What is Probate?
Lawyers refer to ‘the probate’ of a loved one and often make assumptions that everyone knows what probate is. That certainly isn’t the case but sometimes, after the death of a loved one or relative, you are too upset or embarrassed to ask questions about probate and what it involves. In this blog we look at what probate is, what it involves and answer your questions about probate.
What is Probate?
Probate is the name of the legal process that may have to be undertaken when a person passes away to legally enable the deceased person’s assets , property and belongings to be sold or transferred in accordance with the Will or, if the deceased left no Will, under intestacy rules.
The word ‘probate’ is a legal term, like conveyancing for the legal work connected with a house sale or purchase. It is just a historic word for sorting out the legal paperwork after the death of the deceased.
Do you always need to get probate?
Not every estate needs to go through probate. It is a blessing if an estate does not have to go through probate as it saves the relatives and beneficiaries time and money if the estate of the deceased does not have to go through probate.
If you are uncertain if an estate will need to go to probate it is best to ask a Cheshire Probate solicitor who will be able, with a bit of information about the size and contents of the estate, to be able to tell you if probate is needed and, if so, how long it is likely to take and cost in legal fees.
Does an estate have to go through probate if there is a Will?
An estate doesn’t necessarily have to go through probate if there is a Will. That is because probate doesn’t depend on whether the deceased left a Will or died without a Will (intestate) but on the size of the estate and the type of assets it contains. That is why it is best to get specialist help so the estate doesn’t spend unnecessary money on probate if it isn’t needed.
What happens during probate?
If you are told that your loved one or your relative’s estate needs to go through probate then it is difficult to understand what takes the time unless you know what probate involves.
Probate is the technical term for the legal process of sorting out the property, money, possessions (called the estate) and the financial affairs of the person who has died.
If the deceased died without leaving a Will then ‘letters of administration’ are needed before the estate can be disposed of in accordance with intestacy rules.
If the deceased died leaving a valid Will then a ‘ grant of probate ‘ is needed before the estate can be distributed to the beneficiaries in accordance with the terms of the Will.
Once the letters of administration or grant of probate is obtained then the next of kin or the executors of the Will have the legal authority to sell or transfer the assets in the estate, either according to intestacy rules or the provisions in the Will.
Step by step guide to probate
If you are the next of kin or the executor of a Will it can be frustrating to think that ‘nothing is happening’ but probate takes time because it involves:
Identifying the deceased’s assets and liabilities. How difficult this is depends on the paperwork left by the deceased and the nature of their estate and any liabilities. This is the first step to see if probate is needed and to determine the value of their Estate
Checking if the deceased died intestate or with a valid Will and identifying the relevant next of kin under the intestacy rules or beneficiaries under the Will
Calculating the value of the estate and seeing whether any inheritance tax is payable to HMRC. A tax return has to be completed
Applying to the probate registry for the letters of administration or grant of probate
Once the documents are provided by the probate registry paying off any debts and liabilities from cash left by the deceased or selling assets to pay any debts that the deceased had at the time of his or her death and, where necessary, paying any inheritance tax payable on the estate to HMRC
Preparing estate accounts to record the assets in the estate (including cash movements from the date of death of the deceased) to show what assets have been sold and what liabilities and debts paid. These accounts are approved by either the executors of the Will or, in the case of an intestacy, by the deceased’s next of kin
Checking to make sure that there are no challenges to the Will or claims against the estate and , if not, arranging for the balance of the estate to be distributed to the next of kin entitled to the estate under intestacy rules or the beneficiaries under the Will. This can involve the sale or transfer of the family home or an investment portfolio. If the estate is large or complex then sometimes interim distributions are made until the estate can finally be sorted out and any final dispositions made to the next of kin or beneficiaries.
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Do you need a probate solicitor to get probate?
You don’t have to use a probate solicitor to secure probate. The choice is yours. However, the size and the complexity of the estate might make it best to instruct a probate solicitor. For example, if there is likely to be inheritance tax payable or capital gains tax. Other scenarios that would justify using a probate solicitor to secure probate for the estate include:
The next of kin in an intestacy or the executors of a Will don’t get on very well with one another or there are ‘trust issues’
One of the next of kin or the beneficiaries is very keen for the estate to be distributed very quickly and you don’t have the time to sort out the estate as quickly as they would wish
There is the potential for the Will to be challenged, either by someone saying that the Will isn’t valid or that the deceased didn’t leave reasonable financial provision for a family member or dependant out of their estate. Claims can also be made against an estate if the deceased died without leaving a Will and a close family member or dependent says that the intestacy provision doesn’t make reasonable financial provision for them
Protecting the executors from personal liabilities arising from acting as the executor of a Will. For example, protection from tax liabilities
The complexity of the estate, for example does the estate include a family business or should a deed of variation be completed to minimise inheritance tax payable on the estate?
