Category Archives: Probate

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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Understanding Probate

Understanding Probate…

Probate is the process of sorting out an individual’s money, debts, property and possessions when they have passed away. If you’re appointed the executor of someone’s Will then you’re responsible for carrying out probate.

The probate process

There are 4 main stages of probate:

  1. Assess the total value of estate and if it’s liable for inheritance tax
  2. Apply to the Probate Registry for a Grant of Probate and submit an inheritance tax form to the tax office
  3. Pay off any inheritance tax due and swear an oath at the solicitor’s office or the Probate Registry
  4. Administer the estate by collating assets, paying off debts and distributing the remainder according to the Will.

You may choose to do probate yourself, although this can be very time-consuming. Many people choose to appoint a solicitor to help them along the way. Even though this comes with a certain cost, it could save thousands of pounds in the long-run by greatly reducing any potential mistakes made in the process.

There are some circumstances in which you’ll definitely need a solicitor:

  • The person died without making a Will
  • There’s a possibility the Will is invalid
  • The estate value exceeds the Inheritance Tax threshold because it’s still bringing in a regular income
  • The estate includes overseas property or assets
  • The estate may go bankrupt / is bankrupt
  • Some of the assets are held in a trust
  • Dependants of the deceased have been purposefully left out of the Will but may want to make a claim on the estate
  • The deceased lived outside the UK for tax reasons.

When is probate needed?

Probate is required if the deceased owned property including houses, land or buildings. Furthermore, if the person held assets with a certain bank then you’ll need to enquire about the bank’s threshold amount, as each bank sets its own limit. A Grant of Representation will be needed to claim assets from the bank or other financial institutions.

Probate without a Will

Sometimes a person may die without making a Will – this is known as dying intestate or intestacy. The law will decide how to distribute assets including everything from money to pets. Intestacy rules don’t tend to acknowledge unmarried couples, step children, step siblings and unregistered partners. As a result, it’s essential to make a Will during your lifetime, especially if your family includes any of these relationships.

If you’d like to discuss your Will, get in touch with us at legalmatters. Call us on 01243 216900 or email us at info@legalmatters.co.uk.

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The unspoken word: how to talk about making a Will…

There are many difficult emotions to deal with when someone dies. It can be made even more challenging if the details of the Will come as a surprise to loved ones left behind.

If an adult child or relation doesn’t inherit what they expected, they can see it as a sign that they weren’t loved or that others were loved more. Those sorts of hurts can run deep and cause anguish for years to come, sometimes leading to a Will being contested.

However, by simply talking about your Will in advance, all of this confusion and heartache can be avoided.

Of course, it can be a tricky discussion to have. Many people don’t like to contemplate their death and family relationships can be tricky at the best of times. However, by openly talking about your estate as well as how you’d like it to be distributed, you’ll be able to reduce the risk of problems emerging later down the line.

Here are our tips on how to go about it:

  1. Mention to your family in advance that you would like to discuss their inheritance.
  2. Talk to your family, individually and as a group.
  3. Prepare an outline of what you intend to do although be receptive to other’s views and consider changing your plans if someone has a better idea.
  4. Explain your goals – you may wish to leave some of your money to charity for example or put some aside for your grandchildren’s education. Explain why these matters are important to you.
  5. In general, it is best to treat your children equally. However, if one child has a special need or disability, and you feel it is your duty to leave more to them, ensure that your reasoning is made clear.
  6. Discuss your sentimental possessions and how you think that they should be distributed. Emotions can run high over these regardless of their value so take time to find out who would like what and try to reach a unanimous agreement.
  7. Be calm and tactful. Discussions such as these can be rewarding if children begin to reminisce over why an object is sentimental to them. However, they can also be tense and emotional so do take this into account.
  8. If you feel that this type of meeting may become argumentative, consider having a neutral party attend. This could be a respected family friend or a professional adviser such as your lawyer or accountant, particularly if they are going to be executor of the will as well.

Ultimately, what goes into your Will is personal, but a conversation about it now could save a lot of anguish at the probate stage.

If you are thinking about planning a Will, or would like to change an existing one, give us a call at legalmatters on 01243 216900 or email us at info@legalmatters.co.uk.

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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.

Selling A Property in Probate – Online vs High Street

Often when someone is left a property by a deceased relative, they will want to sell it quickly. This may be for emotional reasons, but there are also financial concerns to take into account too – maintenance costs can quickly mount up.

Given these difficult circumstances, what do you need to consider when selling a property in probate?

When can I sell?

You cannot sell the property until probate is formally granted. This will generally take around eight weeks, though there’s nothing to stop you putting the property on the market before that date.

Valuations

When the executor applies for the grant of probate, they will need to detail all of the deceased’s assets, with valuations. It’s therefore a good idea to get the property valued by a couple of different estate agents to give you a decent idea of what it is worth. Alternatively, you could get it valued by a surveyor.

Title and deeds

If the property has been registered with Land Registry, downloading a copy of the title entries for the property to ensure that it was in the deceased’s name, should be straightforward.

