Category Archives: Estate Administration

Probate changes

What changes have been made when applying for probate?

All estates of any deceased person need to go through all legal channels before the deceased’s assets can be distributed to all beneficiaries.

In England and Wales, this is referred to as the Grant of Representation and will be needed even if the deceased did not leave a Will. Any Will executor will need to apply for a Grant of Probate whilst anybody looking to administer the estate of those without a Will will need to apply for a Grant of Letters of Administration which will enable the executor to administer the estate under intestacy rules.

During lockdown, completing the administrative process of applying for probate has changed and executors or probate professionals will need to ensure they are adhering to the new system to avoid the form being returned and the process getting delayed.

At the end of March HM Courts and Tribunals Service introduced an eight week introductory period for a new standard grant of representation application forms. The introductory deadline lapsed on May 18 and all forms will now need to comply with the changes if they are to be processed.

The main change will see older iterations using ‘statements of truth’ obsolete and any forms sent after May 18 which uses this older system, will see their forms returned.

The new forms have been designed to digitize information from the start of the process, reducing the number of errors and creating a more efficient process as the new forms can be bulk scanned.

Three grant of representation forms have been redesigned. Any executor applying for probate will now use the updated PA1P form.

Those who are administering an estate without a Will and applying for a grant of letters of administration should apply for a PA1A form.

Anyone needs to apply for a caveat will need to use the updated PA8A form.

Services from legalmatters during Covid-19 pandemic

Here at legalmatters, we continue to do everything we possibly can to service our existing and new clients during these very difficult times.

Our ability to provide remote services makes us stand out from the crowd.  This means that you can deal with your will, power of attorney, probate, trust and tax advice etc all over the phone or by email and documents are sent to you by post.  We are also advising our clients on signature processes bearing in mind social distancing measures.

Meanwhile, the office continues to operate with minimal skeleton staff for the protection of our staff, clients and visitors, enabling us to still process physical documents for our clients.  If you do find that you need to call into the office for instance to have documents witnessed when it is otherwise difficult for you to arrange that with family and friends then do please get in touch.

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

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Help with funeral expenses

How to get help with Funeral Expenses…

Grieving the loss of a loved one is already one of the most stressful times in a person’s life without the additional burden of paying for their funeral expenses.

Thankfully, funeral expenses can be paid for from the estate. However, this can only be claimed after the probate process has finalised which could take up to a year.

This means that loved ones are left to find the money needed to pay for the funeral until the probate process concludes.

This can be a difficult sum of money to find. Especially when the average cost of a funeral in the UK in 2019 cost £3,986.

What are the options to help cover the costs of a funeral?

Firstly, executors of the estate or the deceased’s family or friends need to assess whether a funeral plan was purchased before death.

In this case, the funeral costs will be taken care by the policy provider.

The deceased may also have a life insurance policy which could have a clause, contributing towards the funeral.

If this is not the case, then the executor, family members or friends of the deceased will need to cover the costs in the short term. Whilst any bank account in the deceased’s sole name would freeze upon notification of death until the probate process is finalised, they frequently release funds for funerals.

If you are unable to pay for the funeral, many probate and funeral care providers offer services to cover the costs which are then recouped once a Grant of Probate or Letters of Administration – the legal document permitting a named person to wind up the estate – have been authorised.

The government also offer a number of options to help low income earners. These include:

  • Funeral Expenses Payment – This option is open to people who claim a number of benefits. The amount offered will vary depending on the deceased’s estate and money available from loved ones. It is unlikely to cover all costs but will help towards funeral expenses.
  • Budgeting Loan – This option provides an interest free loan to cover funeral costs for those receiving certain benefits for more than 26 weeks. The money will then be repaid through a person’s benefits.
  • In the unfortunate event of a child under the age of eighteen dying, the government will now pay the majority of the costs on the family’s behalf. The Children’s Funeral Fund for England will pay burial and cremation fees and will contribute towards the cost of a coffin, helping to ensure grieving families are not burdened with financial distress.

Services from legalmatters during Covid-19 pandemic

Here at legalmatters, we continue to do everything we possibly can to service our existing and new clients during these very difficult times.