There are other reasons why you may want or need to use a probate solicitor and that is why it is best to talk to a probate solicitor about what getting probate involves and the costs and timescales before making a decision about whether to apply for probate without a solicitor.
Cheshire probate solicitors
If you have questions about probate or need advice on getting probate please call Chris Strogen at Evolve Family Law for a quote. Call or contact us online. Appointments are available in Holmes Chapel Cheshire or Manchester or by video conference, Skype or telephone appointment.
Chris Strogen
Apr 28, 2020
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7 minute read
Do I Need a New Will?
In this blog we answer your questions on whether you need a new Will. People tend to assume that a Will is good for the rest of their life or that their Will needs updating every year or so. The answer to whether your Will needs changing often lies in whether changes have occurred in your personal or financial circumstances or whether the personal or financial circumstances of your family and your planned beneficiaries have changed.
Online Cheshire Will solicitors
If you need help making a Will or changing your current Will then the Wills and estate planning team at Evolve Family Law can assist. Call us for a no obligation quote or complete our online enquiry form and we can set up an appointment in person, on the phone, video conference, or Skype call.
Do I need a new Will?
The answer to whether you need a new Will is ‘maybe and lets have a proper chat about it’. That is because so much depends upon your individual personal and financial circumstances. It may be that nothing significant has changed for you or any of your beneficiaries. In that case your Will may be OK. However, it is still good to check as if your Will was prepared some years ago, or drafted by a non-specialist solicitor, it may not be as tax efficient as it could be.
There are also many occasions where a Will maker decides that they would like to make some bequests or additional specific bequests to family members or friends (such as the gift of a fob watch to a grandson or an eternity ring to a daughter or to a close friend).
If you want to make a single specific bequest (or add a single additional bequest to the ones already contained in your Will) then it may be possible to do this by getting your Wills and estate planning solicitor to prepare a codicil for you (a supplemental document to your existing Will). In other scenarios, it is easier and potentially less confusing for a new Will to be drawn up. For example, if beneficiaries in your existing Will have moved house or changed their surname because of marriage or divorce and so your original Will could benefit from a bit of tidying up.
In many circumstances, people don’t realise that their Will is no longer fit for purpose and needs a complete overhaul and a rewrite. That is because changes in personal or financial circumstances may not seem legally significant to you but they can be.
When do I need a new Will?
You need to take legal advice from a Cheshire Wills and estate planning solicitor if any of the following applies to you:
Your original executors of your Will have passed away and there is no substitution of executor clause in your Will
You have got married or remarried
You have separated from your wife, husband, civil partner or partner
You have formed a new relationship – you still need estate planning advice whether or not you want to leave a share of your estate to your new partner. If you don’t review your estate planning and take appropriate action then you may increase the prospects of a claim being made against your estate to challenge your Will. The risks of this can be minimised if you make a new Will
You have new step children or step grandchildren and they aren’t already included in your Will as a class of beneficiaries
Covering unforeseen events if your original Will doesn’t set out what will happen if one of your beneficiaries dies before you or specifically names your children or grandchildren but you now have had additional births within the family
Age of inheritance - you may want to change the age that your beneficiaries can inherit. For example, increase the age from eighteen to twenty five or increase the powers of your trustees so that they can advance monies to any young beneficiaries to help with education fees or other specified expenses
Your beneficiary’s personal or financial circumstances have changed.
There are lots of other reasons why your Will may need to be reviewed. It is best to take legal advice every couple of years to double check that your Will still meets your needs and protects your family and loved ones.
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Why should I change my Will if my beneficiary’s circumstances change?