However, if it wasn’t registered then you will need to locate the paper title deeds.

How to sell it

Traditionally, high street estate agents have been the method of choice for selling property. However, recent years have seen the emergence of a number of big online estate agents, which may be worth considering.

One big plus point with online estate agents are the fees, which are usually much smaller than dealing with a high street estate agent. You will often only have to pay a single, flat fee with an online estate agent. However, with a traditional estate agent, the fee will be a percentage of the eventual sale price – on expensive homes, this can be quite significant.

There are downsides to online estate agents though – you may need to do the viewings yourself and sort out photographs to go with your property’s listing on the various property portals.

Remember, the fact that there is no chain involved with the property will be an added selling point too, as it should represent a relatively straightforward purchase.

Probate can be a difficult, stressful time so it is important to work with experts who can ease the burden.

At legalmatters we can guide you through every part of the probate process. Call us on 01243 216900 or email us at info@legalmatters.co.uk.

What If There Is A Death Tax Introduced

Before the snap General Election, the Government was planning to introduce a new fee structure for applications for Grant of Probate or Letters of Administration (for when someone dies intestate).

The new fees would have taken effect last month (May 2017), but the election has put these changes on hold.

When somebody dies, the executors must apply for a Grant of Probate from the probate registry.  This needs to be done to allow them to administer the estate according to the terms of the Will.

Previously, the fees for this application were set at either £155 if probate was applied for by a solicitor or £215 if it was applied for by friends or family. There were no fees if the value of the estate was less than £5,000.

If the Government were to now make the fee changes as planned, the first change would be that estates below £50,000 would no longer have to pay any probate fee. This significantly increases the number of estates exempt from the fees. Unfortunately, everyone else would see an increase.  Those with the largest estates would see fees of up to £20,000.

The fees would be tiered depending on the value of the estate.

£50k – £300k               –           £300

£300k – £500k             –           £1,000

£500k – £1M               –           £4,000

£1M – £1.6M               –           £8,000

£1.6M – £2M               –           £12,000

Above £2M                 –           £20,000

These fees would be in addition to inheritance tax.

The probate fees need to be paid up front. It may be difficult if the executor is not able to release cash from the deceased’s bank account and/or the executor is on a low wage or benefits. Previously they may have been able to apply to get help with the fees. However, the Government may also now remove probate applications from the general fees remissions scheme and financial help could no longer be available if all the scheduled changes were to go ahead.

If these changes were to happen, there are things to consider which may reduce the amount of probate needing to be paid. In particular, married couples or those in a civil partnership could consider the nature of any property ownership agreements they hold.

Another way to reduce the cost of probate is to consider setting up a Trust. This may lower the value of the estate (from a probate point of view) and drop it from a higher tier rate to a lower one. Trust law is complex. You will need advice from a qualified advisor to ensure that you are setting one up in the most tax efficient way, so that it doesn’t end up costing you more than you hope to save.

For advice on this or any aspect of planning a Will please call us on 01243 216900 or email us at info@legalmatters.co.uk.

Selling A Probate Property

Having to sell the home of a loved one, especially if it’s somewhere you have happy memories, can be poignant. Lucy Thomas shares a few pointers on how to make the process less painful…

The lion’s share of a person’s estate is normally their home, but at a time when family and friends are grieving, preparing the property for sale is often the last thing they feel up to. It’s a tough one because, unless you’re a millionaire, with the best will in the world that property needs selling – utilities and council tax bills have to be paid even though the house is unoccupied and then there’s the question of maintenance. Pipes burst and gardens become overgrown in empty properties.

My advice to clients in this situation is to speak to a few local estate agents (at least three) early on, to form an idea of the market – this has to be done anyway, to value the owner’s estate and assess whether inheritance tax should be paid. Then take a look at furniture and other household items – a rough lump sum of their worth will suffice for probate purposes but it’s probably a good idea to get any pieces priced at around the £500 mark professionally valued.

Undertaking that, admittedly often painful process, actually provides a good time to clear the house of any unwanted items too. In fact, some of my clients find selling or giving away a loved one’s things to a new home quite life-affirming.

As for the locks, change them. It’s unlikely the keys have been handed out to every Tom, Dick and Harry in the village but better safe than sorry.

Unless you’re a massive fan of Kirstie and Phil – when it comes to the question of updating a house pre-sale you may judge that you simply do not have the appetite for this. Yes, properties sell for less when the decor is old-fashioned but they often sell fast too, as buyers appreciate a home they can put their stamp on. It’s amazing how much more polished a house looks after a good, deep clean – often that’s enough.

If you do decide to take your time selling the property and don’t live nearby, it can be wise to find an agent to manage it. Also, you’ll have to look at insurance – most insurers will not pay out on a property that has been left unoccupied for over 60 (and in even more extreme cases 30) days.

To discuss this, or any of the other issues around selling probate property, call us now on 01243 216900 or email us on info@legalmatters.co.uk – we’re your local experts in will writing and probate. And remember that your loved one’s home is going to a good home – a new owner who will love, cherish and build their own lifetime of memories there.