Many families will have to pay more in probate fees from April 2019. That’s according to new proposals that see a hike in the cost of applying for probate.
The Government has claimed that fees are necessary to fund an effective and fair court and tribunals system. However, under the plans, some grieving relatives will have to pay death taxes of up to £6,000 to secure legal control over a deceased’s estate.
What are the main changes?
At present, the current cost of securing probate is £215, or £155 for families who use a solicitor. But, under the new plans, the Government has linked the charge to the size of the estate. This means that:
- Inheritances of less than £50,000 will be exempt (the current threshold is just £5,000)
- Estates valued between £50,000 and £300,000 will pay a fee of £250
- Those between £300,001 and half a million pounds will now pay £750
- Estates between £500,001 and a million will pay £2,500
- The cost could go up to £6,000 for estates estimated at over £2 million.
The reforms will also make it easier for grieving families to make the application online while helping people lacking in computer literacy.
Are the changes fair?
While it might seem fair that larger estates have to pay more, these fees must be paid upfront by loved ones (who might not have access to this kind of money).
This also fundamentally changes the fee-structure for applying for probate. Until now, the cost has existed to cover the average costs of making a grant of probate. However, the new fee structure is hugely disproportionate leaving some people to argue that it is actually a “stealth tax”.
However, according to the Government, the new banded fee model represents a “fair and more progressive way to pay for probate services compared to the current flat fee”. It also argues that, for those who do pay, “around 80% of estates will pay £750 or less”. It has said that fees will never be unaffordable and that options will exist to help families choose a way to pay which suits their circumstances.
Nevertheless, with assets from an estate frozen until the executors receive the grant of probate, questions still exist over how some executors will manage to pay the probate fees. Especially for people who may have little money in the bank, despite valuable estates and properties.
To find out more about how the new probate fee structure could impact your estate, speak to one of our expert team by calling 01243 216900 or email us at email@example.com.
When you own a business, not using a professional lawyer to draw up your Will is almost always a mistake.
Failing to cover all your assets and not considering issues around inheritance tax, executors and trusts are two common mistakes made with a DIY Will. But even the smallest of mistakes could render a Will invalid – such as if it’s witnessed by the wrong people or number of people; if it’s not signed or dated in the right place.
Having a valid Will in place is essential if you want the final say in what happens to your business and other assets after you die.
If you die without a Will, or if it’s invalid, everything you own – including business and non-business assets – will be distributed under the laws of intestacy. Which means that you or your loved ones will have no say as to who inherits. To avoid your assets being dealt with under the rules of intestacy, your Will should detail what will happen to your business shares.
When you die, any shares or interest you own in a business become an asset of your estate. Without a Will, these shares could be sold, the company could be broken up, or it could run into trouble without the correct day-to-day management in place.
For example, you might know who you want to inherit your business after you die, but what happens if there’s a tragedy and these people don’t survive? A professional solicitor will know what questions to ask to make sure that your Will covers all situations.
Take a look at the package “Business Wealth Protection” which we’ve put together specifically for business owners. We will look at all eventualities and the Will we draft for you will include a trust and letter of wishes to ensure that inheritance tax is handled in the most cost-efficient way.
In some cases, you might already have a partnership agreement or company papers in place that set out what will happen to the business after you die. These types of contracts are usually put in place if more than one person owns a business and you want the company to continue after your death. You should also consider whether you need a business lasting power of attorney. We’ll help you decide what legal documents you need to draw up in order to carry out your wishes and best protect your business and your loved ones.
It is always important when drawing up a Will that it is done correctly, and for business owners this is more complex. We can help guide you through the process. Just speak to one of our expert team by calling legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
Inheritance tax is a tax that, if due, is payable upon a person’s death. Whether it needs to be paid depends on how much the deceased person’s estate is worth, and who is inheriting.
When does inheritance tax need to be paid?
If the total value of an estate is over £325,000 (nil rate band), then inheritance tax will need to be paid. It is charged at 40% on any amount over £325,000.
What is included in a person’s estate?
An estate includes all of the assets which the deceased owned or was entitled to on the day they died. This can include things like property, money, shares, investments, pensions, and possessions.
How can you reduce inheritance tax?
There are exceptions which can help to reduce inheritance tax. For example:
Spouses and civil partners are exempt beneficiaries. So inheritance tax does not need to be paid, regardless of how much an estate is worth.