It may appear to you that the change in your beneficiary’s personal or financial circumstances isn’t relevant to your Will or estate planning but it is best to review your Will if your beneficiary:
Gets married – especially if they don’t sign a prenuptial agreement prior to their marriage .You may want to place their inheritance in trust to protect the family money
Separates or divorces from their husband, wife or civil partner. That is because if you leave a legacy to a beneficiary who is going through a separation or divorce , and you pass away, their spouse or civil partner may try to make a claim on the money. This can be avoided by making a new Will or placing the legacy in a trust that can form part of your new Will
Passes away without your current Will saying who you would like to receive their legacy instead of them. For example, you may want their legacy to be shared between their children
Is made bankrupt or is at risk of bankruptcy. If a beneficiary inherits money whilst bankrupt the money will go to their trustee in bankruptcy
Has mental health issues or special needs as you may not have realised at the time that you made your Will that your beneficiary had these difficulties. For example, if you made your Will many years ago prior to the birth of your children or grandchildren and simply left your estate ‘to your children’. One of your beneficiaries may need the protection of a trust that can be created in your new Will
Your beneficiary isn’t financially prudent so you may prefer to delay the date that they can receive your legacy or place it into trust.
Updating your Will is one of those chores that we can put off but it is best not to. If you are uncertain about whether your Will needs reviewing and updating then it is best to take legal advice from a Wills and estate planning solicitor.
Online Cheshire Will and estate planning solicitors
For help changing your Will or estate planning contact our efficient and friendly team for a quote.
Chris Strogen
Apr 09, 2020
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6 minute read
How Do You Remove an Executor From a Will?
If you have inherited a legacy, whether it is a part share in a house or a cash gift, you are reliant on the executors of an estate to sort out Probate , gather in the assets and then distribute the assets in accordance with the deceased’s Will.
The Executor of a Will
The executors of a Will are people chosen by the deceased to handle their Will. The executors could be family members, friends or professionals, such as a solicitor, accountant or the bank.
If the executors are friends or family of the deceased then the executors can hand over a lot of the responsibility for sorting out the deceased’s estate by instructing a probate solicitor to administer the probate and the sale of assets and the distribution of legacies to beneficiaries. Most lay people take this option as they are honouring the appointment made in the deceased’s Will but not leaving themselves open to criticisms about delays in payment of legacies or problems with securing probate.
However, a friend or family member appointed as an executor may not get on with the other executors or with the beneficiaries. The executor may say that they want to sort out the probate themselves, leaving the beneficiaries fearing there will be a delay in sorting out the estate and payment of legacies. In other situations, the deceased may have appointed a bank as his or her executor not appreciating that the bank’s charges for handling the estate may be a lot more than a local Cheshire probate solicitor. The additional administrative charges might be an issue for the beneficiaries as the costs of sorting out probate and administering the estate will be deducted from the estate before the residuary estate, after payment of any legacies, is divided between the residuary beneficiaries.
How do you Remove an Executor from a will?
If you think that an executor is not up to the job or you think that they are too slow or maybe acting improperly then a court application can be made. The court can make a wide range of orders including an order to remove an executor.
Cheshire probate solicitors normally recommend that you try to resolve the difficulties with an executor first before starting court proceedings. Sadly, that isn’t always possible and so, as a last resort, court proceedings can be started to secure an order to remove an executor.
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Avoiding Executor Problems
A good private client and Cheshire probate solicitor will discuss the choice of executors when preparing a Will. After all, it is important that the executors are not too elderly or frail to be up to the task and will be able to work with one another.
It is sometimes thought that it does not really matter who the executor is if the executors are just going to appoint a solicitor to sort out the estate for them. It is still important to choose your executors with care and to make sure that they are willing to undertake the task for you.
For assistance removing an executor or if you have any questions about probate or estate planning contact our expert family lawyers today
Chris Strogen
Nov 18, 2019
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3 minute read
Can I Give Away My Inheritance?
It may seem a very odd thing to do but, in some personal and financial circumstances, the decision to give away an inheritance is the right thing to do.
Most people assume that if they have the good fortune to inherit something under a loved one’s Will or intestacy provision, they have to accept the legacy. This isn't always the case.
In an ideal world, it should not be necessary to consider giving away a legacy because the loved one would have left a Will, rather than dying intestate, or would have discussed the bequest in the Will and would have updated their Will.
However, what does happen if you receive a gift as part of an inheritance and you decide you do not want or need it? There are a number of circumstances where the beneficiary of a Will may not want to receive their inheritance, for example:
They may want to make provision for someone who has been excluded from the Will; or
They may want to give their share of the deceased’s estate to a family member who is not as financially well off as they are ; or
They may want to equalise the gifts if the testator has favoured them over other beneficiaries; or
They may wish to give all of their legacy or part of it to charity; or
They may want to make the Will tax efficient.
Deeds of Variation
In order to make changes to a Will after the death of the testator, a Deed of Variation should be drawn up.