Our ability to provide remote services makes us stand out from the crowd.  This means that you can deal with your will, power of attorney, probate, trust and tax advice etc all over the phone or by email and documents are sent to you by post.  We are also advising our clients on signature processes bearing in mind social distancing measures.

Meanwhile, the office continues to operate with minimal skeleton staff for the protection of our staff, clients and visitors, enabling us to still process physical documents for our clients.  If you do find that you need to call into the office for instance to have documents witnessed when it is otherwise difficult for you to arrange that with family and friends then do please get in touch.

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

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Our home

When the joint owner of a property dies, does the property pass to the survivor?

If you own a property jointly with someone else, you may automatically become the sole owner when they die, depending upon the way in which the property is held.

If you live in a home which you own jointly with someone else, it is important to understand the type of ownership you have. This is because it will determine what happens to the property after the death of one owner.

The two types of property ownership

If a property is owned as tenants in common, then each owner has a specified share of the property. For example, a couple may choose to have 50 per cent each, or if one has contributed more to the purchase price they can agree on different shares.

When a tenant in common dies, their share of the property passes in accordance with the terms of their Will or, if they did not have a Will, then under the Rules of Intestacy to specified close family members. This means that the person living in the property will not necessarily inherit it and they may have to leave so that it can be sold.

The second type of property ownership is a joint tenancy. No share is specified and the property is deemed to belong to the owners jointly. When one of them dies, the remaining owner automatically owns the whole of the property.

This is the case, even if the deceased left a Will leaving all of their assets to someone else, because a joint tenancy interest in a property passes by the Right of Survivorship and not via a Will.

The Land Registry will need to see a certified copy of the Death Certificate to amend the Register after the death of a joint tenant, however they will not ask for a Grant of Probate, although this may still be needed for other assets that the deceased may have held. If the property is solely owned or owned by tenants in common, the Land Registry will require a Grant of Probate before they amend the Land Register.

How is my property owned?

To find out how a jointly owned property is held, you need to check the Land Registry title. The property is owned as tenants in common if the section marked ‘B: Proprietorship Register’ contains this or similar wording: ‘No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.’ If there is no restriction then ownership is as joint tenants.

Estate planning

In some cases it is advantageous to your estate for your property to be owned by way of a tenancy in common. It is still possible for someone to stay in the property after the death of the other owner by leaving them a life interest in it. Planning for the future can be a complex area and it is advisable to seek legal advice to ensure that your loved ones are provided for as you would wish.

If you would like to speak to a Wills and estate planning expert, ring us on 01243 216900 or email us at info@legalmatters.co.uk.

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Unresponsive...

When an Executor fails to deal with the administration of a Will

If the administration of an estate is delayed because an Executor stops responding, it can be frustrating for everyone.

A Will may name one or more Executors whose job it is to deal with the winding-up of the deceased’s affairs and the distribution of assets.

Before the administration begins, each Executor must decide whether they are willing and able to act. It is important to think this through carefully as it is difficult to withdraw partway through the administration.

Deciding not to act

If a joint Executor does not wish to take on the task, then they can renounce the role or alternatively request that power to be reserved to them, which means they can ask to act later if they choose. These decisions must be made before any action is taken in administering the estate.

Stepping down partway through administration

If an Executor wishes to cease acting during the administration it can be difficult to have themselves removed. There is a rule that once someone has ‘intermeddled’ in an estate, they cannot retire from the position of Executor.

For this reason, it is important to understand exactly what is required of an Executor before taking on the role. They are required to collect in and value all of the deceased’s assets, arrange for payment of any debts, calculate and pay any tax liabilities, prepare estate accounts and distribute the net estate to the beneficiaries named in the Will. There can be personal liability for failure to act correctly in the administration.

When writing a Will and choosing Executors it is important to ensure they know what the role entails and that they believe they will have the time and capacity to take on the job.

If you do not have anyone who is willing to act as your Executor, you can appoint a professional to act on behalf of your estate.

Dealing with an unresponsive Executor

When an Executor stops responding to communications partway through an administration, it can be very problematic. There is a time limit for completion of estate administration and any other Executors will be mindful of facing accusations of failing to carry out their duties, as well as the potential for penalties arising from late payment of tax and other debts. Beneficiaries will also be keen for the administration to be finalised.