Where at least 10% of an estate is left to charity, inheritance tax can be paid at a reduced rate of 36%. Where the whole estate is left to a charity, inheritance tax does not need to be paid at all.
Transferable nil rate band
Everyone is entitled to a nil rate band for inheritance tax. Assets that pass from one spouse or civil partner to another are exempt from inheritance tax. So, if someone dies and leaves everything to their spouse or civil partner, they won’t use any part of their allowance. This can be transferred to the second person’s estate leaving a nil rate band of up to £650,000 when they die.
Residence nil rate band
This is available in addition to the inheritance tax nil rate band. It is possible when a home is passed on death to a direct descendant. In 2018-19, if a property is left to children or grandchildren a residence nil rate band of £125,000 can be added to the original nil rate band. So the total threshold will increase to £450,000.
Transferable residence nil rate band
The residence nil rate band can also be transferred between spouses and civil partners. This only applies if the deceased had a spouse or civil partner who died before 6 April 2017, or if they died after this date but did not use all their available residence nil rate band.
Inheritance tax comes out of the estate funds. It is payable by the person who is dealing with the estate (the executor or administrator), and they can be held responsible for any errors in payment.
Find out about our Inheritance Tax Planning service on our website here: https://www.legalmatters.co.uk/inheritance-tax-planning.php. Call us on 01243 216900 or email us at email@example.com.
It’s a tough time when somebody you care for dies and we’re pleased when we’re able to lighten the load. At such a tough time when there’s such a lot to do, it’s a delight when clients takes the time to say thank you:
“I’d like to say a big thank you to yourself and your firm for all your help and support over the last few months!! It’s much appreciated. Thank you.” Darren & family
Thank you too, Darren. We’re glad that everything is now settled. Good advice in a supportive and caring manner is what we like to give.
There may be times in your life when you’re unable to manage your own personal affairs. Sickness, injury, old age and short-term incapacity can leave you unable to make decisions about your wellbeing.
While a daunting thought, in advance of these circumstances, you can grant legal authority to someone you trust to make a decision on your behalf.
This is done by completing a Lasting Power of Attorney (LPA) and it legally authorises a designated individual or individuals to take care of your personal matters for you.
Two types of LPA
You can apply for a Health and Welfare LPA or a Property and Financial Affairs LPA. Often, both are applied for together, allowing the attorney to make a decision in both areas and protect the overall wellbeing of their friend or family member.
The Health and Welfare LPA covers matters around your physical care and welfare. Your attorney may be required to make important decisions about any medical treatment you are given, your housing, your general care, and also whereabouts you are cared for. So it’s essential that you select a person you trust, and who will advocate for you when they are required to speak on your behalf.
When it comes to the Property and Financial Affairs LPA, the purpose of this agreement is to make a decision on your financial wellbeing and manage your finances day to day. This could include being responsible for your home, any financial assets, as well as your bank account and savings. It’s important to select someone who will manage your financial affairs soundly.
How to choose your Attorney?
Becoming an Attorney is a big responsibility, and it’s essential to choose someone that you trust. Whether Financial, Welfare or both, you need to be assured that they will behave with integrity, advocate for you when you are unable to, and make often difficult decisions that are in line with your values and instructions (which you can set out in your LPA). It’s worth noting that you can choose more than one Attorney and prepare a stand-in in the event that your original choice is unable to or fails to act.
What is a Certificate Provider?
A Certificate Provider is required to counter-sign your LPA. This protects potentially vulnerable people from being coerced into designating Power of Attorney to someone against their will. Typically, friends, neighbours or the medical community can provide this role. However, they are required to have known you for a minimum of two years.
How do I complete the paperwork?
It’s always smart to consult with a lawyer before you begin your LPA process. A lawyer will also ensure that your paperwork is registered with the Office of Public Guardian (OPG).
To find out more, why not download our “Free Guide to Lasting Powers of Attorney” or talk to one of our experts to learn how we can help you to create and register either or both kinds of LPA. Call us on 01243 216900 or email us at firstname.lastname@example.org.
There are many reasons for having your Will drawn up by a Solicitor. Here are 5 of our top reasons.
- Top of our list, making your Will is one of the most important things you’ll ever do.