So that the tax advantages from the Deed of Variation can be obtained, the document has to be signed and executed within two years of the date of death of the testator.
A Deed of Variation can be executed before or after the Grant of Probate or Letters of Administration (if the deceased died intestate without a Will) has been obtained. Any beneficiaries who are affected by change in Wills must agree and sign a Deed of Variation. Furthermore, all the personal representatives of the estate should also ideally sign the Deed of Variation.
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Who Can Sign a Deed of Variation?
If a beneficiary has capacity to make their own decisions then they have the authority to execute a Deed of Variation. A beneficiary under the age of eighteen cannot sign a Deed of Variation. No one else can sign a Deed of Variation on behalf of a minor child.
How Can a Deed of Variation Reduce Tax?
A Deed of Variation may be the answer if a Will has not been drawn properly to obtain the best tax treatment or the tax rules have changed. For example, executing a Deed of Variation may reduce the inheritance tax payable by:
Varying the gifts in a Will to leave money to charity. Any gift to charity does not attract an inheritance tax charge. If charities are left at least ten percent of the net estate then the estate can qualify for a reduced rate of inheritance tax of thirty-six percent, instead of forty percent;
If a husband or wife died without a Will, with children, the surviving wife, husband or civil partner will receive assets up to £250,000 and half the remainder of the estate. The other half of the estate would pass to the children. If the amount going to the children exceeds £325,000 then this will attract inheritance tax. A Deed of Variation can be signed so the entire estate passes to the surviving spouse or civil partner. If an estate passes to a surviving spouse or civil partner no inheritance tax is payable. The transferable nil-rate band can be utilised on the second death.
It pays to get legal advice on whether a Deed of Variation is a sensible option. Some may think that a Deed is unnecessary but with expert legal advice, it can save on inheritance tax and money to get a Deed of Variation drawn up.
For help preparing a Deed of Variation or drawing up a Will or estate planning please contact our expert family lawyers today
Chris Strogen
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4 minute read
What is a Lifetime Gift in the UK?
Lifetime gifting is on the rise. That is not surprising, as nowadays children need a financial helping hand to get them on the property ladder. However, when parents give cash to their children they often do not know the UK rules on ‘’what is a lifetime gift’’.
As Cheshire Wills and Probate solicitors, it is important to us that parents and other benefactors with estates that will be potentially liable to inheritance tax, as well as the children receiving the benefit of the lifetime UK gift, understand the complex inheritance tax rules so that they can make informed decisions.
According to HMRC research, 13% of the UK population have made a lifetime gift of £1,000 or more in the last two years .Just under half of the lifetime gifters said that they did not know the inheritance tax rules on UK lifetime gifts before making the gift.
What is a lifetime gift in the UK?
The definition of a ‘’lifetime gift UK‘’ is relatively simple. It is a gift, given without ‘’strings‘’ or conditions for its return to a beneficiary during a donor’s lifetime. A gift made in a Will is a legacy that is only effective after the donor’s death.
Cheshire Wills and Probate solicitors say that whilst the definition of a lifetime gift UK may be straightforward, inheritance tax rules on lifetime gifting are not.
Lifetime gifting UK and the annual exemption and small gifts
Current inheritance tax rules say a donor is entitled to give £3,000 in gifts each year exempt from inheritance tax.
Lifetime gifting UK and the seven-year rule
If a donor wants to give more than £3,000 away in a year, they can do so. However, unless the gift falls within one of the HMRC recognised exceptions, it could become subject to inheritance tax when the donor dies under the “seven-year rule”.
For example, if a parent gives a child £40,000 for a house deposit then there may be an ‘‘inheritance tax time bomb’’ if the parent does not survive for seven years after the transfer of the gift. That is subject to size of the parent’s estate, the availability of the parent’s inheritance tax nil rate band for lifetime gifts and the residence nil rate band.
Lifetime gifting UK and the small gifts exemption
Cheshire Will and Private Client solicitors say that gifters are entitled to use the ‘’small gifts exemption’’ to give up to £250 to as many people as they choose. However, the small gift exemption cannot be used with the annual gift exemption. It also cannot be used to reduce large gifts made to an individual.
Lifetime gifting UK, marriage, and civil partnership
Under current rules, parents can give up to £5,000, grandparents £2,500, and anyone else £1,000 to a couple who are getting married or entering a civil partnership, without future inheritance tax consequences.
Lifetime gifting UK to a spouse or civil partner
Gifts to a spouse or civil partner are normally inheritance tax free, subject to the proviso that the couple must have the same domicile.
