When you write your Will, you need to name one or more Executors who will carry out the administration of your estate when the time comes. We look at what this entails and what you need to take into account when choosing someone to take on the role.
The Executor to an estate has the job of bringing the deceased’s affairs to a close and distributing funds to the named beneficiaries. The task can be daunting and take many months, even years, so before appointing someone you both need to understand exactly what it entails.
The role of an Executor
There is usually a substantial amount of work involved in winding up an estate. Initially the funeral needs to be arranged and the death registered.
Asset holders need to be notified and the estate valued. Inheritance Tax should be calculated and paid, as well as any Income Tax that may be due.
Assets need to be valued, collected in and sold, to include any property, which may need to be cleared and insured in the meantime.
Estate accounts must be prepared and finally the estate is distributed to those named in the Will.
Choosing the right Executor
The Executor can be held personally liable for any mistakes made during this process, so it is important to ensure that the person you have chosen is willing to take on the role and capable of carrying it out proficiently.
Your executor should be aged 18 or over and have the mental capacity to act on your behalf.
More than one Executor
It is usually recommended that at least two Executors are appointed in a Will so that if one of them is unable or unwilling to act when the time comes, you still have someone else who can take on the role.
Two Executors can act jointly, or one can step back when the time comes and allow the other to do the work alone. You can also name a substitute Executor who would only act if one of those named could not.
If you don’t have anyone who can act for you
If you don’t have anyone willing or able to take on the task, you can appoint a professional Executor, such as a probate solicitor, to deal with the administration of your Will.
They will be familiar with the process, able to correctly calculate tax due and draft accurate accounts. A charge is made for the service, but it does mean that your loved ones will not have to struggle with complicated and sometimes frustrating paperwork following your death.
If you would like to talk to one of our Wills and Probate specialists, ring us on on 01243 216900 or email us at firstname.lastname@example.org.
A Living Will, also known as an advance decision, is designed to be used during your lifetime and sets out your wishes in respect of your care and medical treatment.
By making a Living Will, you can put in writing details of what is important to you and how you would like to be treated in the event that you are unable to make or communicate your wishes at a future date.
What you can include in a Living Will
As well as medical considerations, you can record your preferences in respect of where you would like to be cared for, personal preferences for your day to day life, such as diet and religious beliefs, and who is to be consulted about your care. You should ideally also discuss this with your family and those included in your Living Will.
You cannot include any instructions about what should happen to your estate after you die; this needs to go in a separate Last Will and Testament.
What to consider in respect of medical treatment
It is possible to refuse certain treatments, such as life support and antibiotics for life-threatening infections, but you cannot refuse basic care or food and water. Similarly, you can’t nominate someone to make decisions on your behalf.
If you have a specific condition, you should discuss the possible terms of any Living Will with your medical practitioners.
A Living Will can be made at any time, to help loved ones make difficult decisions in the future, and it is not necessary to wait until you are facing illness or incapacity.
Is a Living Will legally enforceable?
If your Living Will is within the bounds of what is legal and is valid and unambiguous, it will be legally binding on medical professionals.
Health and welfare lasting power of attorney
A health and welfare lasting power of attorney (LPA) is a document appointing someone to act on your behalf in respect of similar matters. If an LPA is signed after a Living Will is made, it may invalidate the Living Will if it gives the attorney the power to make the same decisions covered in the Living Will.
It is possible to write a health and welfare LPA that doesn’t invalidate a Living Will, however this would need to be carefully drafted.
A Living Will made after a health and welfare LPA would take precedence to the LPA in respect of life-saving treatments.
By putting a Living Will in place while you are able to make important decisions for yourself can be helpful and of comfort to your loved ones in the future.
If you would like to talk to one of our lawyers about a Living Will or an LPA, call us on 01243 216900 or email us at email@example.com.
When someone dies, the first £325,000 of their estate is exempt from Inheritance Tax (IHT). If they don’t use all of this allowance, it can be transferred to their spouse’s or civil partner’s estate in due course. This is known as the transferable nil rate band.
This increases the exempt amount for the partner’s estate when they die, meaning they could have a potential IHT threshold of up to £650,000.
The relevant dates
The transfer of the nil rate band can be applied for if the remaining spouse or civil partner died on or after 9 October 2007.
In respect of civil partnerships, the transferable nil rate band can be claimed only if the first partner died on or after 5 December 2005, the date that the Civil Partnership Act became law.
How much nil rate band is transferable?
Where the first spouse or partner to die leaves all of their assets to the remaining spouse or civil partner, no IHT is payable, so the entire £325,000 can be passed to the remaining spouse, subject to the deduction of any non-exempt gifts made during the previous seven years.
How to apply to transfer the nil rate band
Two forms need to be sent to HM Revenue & Customs (HMRC). The first is the standard IHT form, while the second is the application to transfer the unused allowance. There are two options for this second form.
