the money and possessions left by the deceased). But, having a neutral party you can turn to for impartial, professional advice can help to relieve any tension and stop it from escalating.

What is involved when administering an estate?

Probate is the legal process for dealing with the distribution of a person’s estate after they have died. There are many duties and obligations under Probate, including:

  • Getting a Grant of Probate (where there is a Will)
  • Interpreting the Will correctly
  • Making sure you are working from the right Will
  • Ensuring the Will is carried out correctly
  • Identifying all of the assets of the estate
  • Correctly valuing the assets
  • Identifying and settling the liabilities of the estate
  • Establishing how much the estate is worth
  • Ensuring that the estate is appropriately managed
  • Opening an executor’s bank account to hold estate funds during the administration period
  • Looking after unoccupied properties (e.g. making sure they are insured)
  • Preparing tax returns for Inheritance Tax, Capital Gains Tax, Income Tax and Stamp Duty Land Tax
  • Placing Trustee Act notices to advertise for creditors to come forward.

Sometimes this process can get contentious and lead to unwelcome and stressful family disputes.

Do you need professional help?

You can administer an estate without a lawyer, however expert advice can be hugely valuable. Dealing with an estate can be a complex and emotionally challenging process, but you need to stay focused. Not least because, without legal expertise, errors and delays are not uncommon.

Crucially, if you make a mistake or fail to administer the estate in an efficient and timely manner, you could be held personally liable. Professional advice will make sure you are supported and protected.

To find out more about how we can help, take a look at the Estate Administration section on our website, or speak to one of our expert team. Call us at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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Protecting a disabled child

Include a Trust in your Will to protect disabled children

If you have a child with a disability, planning for their future is vital. While it is understandably difficult to imagine a time when you won’t be around to care for your child, you will want to ensure that they are taken care of.

By including a Trust in your Will, you can provide for your disabled child when you are gone.

A Trust is often a better option than just leaving a specified amount in a Will. Especially where:

  • Leaving your child with a large amount of money could put them in a vulnerable position. For example, making them a target of abuse from others
  • Where your child is not able to deal with their own finances
  • Where your child could lose their means-tested benefits.

Of course, you could leave all your money to someone you trust, on the basis that they look after your child. But this option is fraught with difficulties.

Firstly, you never know how someone’s changing situation and finances (e.g. divorce, bankruptcy, etc.) could impact your child. Secondly, if they die, their estate could go directly to their children (or other beneficiaries), leaving your child with nothing.

Establishing a Trust helps to avoid such uncertainties and ring-fences the inheritance earmarked for your disabled child.

Trusts in Wills

When you create a Trust, you can establish in the terms in your Will.

There are different types of Trusts and they each work in different ways. It pays to speak to a solicitor to ensure the right Trust for your circumstances.

Where a disabled child is involved this could be a Disabled Person’s Trust.

Disabled Person’s Trusts

A Disabled Person’s Trust lets you leave some or all of your estate to a beneficiary who is unable to manage the inheritance themselves.

You establish the amount of the Trust and the people you want to manage the inheritance on behalf of the disabled beneficiary. These people are called the Trustees.

You can also leave a Letter of Wishes stating how you would prefer the Trust to be used. This will help the Trustees to carry out their duties as you would want.

A Disabled Person’s Trust does not affect any means-tested benefits, and the money cannot be used to pay off any debt (or be considered an asset in a divorce etc.). Furthermore, your child cannot be coerced into giving away the assets in the Trust or using the money for other purposes.

If you have a disabled child and would like to protect them in your Will, speak to one of our expert team by calling legalmatters on 01243 216900  or email us at info@legalmatters.co.uk.

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Finding beneficiaries

How to search for missing beneficiaries

When someone dies, the person administering the estate needs to let the beneficiaries know what they are entitled to.

All too often, beneficiaries are challenging to track down. And that can have a significant impact on the probate process.

Finding an identified beneficiary

If you know the name of a beneficiary (for example, if they are mentioned in the Will), then the process of locating them isn’t usually too difficult.

Things you can do to find them include:

  • Placing a note in the newspaper
  • Asking family members and friends to help
  • Using a Tracing Agency.

As an executor, you must make reasonable efforts to try and find them, so it is worth speaking to your solicitor if you are struggling to do so.

Finding an unknown beneficiary

According to the latest figures, there are currently almost 9,000 unclaimed estates in the UK. And the total amount of this unclaimed inheritance could be worth billions.

In many cases, these estates remain unclaimed because the deceased did not leave a Will, and it is unclear if there are any living relatives entitled to this inheritance.

Under the UK’s inheritance laws (Rules of Intestacy), when someone dies without a Will, people who are blood relatives of the deceased could be entitled to a share of the estate. Even distant relations could be in for a windfall. However, if no heirs are found the estate will be passed on to the Government (the Crown).

