Category Archives: Estate Administration

Thank you!

When “thank you” means so much…

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.

selling a house

Selling a home when someone has died…

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 info@legalmatters.co.uk. 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.

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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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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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Unclaimed estates in the UK could be worth billions

Unclaimed estates in the UK could be worth billions!

According to the latest figures, there are currently 9,254 unclaimed estates in the UK. With the average value of an estate worth around £150,000, the total amount of this unclaimed inheritance could be worth billions.

Property, money, personal belongings and other assets are being left in limbo instead of being passed on to relatives or friends. To prevent this from happening, it is vital to make a Will.

What happens when you die without a Will?

When someone dies without a Will, and there are no known heirs, their estate will be passed on to the Government (the Crown). Unclaimed assets include property, including buildings, money and personal possessions. And, while in some cases these unclaimed estates are of very little value, they can be worth millions.

Every day the Government publishes an updated list of unclaimed estates. The newest estates are added to the top of the list. An estate remains on the list for a maximum of 30 years, and during this time, relatives can make a claim against it. However, where no heirs are found, the estate is eventually transferred to the Treasury.

Who can claim an estate?

Under the UK’s inheritance laws (Rules of Intestacy), people who are blood relatives of the deceased could be entitled to a share of an estate. Even distant relations could be in for a windfall. However, partners are not recognised if they were not married or in a civil partnership and neither are stepchildren.

If you want to make a claim, you will need to contact the Government’s Bona Vacantia Division (BVD) with a family tree detailing how you are related to the person who has died. You may be asked to prove how you are related to the deceased, so the more details you can include (e.g. birth and marriage certificates), the better.

While this process is complex and can take a long time, with millions going unclaimed the result could be worth it.

Avoid leaving an unclaimed estate

The best way to make sure that your estate doesn’t end up going to the Government is to create a Will. Making a Will is especially important if you have no or few living relatives. But despite the importance of having a Will, too many people never get around to this inexpensive and simple task.

You don’t have to leave your estate to your family. You can decide to leave your home, money and possessions to whoever you want, including friends and charities. But, only by creating a properly drafted Will can you be sure that your estate will be left as you choose when the time comes.

To make sure your estate is passed on in line with your wishes, or to dispute a Will, speak to one of our expert team at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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Our house

What happens to your house when you die?

While you might think it is easy to leave your house or flat to someone you love, bequeathing property is not always as straightforward as you would think. So, how can you ensure that your home is passed on as you would like?

When someone dies and leaves behind a home, there are a few things that need to be considered. Some things you’ll need to think about include:

Is there an outstanding mortgage?

Unless insurance is in place to pay off a mortgage in full when someone dies, the monthly payment will still need to be paid. If the remaining mortgage is small, the beneficiary may be able to take on that debt. But, if there is a large mortgage outstanding, and the beneficiary cannot afford the repayments, the lender is likely to require that the home is sold.

Whether the deceased owned the legal title to the property

When someone owns a property, the legal title – registered with the Land Registry – will clearly show their name as the owner. If the property is not registered correctly, an investigation will have to take place to prove how the title passed to the deceased before it can be given to the intended beneficiary.

How the property was owned

In England and Wales, when a property is co-owned (e.g. by a husband and wife), the way it is registered will impact what happens to it when one owner dies.

There are two ways to own a property with someone else:

  • As joint tenants: This means both (or all) owners own 100% of the property. So, when someone dies their name is removed from the title and the home automatically belongs to the surviving co-owner(s).
  • As tenants in common: This means each owner owns shares in the property. These shares can be for the same, or different amounts. When someone dies, that person’s share can be left to someone other than the co-owner.

Is the property freehold or leasehold?

If a home is a leasehold, there will be an agreement from the freeholder (sometimes called the landlord) to use it for a set number of years. With a leasehold, there might be conditions on who can own or occupy the property, and this can prove problematic when leaving it in a Will.

If the property is freehold, things are more straightforward. The property and the land it is built on are owned outright and can be passed on however the deceased wished (as long as they are the sole owner).

Is there a Will in place?

If someone dies without leaving a Will, the state decides how your estate is distributed. Often this does not reflect what you wanted to happen. As such, the best way to make sure your house goes to those you want it to, is to write a Will.

For expert advice on amending or drafting a Will, speak to one of the team at legalmatters today. Call us on 01243 216900 or email us at info@legalmatters.co.uk.

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Bitcoins – are they properly covered in your Will?

Digital currency such as bitcoins are relatively new. However, they still form part of your estate when you die. They’re classed as “digital assets” similar to frequent flyer points or gaming credits. They might have dipped in value recently, but they are still worth money so you want to make sure they’re included in your will.

There are two key things to consider about this digital legacy.

The first thing relates to bitcoins being properly defined in your Will. If you already have a Will in place, you should check this. If they’re not covered, then you need to make an amendment. If you’re writing a new Will, then a professional Will-writer will be able to advise you on this from the start.

The other important factor to consider is how your beneficiaries are going to access your bitcoins. Passing on digital currency is more complex than passing on money stored in a traditional way such as a bank or savings account.