It is important to try everything to attempt to re-establish contact with an unresponsive Executor and see if an agreement can be reached with them to conclude the process. Failing that, it may be necessary to apply to the court to have the Executor removed. The court will take into account the best interests of the estate and any beneficiaries when reaching a decision.

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

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Small estate

Dealing with a small estate where a Grant of Probate is not required

Normally when someone dies, their executor or administrator needs to apply for a Grant of Probate or Letters of Administration. If the estate is small, however, it may not be necessary.

After a death, an executor or administrator is responsible for collecting in the deceased’s assets, valuing them, arranging for sale, preparing estate accounts, to include payment of any tax that may be due, then distributing the funds to the beneficiaries named in the Will or under the terms of the Rules of Intestacy.

The job usually includes application to the Probate Registry for Grant of Probate or Letters of Administration, unless the estate is small enough to be wound up without this document.

What constitutes a small estate?

There is no exact legal definition of a small estate and whether a grant is required depends on individual asset holders.

For example, each bank has its own probate threshold, which can vary widely, with limits usually ranging from £5,000 to £50,000.

The same applies to share registrars, life insurance companies and pension administrators. Some institutions take account of the amount held with them, while others look at the entire value of the estate when making their decision.

Where a property was jointly owned by the deceased with another person and it was held as joint tenants, then it will automatically become owned by the survivor, with no grant needed to transfer ownership.

If a property was owned in any other way, then a grant of representation is usually required.

How to decide whether to apply for a grant

By making enquiries of all of the individual asset holders, the deceased’s representative will be able to gauge whether a grant is needed. If it is not certain, then it is worth obtaining professional advice, as it can complicate matters to find out partway through an administration that a grant should have been applied for.

Winding up a small estate

Where it has been established that a grant of representation is not needed, then most financial institutions will need to see a certified copy of the death certificate and will require a Small Estates Declaration. This is a document executed by the executor or administrator, stating that the estate’s value is below the threshold of the financial institution.

The Declaration will include an indemnity whereby the representative agrees to indemnify the institution against any claims as well as an agreement to provide a grant of representation in the future if required.

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

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Homeowner mortgage

What happens when a homeowner with a mortgage dies

When someone who has a mortgage dies, it is important to notify the lender as soon as possible. If the property has been left to you in a Will, you should ask them about the options for taking on some or all of the mortgage if it cannot be repaid.

After a death, notifications need to be sent to all of the organisations where the deceased held an account. This includes any mortgage lender.

What happens next

The monthly payments will still need to be made while the estate is administered. If the mortgage was in the sole name of the deceased, then the mortgage company has the right to ask for the repayment of the amount owed in full.

If the property is passed to someone else and they are able to meet the mortgage payments, then the mortgage company may consent to transferring the mortgage debt to that person.

It is important to speak to the lender early on after the death, so that they can set out the options.

If the property is sold, then the mortgage will be repaid from the proceeds of sale.

Where there is a joint mortgage

When a property is held with someone else as joint tenants, then the property and the mortgage will automatically pass to that other person on the death of the other owner.

This means that they will be responsible for making the mortgage payments. If this is not possible, then the property may have to be sold to repay the debt.

If the property is held as tenants in common, then the situation can be more complicated as the deceased’s share of the property becomes part of their estate and will pass in accordance with the terms of their Will or the rules of intestacy.

If the remaining owner does not inherit the rest of the property, there may be an option for them to purchase it.

To prevent a tenant in common being forced to leave the property, it is possible for property owners to leave each other a life interest in their share of the home. This means that the surviving spouse or partner would be able to continue to live in the property after death of the other. Following the survivor’s death, the share of the property owned by the first to die would still pass in accordance with their Will.

It is particularly important to think about what you would like to happen to your property after your death if you have a mortgage over it. You need to consider whether others would be able to afford to take on the debt and, if not, how you can secure their future, for example, by leaving them a bequest or taking out a life insurance policy.

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

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Pension when you die

What happens to someone’s pension after their death?

