Category Archives: Probate

Probate fees

How will increased probate fees affect YOUR estate?

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 info@legalmatters.co.uk.

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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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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. See our Post “Should you use a lawyer to help administer an estate?” for more information.

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.