If one partner is UK domiciled and the other is not, then complicated inheritance tax rules and exemptions apply.
Lifetime gifting UK and normal expenditure out of income
This exemption allows a donor to make regular gifts from surplus income (not from capital or the sale of property). Gifts from surplus income are inheritance tax free on death, even if the donor dies within seven years of transferring the gift.
Cheshire Private Client solicitors recommend that professional advice is taken on the definition of “normal expenditure” and “income” to avoid future difficulties with proving that the gifts were made out of income and as part of the donor’s normal expenditure.
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Lifetime gifting UK and family maintenance
The family maintenance exemption allows donors to make gifts for a spouse or civil partner’s maintenance or for the maintenance, training or education of children under eighteen, free of future inheritance tax.
Lifetime gifting and exceptions
Other major exception to lifetime gifting and potential payment of inheritance tax are lifetime gifting made to organisations, such as:
Charities;
Gifts to the nation for national purposes ;
Political parties (if they qualify).
Lifetime gifting UK legal advice
Lifetime gifting is undoubtedly a lovely thing to do to help friends and family. However, Cheshire Wills and Private Client solicitors recommend that lifetime gifting should only be undertaken after taking detailed estate planning legal advice and once the potential inheritance tax implications are understood. Just as importantly, solicitors advise that lifetime gifting UK is not an alternative to preparing a Will.
For help with lifetime gifting and estate planning or drawing up a new Will please contact our Will solicitors today.
Chris Strogen
Oct 28, 2019
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4 minute read
How Much Is Inheritance Tax?
Inheritance Tax and Leaving Your Estate To Your Spouse
The late national icon, Sir Bruce Forsyth, has received some criticism from some quarters about tax planning. I dreaded to think what sort of racy or cutting edge steps Bruce Forsyth had supposedly taken to reduce the tax burden of inheritance tax payable on his death. After all, as an octogenarian with assets of about 17 million pounds and well reported views to the press on the payment of inheritance tax, it would not be surprising to learn that Bruce Forsyth had taken legal advice from an expert wills and estate planning solicitor to protect his estate from the full force of inheritance tax payable on his death. It helps to answer the question ‘How much is inheritance tax?
So what was the scheme that Bruce Forsyth was accused of joining? How much inheritance tax did he pay? Was it the same or similar to the tax regimes entered into by high profile footballers and comedians that are now the focus of so much criticism and investigation? Not at all. The supposed ‘tax device’ that Bruce Forsyth had employed was to leave the vast majority of his estate to his wife, Wilnelia. Most people would not think it unusual for a husband to leave his estate to his wife but in Bruce Forsyth’s case the size of his estate and the fact that he had 6 children, with his wife being stepmother to 5 of those children, led to questions in some sectors of the media about why he had not left money to his children.
The answer to that question was, of course, to protect his family and to minimise the liability of his estate to pay inheritance tax.
What is inheritance tax and how much is inheritance tax?
Inheritance tax is paid upon a UK-domiciled person’s death if their estate exceeds their IHT threshold (known as the nil rate band).
How much inheritance tax is payable?
If a deceased’s estate amounts to in excess of the nil rate band then inheritance tax is payable at 40% by the estate.
Are there exceptions to payment of inheritance tax?
There are a number of very common and popular ways for individuals to reduce the inheritance tax burden payable by the estate on the deceased’s death such as:
• Giving money away during life – known as lifetime gifting;
• Putting money into trust;
• Leaving money to charity;
• Leaving the estate to a spouse or civil partner – no tax is payable on the death of the first spouse but tax will be payable on the death of the second spouse.
There are complicated rules relating to inheritance tax planning such as rules on taper relief. The rules are also different if the deceased was not domiciled in the UK at the time of death. These tricky rules mean that it is always sensible to take professional legal advice on your Will and effective tax planning options.
Leaving the estate to your spouse
If you leave your estate to your spouse or civil partner then he or she will not pay inheritance tax on the bequest - even if the gift is in excess of the inheritance tax nil band rate.
Sir Bruce Forsyth left his estate to his wife, Wilnelia. On the face of things that may seem odd given his wealth of about 17 million. However by leaving his estate to his wife no inheritance tax is payable. It is reported that in addition to the will (which is a public document after probate has been granted) a Letter of Wishes was also prepared to accompany the will. Sometimes Letters of Wishes are left because despite leaving the estate to a spouse the deceased wants his spouse to give money to their children or others.