Bitcoins are stored in an encrypted electronic wallet which can be accessed only by an electronic key or password. Unlike banks and building societies, cryptocurrencies do not store names and addresses against the electronic wallets, so aside from the electronic key there is no way to identify who a wallet belongs to.

It’s vital then to make sure that you keep a secure copy of the key for your executors. Without it, it will be virtually impossible for them to access the wallet and the money will be lost.

You could consider entrusting the key with a secure storage service, in a safety deposit box or with your executor or a trusted family member. The main thing here is that it needs to be someone you trust as you are handing them access to your money.

For help with this or any aspect of Will writing, please give us a call at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk for further details.

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Estate Planning – Who’s Who?

There are some fairly obvious legal words used when writing a Will but here’s a definition of some of those which might otherwise be misunderstood.

Administrator (sometimes administratix for a woman) – the person appointed by law to settle the affairs of someone who dies without a Will, so usually their next of kin.

Beneficiaries – this is anyone – a person, organisation or charity – left an inheritance (legacy, gift, trust) in a Will, or if there is no Will, under the intestacy rules.

Substitutional beneficiary – if a beneficiary dies before the person making the Will, a substitutional beneficiary will receive a gift in their place.

Bereaved – those surviving the deceased.

Crown or Treasury – this refers to the Government. If you don’t have a Will and have no next of kin, the Crown receives your estate.

Deceased – the person who has died.

Dependents – anyone who is cared for by the person making the Will. It normally includes children, spouse or elderly/sick relatives.

Executor (sometimes executrix for a woman) – the person or people you choose to make sure the instructions in your Will are carried out. You can choose a family member, a friend or a probate professional. An executor may also be a beneficiary of the Will.

Guardian – someone named in a Will who is appointed to take parental responsibility for any children aged under 18 at the time of the person making the Will’s death. They are known as a testamentary guardian.

Issue – this refers to a person’s lineal descendants. So their children, grandchildren and great-grandchildren. It does not include step-children.

Personal Representative – a general term for anyone in charge of administering a deceased person’s estate. It could refer to an executor or administrator of the Will.

Power of Attorney – a Power of Attorney may be given by executors and administrators to probate professionals to allow them to sort the Will without having to ask the executors to sign everything.

Trustee – a person or a Trust corporation (such as a bank) appointed to administer any Trusts created by a Will or arising under the rules of intestacy (so when there is no Will).

Testator (sometimes testatrix for a woman) – the person making the Will.

Child of the testator – in law this refers to children of the testator and includes legitimate, illegitimate, adopted and some surrogate children, but not automatically step-children.

Wards of Court – orphaned children with no appointed guardians are made wards of court. The court then decides what happens to them.

Witness – you must have two witnesses to see you sign your Will. You must watch them sign it and they must also watch each other sign it. You can’t choose a beneficiary (or their spouse) to witness your Will.

It’s important to be clear when drawing up legal documents. Legalmatters can help, we’re always happy to discuss your needs or answer your questions. Call us today on 01243 216900 or email us at info@legalmatters.co.uk for further details.

Dog days are over…

What happens to your pets on your death

The UK is famously a nation of dog lovers. If you were to head out to any of our parks, woodlands or beaches on a crisp autumn afternoon you would encounter more canine friends than you could shake a stick at (which they would love). With over 8.5 million (just over 24%) of households owning a veritable smorgasbord of breeds, our four-legged friends are as much a part of the family as our own flesh and blood.

But what happens to our furry babies when we die? Rather callously, the Administration of Estates Act 1925 defines domestic animals as ‘personal chattels’ and can be gifted in your Will in the same manner as a toaster, or the family grandfather clock. In the eyes of the law, your pet may be considered as tangible personal property but as a living, breathing and much-loved addition to your family it is important to give proper consideration when setting out what happens to them. So what should you consider?

Who gets Rex?

Whilst many family members would be happy to accommodate your pooch for a weekend, asking them to take full ownership may well be a different story. Ensure that you speak with potential friends or family members to be certain that they are happy with having your pet(s) on a permanent basis.

As with any gifts in Wills, it is always helpful to consider a plan B should you first choice no longer be in a position to take on the responsibility of your pet. A substitute beneficiary can be drafted to step in. Alternatively, charities such as the RSPCA’s Home for Life and The Cinnamon Trust run rehoming schemes and provide long term care for pets whose owners have died, if there are no other individuals who you are able to draft in.

What about costs of care?

Maintaining an animal can be an expensive business. Food, insurance and general health costs (flea/worming treatment/annual vaccinations) all add up. Leaving an additional cash legacy to the beneficiary tasked with taking on your pets in a great way of ensuring that your pet is looked after without any financial detriment to the beneficiary. In addition, it may be more of an incentive for the individual to agree to having your pet if they do not have any financial pressure to meet bills from their own pocket.

How to put this into practice

The correct wording of a legacy (whether canine or otherwise) is essential to ensure that a gift is properly dealt with. It is ALWAYS advisable to consult with a solicitor to ensure you wishes are adequately put in place. The proper, legal, drafting is necessary as any incorrect provision may fail. Your pet cannot individually receive a legacy (as they cannot provide a legal receipt) and as such any clause stating eg “£5,000 to Rover” just won’t work.