Form IHT217 Claim to Transfer Unused Nil Rate Bank for Excepted Estates
This form should be used when the estate of the first person to die is an excepted estate, ie. IHT was not payable, for example where the estate is worth less than £325,000 or where the assets are left to charity.
Form IHT402 Claim to Transfer Unused Nil Rate Band
Where some of the £325,000 IHT allowance was used by the estate of the first spouse to die, then only the remaining balance can be transferred to benefit the second estate. Other financial information will need to be included on the form, for example gifts made within the last seven years and pension details.
Both forms need to be signed by the estate Executor or Administrator and sent to HMRC together with the main IHT form, IHT400.
A probate lawyer will be able to work out the correct figures to be included on the form, which isn’t always straightforward, for example in the case of disposal of cash or assets by the deceased prior to their death or where gifts are made to charities, which could potentially reduce IHT liability.
To speak to one of our probate specialists, call legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
When you lose someone you love it is always a difficult time. Having to deal with the paperwork involved in administering an estate after a death – and when you’re grieving – can be extremely upsetting.
That’s why at legalmatters we will always try to make the process as pain-free as possible for you – and why we’re always delighted to hear from a client when we’ve helped a family or an individual through such a stressful time. So thank you Jane for your kind words.
“Thank you and Megan, and all in the office staff for making my journey – sorting my dad’s estate through yourself and legalmatters – a professional, reassuring and stress free time. It’s been a pleasure and I would highly recommend you to friends.”
When making a Will, it is possible to leave someone a life interest in your property or assets.
It may be more prudent in certain circumstances to leave your spouse or partner a life interest in your assets rather than giving them outright ownership.
In particular this can be advantageous if you want to make sure any children you have receive something in the future.
Possible problems in leaving assets outright
Married couples often make duplicate Wills, leaving everything to each other and then after both their deaths, to their children.
The problem with this is that after the death of the first parent, unforeseen circumstances could mean that either the Will becomes invalid or the money in the estate is spent before it can be inherited.
For example, if the remaining parent remarries, any previous Will automatically becomes invalid. If the parent fails to make a new Will, their assets will pass under the Rules of Intestacy, with the majority of the estate going to the new spouse, who is then free to leave it elsewhere in their own Will. Even if they intend to honour an intention to pass the money to the children, it may be spent, for example on care home fees.
Similarly, if a new Will is written, any previous Will is superseded. This could mean that after the death of the first parent, the remaining parent is free to leave the whole estate elsewhere and not to the children.
Finally, if the remaining parent moves to a care home, then assets in the estate can be swallowed up in fees. At present the local authority will only step in to assist with payments when the patient’s total worth falls below £23,250.
How a life interest works
By leaving someone a life interest, you can be sure that ultimately your assets will pass to those you choose.
For example, you can leave your spouse a life interest in your home, which means they can live there as long as they want, but once they have died or left, your share will pass in accordance with your Will and cannot be given elsewhere.
This also prevents your share being used to pay their care home fees.
Similarly you can leave a life interest in other assets, including cash and shares. This allows your spouse access to money and interest for living expenses, but means that the money remaining after their death will go to your children, or whoever you have chosen.
If you would like to discuss whether leaving a life interest in your Will might be suitable for you, call legalmatters on 01243 216900 or email us at email@example.com.
Nearly two million people are due a refund after the Office of the Public Guardian (OPG) overcharged for registering a Lasting Power of Attorney (LPA).
An LPA gives someone the right to manage your affairs after you become incapable of doing so. You can execute an LPA in respect of your health and welfare and/or in respect of your property and financial affairs.
The Ministry of Justice has announced that the OPG overcharged those who registered an LPA between 1 April 2013 and 31 March 2017, and that they are entitled to a refund.
So far only 200,000 claims have been made out of 1.8 million who are qualified to do so.
Making a claim
Either a donor or an attorney can make the claim. They will need to supply the donor’s bank details, as the payment will be made to the donor. A copy of the LPA should also be included.
The claim form can be accessed via the government information page https://www.gov.uk/power-of-attorney-refund. In some cases, including where the donor does not have a bank account or the applicant is a court-appointed deputy, the claim will need to be made by phone by calling the helpline on 0300 456 0300, option 6. The deadline for claims is 1 February 2021.
How much will be refunded?
The amount of the refund will depend on when the LPA was registered, as fees paid differed over the time period in question.
Date Fee Paid Refund
April to Sept 2013 £54
Oct 2013 to March 2014 £34
April 2014 to March 2015 £37
April 2015 to March 2016 £38
April 2016 to March 2017 £45
A claim can be made for each LPA registered. Interest will also be paid at a rate of 0.5 percent.
Who needs an LPA?
It is advisable for everyone to take the time to make an LPA, so that in the event they become unable to manage their affairs, either through illness, injury or incapacity, their chosen attorney can step in to help.
