Monthly Archives: November 2019

Jointly owned property

Leaving a jointly owned property in your Will

If you own a property jointly with someone else and you want to leave it in your Will, you need to understand the different types of joint ownership.

When you buy a home with someone else, you will either own it as joint tenants or as tenants in common. This affects who the property will pass to in the event of your death.

Joint tenants

If you own a property with someone else as joint tenants, then on the death of either of you, the property automatically passes to the other, whatever the terms of your Will.

Tenants in common

If you own property as a tenant in common with another person, then your share in the property will pass in accordance with the terms of your Will.

This type of ownership also allows you to own a property in unequal shares. If you hold a property as a tenant in common, you should ensure you have a valid Will in place so that your interest passes to your choice of beneficiary.

If you don’t have a Will

If you haven’t made a Will, then your share of any property owned as a tenant in common will pass in accordance with the rules of intestacy. This leaves your estate to your closest family members, in strict shares.

If you are married, then your spouse will receive the first £250,000 you leave, together with all of your personal possessions. Of the remainder, half goes to your spouse, with the other half being split equally between any children.

Leaving a life interest in your home

If you own a property jointly, you might want to leave your share to your children, but allow your spouse or partner to live in the property during the rest of their lifetime.

This can be done by severing the joint tenancy, if there is one, and setting up a life interest trust in your Will. It means that the joint owner won’t have to leave the property, but once they no longer need to live there it will pass to the beneficiaries named in your Will.

This prevents any children being disinherited in the case of second marriage, and can also protect your share of any property from care home fees that the co-owner may incur in later life.

Whatever method of property ownership you have, it is always advisable to put a Will in place so that you can be sure your loved ones benefit from your assets after your death. It can also prevent disagreements arising between family members.

If you would like to talk to one of our expert lawyers, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Executor vs Trustee

The different roles of an Executor and a Trustee in probate

As well as naming the people who are to receive money from your estate, a Will can make various appointments, including those of Executor and Trustee.

When you make a Will you need to consider who you would like to administer your estate and be responsible for any money that is to be held in trust. These can be onerous roles and you should be aware what they involve so that you can discuss them with the people you would like to act on your behalf.

The role of Executor

An Executor is responsible for the administration of an estate in accordance with the terms of the Will. Duties are likely to include making funeral arrangements, valuing assets, collecting them in, arranging for their sale, calculating tax payable, drawing up estate accounts and distributing the estate to the named beneficiaries.

The job can be extremely time consuming, particularly if the deceased held a variety of assets with various stakeholders. Each will need to be notified and will have their own requirements for releasing funds. If there is a property, it will need to be insured, valued, cleared and a sale arranged.

Debts will need to be paid, including Inheritance Tax, which the Executor will be responsible for calculating, based on the value of the estate.

Because the job of Executor can be difficult and they will be personally liable for any errors they may make, you should discuss it first with anyone you might wish to appoint. If you do not have anyone who is willing and able to act, you can choose to appoint a professional executor. This is someone such as a probate solicitor who is experienced in the winding-up of estates and who will be able to prepare the necessary tax returns and estate accounts.

The role of Trustee

If your Will creates a trust, then you also need to appoint Trustees to administer it. You may want to leave money to children under the age of 18 or leave a life interest in a property or a sum of money to a spouse or partner.

A Trustee’s role can include dealing with the investment of money as well as taking decisions as to where it should be spent. For example, a child’s guardian may ask for a contribution towards maintenance or education and the Trustee will need to consider whether the request is reasonable and in accordance with the intentions of the deceased.

As well as looking after the assets included in the trust, a Trustee will also need to keep clear records and prepare accurate trust accounts.

The role of both Executor and Trustee can be demanding, with consequences for inadequate performance, so it is essential that your chosen appointees understand the job they are taking on and believe they are capable of carrying it out.

If you would like to talk to one of our expert probate lawyers on on 01243 216900 or email us at info@legalmatters.co.uk.