Without a Will, how will you get to say who inherits your assets? For instance, without a Will, and where there are no known heirs, your estate will be passed to the Government. This could include property, money and personal possessions. Where there are relatives, under the UK’s inheritance laws (Rules of Intestacy), people who are blood relatives could be entitled to a share of your estate. Even distant relations could be in for a windfall. And partners may not recognised if you were not married or in a civil partnership. Neither are stepchildren.
- The need for clarity
So you’ve sensibly decided to draw up your Will. But if you’re thinking of creating a handwritten Will, then think very carefully about it. There are various legal requirements for a handwritten Will (also known as a ‘holograph’ Will).
For instance, it must be signed by the Testator (the person making the Will) in the presence of two witnesses. These witnesses must also sign the Will in the presence of the Testator. Furthermore, the Testator must understand that in doing this, they are creating a Will. So it needs to be a clear and final expression of intention about where assets should go upon your death.
That’s not always as easy as it sounds…
- Mind your language
For the Will to be legal, the correct language and terminology needs to be used. What might seem obvious to you might not be evident in the eyes of the law. And if you do it yourself, you’ll not know that until it’s too late, when the Will gets read, after your death.
Which leads us on to…
- Avoiding Disputed Wills
You don’t want your Will to be disputed after you die. But there are some common instances that lead to a Will being challenged:
- Changing family structures which often include unmarried couples living together and second families
- An ageing population and the increased risk of mental health and dementia
- Rising property values resulting in a growing number of estates worth contesting
- An increase in the number of people leaving money to charities.
A Will can be overruled following a challenge. Whether it is or it is not overturned, such disagreements about inheritance are usually devastating for those left behind, and often very expensive to resolve.
A carefully drafted Will would avoid this heartache…
- And finally, that most hated penalty, Inheritance tax
When you make a Will you’ll want to make sure that your beneficiaries don’t pay any more Inheritance Tax than they have to.
There are many ways to limit your liability, but unless you are an expert in this area, your beneficiaries could end up paying the taxman far more than is necessary.
Advice on how to distribute your assets in your Will can make the most of allowances and protect any vulnerable beneficiaries…
Talk to us about your Will. We are experts and can help you through the process. Call us on 01243 216900 or email us at email@example.com.
When a person dies, if they owned property in their sole name this will need to be transferred to a beneficiary or sold as part of Probate. Here are some things to consider if the home needs to be sold.
Applying for a Grant of Probate
Probate is the legal process for dealing with the distribution of a person’s estate after they have died. To start the Probate process, a Grant of Representation is required. The sale of the property cannot be completed until the Grant of Probate has been issued.
Getting the property valued
It is essential to obtain a proper valuation of the property; backdated to the date of death. To ensure an accurate figure, it is a good idea to get more than one valuation.
Get the contents valued
As well as the value of the property you should also consider its contents. This will need to be valued as part of the deceased’s Estate. You should also locate and secure any valuable items in the house (e.g. jewellery, share certificates etc.).
Protecting the property
One of the first things you should do is make sure that the home is secure. Particularly if it is empty. Check that it is safely locked up, and switch off the appliances and water. You should also remove valuable items that might be at risk of theft.
Make sure the home is insured
Under some insurance policies, a home is not insured if it is left sitting empty for a certain period. Likewise, the death of the policyholder could terminate the policy. Contact the home insurance provider to inform them of the situation and find out what you should do next.
Locate the Deeds
If the property was owned for several decades, the Title might not have been registered at HM Land Registry. In such situations, you’ll need the Deeds to prove ownership.
Let the relevant organisations know
As well as the insurance provider, you should also contact anyone else involved in the property. For example, the local council and utility providers.
Instruct an estate agent and conveyancing solicitor
You can put the home on the market while you’re awaiting the Grant of Probate. But be aware that it can take 3-6 months for a Grant of Probate to be issued (even longer in more complex estates).
Prepare the home for viewings
It is always a good idea to give a home a thorough appraisal before letting viewers in. Where appropriate, consider what needs tidying, fixing etc. to showcase the property at its best.
To help you through the Probate process, speak to one of our expert team speak at legalmatters. Call us on 01243 216900 or email us at firstname.lastname@example.org. We can take over the responsibility for you and make sure everything is carried out in line with the law, and the wishes of the deceased.
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 email@example.com.
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 firstname.lastname@example.org.
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 email@example.com.