In the absence of an LPA, application would need to be made to the court, which could be an expensive and time-consuming process. This could also mean that you might not have your first choice of attorney acting for you.
You can execute an LPA, then keep it until such time as it is needed, at which point it is registered with the OPG.
If you would like to talk to one of our expert lawyers about drawing up an LPA, call legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
Many families will have to pay more in probate fees from April 2019. That’s according to new proposals that see a hike in the cost of applying for probate.
The Government has claimed that fees are necessary to fund an effective and fair court and tribunals system. However, under the plans, some grieving relatives will have to pay death taxes of up to £6,000 to secure legal control over a deceased’s estate.
What are the main changes?
At present, the current cost of securing probate is £215, or £155 for families who use a solicitor. But, under the new plans, the Government has linked the charge to the size of the estate. This means that:
- Inheritances of less than £50,000 will be exempt (the current threshold is just £5,000)
- Estates valued between £50,000 and £300,000 will pay a fee of £250
- Those between £300,001 and half a million pounds will now pay £750
- Estates between £500,001 and a million will pay £2,500
- The cost could go up to £6,000 for estates estimated at over £2 million.
The reforms will also make it easier for grieving families to make the application online while helping people lacking in computer literacy.
Are the changes fair?
While it might seem fair that larger estates have to pay more, these fees must be paid upfront by loved ones (who might not have access to this kind of money).
This also fundamentally changes the fee-structure for applying for probate. Until now, the cost has existed to cover the average costs of making a grant of probate. However, the new fee structure is hugely disproportionate leaving some people to argue that it is actually a “stealth tax”.
However, according to the Government, the new banded fee model represents a “fair and more progressive way to pay for probate services compared to the current flat fee”. It also argues that, for those who do pay, “around 80% of estates will pay £750 or less”. It has said that fees will never be unaffordable and that options will exist to help families choose a way to pay which suits their circumstances.
Nevertheless, with assets from an estate frozen until the executors receive the grant of probate, questions still exist over how some executors will manage to pay the probate fees. Especially for people who may have little money in the bank, despite valuable estates and properties.
To find out more about how the new probate fee structure could impact your estate, speak to one of our expert team by calling 01243 216900 or email us at email@example.com.
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.
Civil partnerships were reserved for same sex couples only. However, in recent years, opposite sex couples have been campaigning for civil partnerships for heterosexual couples. The Supreme Court of England and Wales ruled in favour of civil partnerships for all, as the Civil Partnership Act 2004 was seen as an infringement of the European Convention of Human Rights. The legislation will be changed, though this is thought to take some time.
So how does a civil partnership affect estate planning? Firstly, it’s important to determine what ‘estate planning’ actually is. Your estate covers everything you own including property, finances, material possessions and even your social media accounts. An estate plan is how you wish to distribute your assets and possessions among your loved ones.
Here are six ways a civil partnership changes estate planning for all couples:
- If you die without making a will your partner will still inherit your assets
If you’re in a civil partnership and you die intestate (without making a Will) then your partner will automatically inherit a portion, or all, of your property. For example. if you and your partner own and live in a house together, they will stand to automatically inherit it after you die – unless there are special circumstances.
- If you die having made a valid will your wishes will be carried out
If you or your partner dies after making a valid Will, then all wishes will be carried out as they would be for a Will from a marriage. For example, if you want to pass down your home to your partner and your holiday home to your children then the wishes will be carried out as specified.
- Civil partners are exempt from Inheritance Tax
Neither you nor your partner will pay Inheritance Tax if the value of your entire estate is below £325,000. You will also be exempt from Inheritance Tax if you leave all your estate to your civil partner, community sports club or a charity.
- The Inheritance Tax increases to £450,000 if children are the heirs
If you want to leave your property to your birth children, the Inheritance Tax exemption threshold increases to £450,000. This also extends to foster, adopted and stepchildren.
- You can add surplus Inheritance Tax threshold to your partner’s threshold
If your estate is under the threshold, the ‘unused’ threshold can be added to your partner’s threshold when they pass away. This pushes the maximum Inheritance Tax threshold to £900,000.
- You can pay a reduced Inheritance Tax rate in some circumstances
The standard rate for Inheritance Tax is 40% but you can reduce it to 36% if at least 10% of your net assets are left to charity in the Will. If you and your partner owned farmland or woodland you may be eligible for Agricultural Relief on your Inheritance Tax bill.
Estate planning can look complicated. If you’d like some help in writing your Will, contact one of the team at legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
We all love to receive affirmation of our kindnesses. With some people it really isn’t hard to be nice. Take this lady – Jean – who we helped with a recent legal matter. She sent us the most lovely letter, thanking us for the advice and support we’d given her in the last few weeks. She added:
“It made me feel secure and cared for.”
And that’s what we aim to do. Give good advice in a supportive and caring manner. And we hope Jean will join us soon for a cup of tea and a piece of cake.