It can be difficult to establish who the beneficiaries are, but your probate solicitor will be able to help. Often this involves you pulling together a family tree and using a Tracing Agent to do the rest.

It’s not enough to find any living relative, they have to be the right person to benefit under the Intestacy rules.

Where a beneficiary can’t be found, you may have to administer the estate regardless. But, you must ensure you are protected in case someone comes forward at a later date and makes a successful claim on the estate.

To protect yourself from liability you could:

  • Obtain insurance specific to this situation
  • Apply for a Court Order to determine how the Estate should be distributed
  • Make a payment to the Court under S.63 Trustee Act 1925 (leaving a nominal sum in an estate).

Ultimately, you are financially liable for searching for missing beneficiaries, so specialist legal advice is strongly recommended.

To find out how we can help, take a look at the Estate Administration section on our website, or speak to one of our expert team. Call us at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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Prepare for later life with an LPA

The majority of people are not prepared for later life…

According to the latest figures, from the office of National Statistics, while they are rising in popularity, fewer than 1 in 10 adults have made a Lasting Power of Attorney (LPA), suggesting that the majority of people are simply not prepared for later life.

An LPA is one of the best ways to protect yourself and your wishes, should you become unable to make financial or health decisions for yourself.

There are two kinds of LPA, a Property & Financial Affairs LPA and a Personal Welfare LPA. Both deal with very different matters.

However, according to the latest figures from the Office of the Public Guardian, there were only 1.4 million Financial LPAs registered in 2016, and 600,000 Health and Welfare LPAs.

People are living longer than ever before

In the UK, the number of people who reach their 85th birthday is expected to double by 2045. At the same time, the Alzheimer’s Society predicts that there will be more than two million people with Alzheimer’s by 2051.

As such, the prospect of being unable to make decisions in later life is one which more of us will have to consider. So, it is more important than ever to plan for later life.

However, while the number of LPAs is rising quickly, many people are failing to make a LPA because they are unsure about what it involves and why it is needed.

You will find some very straight-forward information from Age UK here.

The importance of later life planning

With an increasing number of seniors set to live on into their eighties and nineties, we are likely to see a corresponding rise in people who are no longer able to make decisions for themselves. And, even where people trust that their family will look after them, without any guidance this can be hugely stressful for those left to do so (and cause disagreements between those closest to them).

An LPA can go some way towards managing this problem. With an LPA, you appoint a trusted relative or friend to become an ‘attorney’ and look after your financial affairs, or make decisions about your care and medical attention when you are no longer able to do so yourself. You can also include specific instructions to help them make decisions you would approve of.

Don’t leave it too late

However, when it comes to making sure you are fully protected, planning in advance is crucial. If you put it off indefinitely then you run the risk of not being in a fit state to understand and sign an LPA.

To find out more and to protect yourself if you become unable to manage your financial affairs, and to make informed decisions about your long-term health arrangements, take a look at our Estate Protection services or speak to one of our expert team. Call us at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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Are you a Homeowner? Concerned about Inheritance Tax? Read on…

Holding your properties as tenants in common is a simple change to the way your property or properties are held which can save you thousands of pounds.

But what does this mean? This article aims to explain the legal terminology of tenants in common in plain English and how it could benefit you.

How tenants in common works
Most couples own their homes as joint tenants, meaning they both own the whole home. Holding the property as tenants in common means that each owns a share of the property, either a percentage or half each. This protects the agreed share for couples who have put unequal deposits into a property. If parents are gifting deposits to their children, it is also a way of easing fears in case of a break-up or death.

In the case of tenants in common, one partner can leave their share of the property on death whilst allowing the other partner to continue living there, passing the remaining share on death. It can also prevent your home being sold in the event you need to go into long term care.

Tax implications
There is no Inheritance Tax (IHT) for assets left in a Will to their spouse – in other words the surviving partner doesn’t have to pay IHT. After the remaining partner dies, the beneficiaries of their estate, usually the children, do have to pay IHT.

The rising cost of houses means that one property alone can put the estate over the IHT threshold. If the house is owned as joint tenants, both own the whole property. If one partner dies, the other automatically becomes the sole owner of the home. In the case of tenants in common each person owns a share of the house, usually split half and half.

Joint owners can split their home in two, therefore benefiting from tenants in common. By doing so, the half belonging to the person who passes away first, would be inherited by the beneficiaries immediately.

Provided the half is worth less than £325,000 – the current IHT threshold, no tax will be due. When the remaining partner dies, their half, inherited by the same children, could be under the threshold which again would mean no IHT is due.

Making it happen
You’ll need to inform Land Registry of the split and also write to each other to specify your intentions of the split.

As providers of Wills, Lasting Powers of Attorney and Trusts we can take care of all of this on your behalf. For further information or to arrange an appointment please call one of our expert team at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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