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Premium Bonds

What happens to Premium Bonds after someone dies?

If Premium Bonds form part of someone’s estate, they must be dealt with in accordance with the National Savings & Investments (NS&I) rules.

Many people hold Premium Bonds among their financial assets. They are issued by NS&I, a Treasury-backed government savings scheme.

The minimum investment is currently £25, although older Bonds may be for smaller sums. Each £1 unit has a unique number and is entered into a monthly prize draw, with a chance of winning an amount of £25, £50, £100, £500, £1,000, £5,000, £10,000, £25,000, £50,000, £100,000 or £1,000,000. There are usually two prizes of the highest sum, around 6 x £100,000, and increasing numbers of lower prize winners, depending on the amount of bonds in any particular draw.

No interest is paid on the Bonds, and the chance of any £1 unit winning is 1:24,500. A maximum holding of £50,000 is allowed.

When a Premium Bond owner dies

NS&I have a death claims form available via their website which will need to be completed by the executor or administrator of the estate and returned to them together with a Registrar’s copy of the death certificate and a certified copy of any Will.

Premium Bonds cannot be transferred to a new owner. On death, there is the option of leaving them in the draw for up to a year following the date of death, or they can be encashed.

If they are left in the draw, then any prizes are either paid to a beneficiary, if one has been named, or accrue to the estate.

If the beneficiary of the funds wants to invest in Premium Bonds, they would have to buy them in their own name. It is not possible to own Premium Bonds jointly with anyone else.

A Grant of Probate or Letters of Administration is required by NS&I if the amount the deceased held with them exceeds £5,000. This includes other NS&I assets such as Savings Certificates.

If the amount held is below £5,000, then NS&I will not need to be provided with a Grant of Probate or Letters of Administration, but it may still be needed for other assets held by the deceased, depending on their value.

Is tax payable on Premium Bonds?

No Income Tax or Capital Gains Tax is payable on Premium Bond winnings, however the value of any Bonds held by someone is included in their estate for Inheritance Tax purposes.

If you would like to discuss Wills or probate with one of our expert team, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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right choice

Choosing the right Executor for your Will

When you write your Will, you need to name one or more Executors who will carry out the administration of your estate when the time comes. We look at what this entails and what you need to take into account when choosing someone to take on the role.

The Executor to an estate has the job of bringing the deceased’s affairs to a close and distributing funds to the named beneficiaries. The task can be daunting and take many months, even years, so before appointing someone you both need to understand exactly what it entails.

The role of an Executor

There is usually a substantial amount of work involved in winding up an estate. Initially the funeral needs to be arranged and the death registered.

Asset holders need to be notified and the estate valued. Inheritance Tax should be calculated and paid, as well as any Income Tax that may be due.

Assets need to be valued, collected in and sold, to include any property, which may need to be cleared and insured in the meantime.

Estate accounts must be prepared and finally the estate is distributed to those named in the Will.

Choosing the right Executor

The Executor can be held personally liable for any mistakes made during this process, so it is important to ensure that the person you have chosen is willing to take on the role and capable of carrying it out proficiently.

Your executor should be aged 18 or over and have the mental capacity to act on your behalf.

More than one Executor

It is usually recommended that at least two Executors are appointed in a Will so that if one of them is unable or unwilling to act when the time comes, you still have someone else who can take on the role.

Two Executors can act jointly, or one can step back when the time comes and allow the other to do the work alone. You can also name a substitute Executor who would only act if one of those named could not.

If you don’t have anyone who can act for you

If you don’t have anyone willing or able to take on the task, you can appoint a professional Executor, such as a probate solicitor, to deal with the administration of your Will.

They will be familiar with the process, able to correctly calculate tax due and draft accurate accounts. A charge is made for the service, but it does mean that your loved ones will not have to struggle with complicated and sometimes frustrating paperwork following your death.

If you would like to talk to one of our Wills and Probate specialists, ring us on on 01243 216900 or email us at info@legalmatters.co.uk.

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