Legalmatters is always happy to discuss your needs for your dogs (or cats, or indeed any other animal) and help get the correct provisions in place.  Whether your best friends are diamonds or dogs, we can help you with your arrangements by drafting the necessary claws (never one to pass up the op-paw-tunity for a pun).

The Forsyth Saga

Last Friday, news broke of the sad death of Sir Bruce Forsyth. The former Strictly Come Dancing host and all round National Treasure passed away at the age of 89, following a lengthy battle with illness. 

Reports in various national papers have since detailed the star’s alleged estate planning which, according to ‘a friend’, was done in an effort to “avoid it being gobbled up by the taxman”. By all accounts, Sir Bruce has left all of his £17million estate (didn’t he do well?) to his wife outright where it has then been widely reported that his widow Wilnelia will then “be able to transfer up to £650,000 to each relative tax free to avoid inheritance tax”.

Whilst is it true that legacies to spouses are free from inheritance tax by virtue of the spousal exemption, legalmatters shakes its head at the level of misinformation reported. Quite frankly it doesn’t even know where to start with dissecting what a flawed and short-sighted piece of alleged tax planning this represents, but here goes.

So what is the actual position (if indeed these were his wishes) and why might it be regarded as a potentially reckless and ineffective idea?

First of all, the tabloid press have been quoting the figure of £650,000 supposedly available for Wilnelia to generously distribute ‘to each relative’ once Sir Bruce’s legacy has been transferred. Each relative!?! If this was the case, then the majority of estate planners would be out of a job and considered, surplus to requirements.

It would appear that the press have confused the level of transferrable nil rate band available to the surviving spouse on death with what an individual is able to give away tax free during their lifetime. Whilst Wilnelia would indeed be able to benefit from her late husband’s inherited nil rate band of £325,000 to combine with her own on her death, her late husband’s nil rate band is not something that she would be free to make use of during her lifetime. The articles also totally disregard the newly established ‘residential nil rate band’ that this tax year alone would have increased the late entertainer’s tax free allowance by an additional £100,000 (but latterly would allow a combined nil rate band of £1,000,000 if left to lineal descendants).

Any legacy left to a spouse is free of tax by virtue of the spousal exemption. Wilnelia is, of course, free to make gifts to whoever she likes during her lifetime. As long as she were to live another 7 years following such gifts (of any monetary value) these would also be inheritance tax ‘free’. Quite honestly, she could gift the full £17 million equally amongst his 6 children (or whoever she so wishes) as soon as she had received the monies from probate, should she be so inclined, but therein lies the issue.

If indeed this is the arrangement, there is NOTHING obliging Wilnelia to carry out the ‘wishes’ of her late husband. Outright gifts by their very nature, leave the recipient free to do whatever they like with the legacy. Despite ‘wishes’ or ‘instructions’ from the deceased, there is nothing legally binding to see that these are fulfilled. The deceased is simply requesting the recipient to make distributions and is hoping that this will be carried out. Whilst this level of trust is admirable, the private client practitioner knows more than most that trusting your relatives to ‘do the right thing’ on your death is a dangerous assumption.

Let us assume that, despite having no legal obligations to do so, the recipient of the legacy has every honourable intention of making these posthumous gifts. They themselves would need to survive another 7 years which is always a risky proposition. What instead, if they were to lose mental capacity and unable to make such transfers? Michael Schumacher’s tragic accident and resultant circumstances have shown that age, wealth and level of fitness have nothing to do with a lack of mental capacity and inability to manage your own affairs. How can we be sure that Wilnelia shall live a long and untroubled life, free of illness and incapacity? Her ability to make gifts from her late husband’s fortune and to therefore share the wealth and to reduce her own liabilities to inheritance tax is dependent on her being mentally fit and well; certainly, any attorneys that she may have appointed won’t be able to undertake such tax planning ventures without court authority (another common misconception).

So what might Sir Bruce have done to make provision for his children and grandchildren (and indeed he could well have done, because we are commenting on the reporting, not on actual events)?

Lifetime gifting would have been the best starting point. If carried out wisely and cautiously, after careful advice and taking all needs of the parties into due consideration, then lifetime gifting is an excellent way of reducing your tax bill.

And what about the use of trusts? Despite trusts having their own particular tax regimes, they are immensely useful structures to protect and preserve assets against unknown circumstances. Tax shouldn’t necessarily always be the driver, particularly where significant wealth is concerned.

Finally, any charitable giving would have the double benefit of not only being exempt from IHT for the legacy itself, but it could also have reduced his IHT rate to 36% if he had left 10% or more of his total estate to charity. A Brucie bonus if you will.

For the papers to glibly report that Sir Bruce has ‘in one fell swoop’ cannily avoided inheritance tax and at the same time ensured that his wealth lands where he would wish is, in our humble opinion, grossly underestimating the risks and potential issues at hand and is in any event based on apparent mis-reporting of the facts.

Make sure that your wishes are adequately enshrined in the correct, binding, legal documents as the road to court is paved with good intentions. Nice to sue you, to sue you, nice. Speak to a member of the team at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk to find out more.