Pensions are notoriously complex and different rules can apply to different pensions held by different companies.

After someone’s death, the benefit of their pension may be payable to the person they nominated when the scheme was set up.

Workplace and private pensions

Sometimes a workplace or private pension scheme will provide a lump sum and/or income to your beneficiaries after you die. This will be paid to the nominated person, but it is possible for a dependant to make a claim on the funds if they have been excluded.

When you reach retirement age, you may choose to remove a lump sum of 25 percent of the value of the fund from your pension. If this is still in your estate at the time of your death, then Inheritance Tax may be payable on it, depending on the size of your estate.

You can gift this during your lifetime if you choose, but if you were to die within seven years of making a cash gift, then all or part of its value will be taken into account when Inheritance Tax is calculated.

Leaving pension funds to a beneficiary

Where a joint annuity is held, payments, usually to a spouse or partner, can continue after the death of the pension holder.

If the pension guaranteed annuity payments for a certain period of time, then these will continue to be made to a beneficiary for that period of time.

The pension may entitle beneficiaries to receive a lump sum payment. If the deceased left children under the age of 18 or a dependent partner or relative, then the pension trustees may make the decision to award a payment to them.

Payment of Inheritance Tax

Pension funds are paid at the discretion of the pension trustees and do not usually form part of the deceased’s estate, in which case Inheritance Tax is not payable on their value.

However if the pension trustees are not able to make a decision as to who the pension funds should be paid to, they may make the payment into the estate, in which case the money would be included in the Inheritance Tax calculation.

Following someone’s death, you should speak to their pension provider to find out how and to whom any payments will be made.

Because pensions are such a complex area, it is advisable to take independent advice when writing a Will, dealing with pension funds or administering an estate.

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

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Executor vs Trustee

The different roles of an Executor and a Trustee in probate

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

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

The role of Executor

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

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

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

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

The role of Trustee

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

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

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

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

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

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Premium Bonds

What happens to Premium Bonds after someone dies?

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

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

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

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

When a Premium Bond owner dies

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

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

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

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

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

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

Is tax payable on Premium Bonds?

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

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

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Lost Will

What happens after a death when you can’t find the deceased’s Will?

When someone has died and their Will can’t be located, although you are certain there is one, there are several courses of action you can take to try and locate it.

If you make a Will, you should ensure that your loved ones know where it is being stored. Otherwise, there is a risk that they won’t know whether you had a valid Will in place or where it is located.

When you have a Will professionally drafted, your solicitor is likely to be willing to store the document for safekeeping for you. You will be given a receipt with their details on it, which you should keep with your important papers.

Searching for a lost Will

When a Will can’t be located, you should first search the deceased’s property and go through their paperwork. Even if you don’t find the Will itself, you may find some information about their solicitor, a receipt for the Will or even a copy of the document.

It is possible that the firm of solicitors that originally held the Will no longer exists, in which case you can contact the Solicitors Regulation Authority Intervention Archives department who store all documents held by firms which they close down.

The London Principal Probate Registry also store Wills that can no longer be held by the original law firm involved.

Finally, a firm called Certainty have a register of a certain number of Wills and will search that for you for a fee.

If you are acting as executor or administrator, it is important that you make an attempt to find a valid Will. By undertaking these searches, you will be able to show that you did everything reasonable to locate any Will, which could be important if potential beneficiaries raise any queries about your actions.

Using a copy of the Will

It may be that a signed copy of the Will is found. Application for grant of probate can be made to the Probate Registry using the copy, but it will need to be accompanied by a sworn affidavit detailing the attempts you have made to locate the original.

You will also need to explain the circumstances under which the Will has been lost and also provide information regarding anyone who would inherit under the rules of intestacy but not under the terms of the copy Will.

When the Will can’t be found

If neither the original Will nor a copy can be located then it will be necessary to proceed with administration of the estate under the rules of intestacy. These provide a strict order in which close relatives of the deceased will inherit, starting with any spouse, who will be entitled to the majority of the estate, and followed by any children.

If you would like to speak to one of our expert Will experts, call us on 01243 216900 or email us at info@legalmatters.co.uk.

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