As the Letter of Wishes is private, the media do not know what the Letter of Wishes says. Bruce Forsyth could have asked for specific gifts to be made to his family and friends in this document or the Letter could have simply provided guidance on the sorts of things he wanted his wife to consider if she chose to give some of his wealth away.
What is a Letter of Wishes?
When planning for the future, it is common to think about what you would like to leave family and friends in your will, it helps people to answer the worry of how much inheritance tax will be. However, there may be things that you would like to say to people after death or gifts that you would like to make but only on a confidential private basis.
A Letter of Wishes is a separate document to your will, but is typically stored alongside it so that it can be communicated to the right people after your death.
A Letter of Wishes is not legally binding and does not carry the same legal force of a will. Therefore there is no guarantee that if you ask an executor of your will to do something in the Letter of Wishes or ask your spouse to give some of the inheritance left in the will to him or her that they will follow the instructions. That is why it is important that you carefully select your estate planning options and how they might work within your own family as well as carefully choosing the executors of your will.
The content of a Letter of Wishes is as individual as the deceased. The Letter of Wishes is signed by the deceased setting out whatever the deceased wants to communicate to their executors or family members.
A will becomes a public document if it goes to probate after the deceased’s death. A Letter of Wishes is a separate private document that remains confidential and not available for everyone to pursue.
Many probate solicitors recommend the use of a Letter of Wishes to accompany a will so that the Letter of Wishes can be reviewed and changed without necessarily having to change the contents of the will.
It is however always sensible to speak to your will and estate planning solicitor to check if any changes should be made to your will, especially if there are any significant life events (such as the arrival of grandchildren ) or a major change in assets.
Wills and leaving your estate to your spouse
The decision to leave your entire estate to a spouse has to be carefully considered as it is not the right option for every family.
If your wealth is not great it may be the case that your spouse will need all the estate. However if you are wealthy and your estate is likely to exceed your spouse’s lifetime needs then family relationships are a key consideration when deciding whether to leave all your estate to a spouse. Bruce Forsyth’s wife has always been reported as having a very close and loving relationship with her step children. That means that Sir Bruce Forsyth presumably had confidence that his wife would act on the Letter of Wishes that accompanied his will.
Sadly that is not the case in all families as a spouse may not have a good relationship with his or her own children or stepchildren or the spouse might chose to remarry. That is why it is so important to balance the benefits of inheritance tax planning by leaving your estate to your spouse with the realities of the size of your estate and your individual family circumstances.
Contact Us Today For Inheritance Advice
Chris Strogen
Oct 30, 2018
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7 minute read
Should I Become Executor of a Will?
Often people appoint a friend or family member as an executor in their will to manage their estate, sell assets and pay the debts and tax and to distribute legacies to beneficiaries. It feels like an honour to be asked to fulfil the role of executor (assuming you are asked as it is not that uncommon for people to only find out that they are one of the executors of a friends or loved one’s estate after the deceased has passed away!) but executors can quickly realise how onerous the ‘’honour’’ is.
Sometimes, because executors have been personally appointed by the deceased to act as the executor, they feel that they have to ‘’go it alone’’, not realising just how time consuming a task acting as an executor can be or how difficult it is to resist pressure from friends and family to sort out the estate quickly. For executors who feel under pressure or all at sea with what to do with the paperwork, the admin and form filling and handling of queries and demands from beneficiaries, there is help is at hand in the form of instructing a professional specialist solicitor to deal with the estate. Acting with the executors the solicitor will guide everyone through what can be a very upsetting and daunting process.
The benefits of an executor getting professional legal help in sorting out an estate is highlighted by the recently reported case of Glyne Harris. He has hit the headlines as he has been ordered to pay about £341,000 in inheritance tax as a result of his personal and legal obligations as the personal representative of Helena McDonald’s estate.
How on earth could this liability have been made against Mr Harris? A good question and one I am sure Mr Harris wishes he had asked earlier. Mr Harris paid the majority of the deceased’s estate to a beneficiary on the understanding that the beneficiary would be responsible for payment of the inheritance tax from his legacy. The beneficiary disappeared leaving HMRC pursuing Mr Harris for the £341,000 and with nothing in the estate to pay the tax man. The Court has ruled that Mr Harris is responsible for the inheritance tax bill. That is because a personal representative of a person who dies without a will or the executor of a will is personally liable for paying any income , capital gains tax or inheritance tax due, even if they haven’t received a penny from the estate.
What are the top tips if you find that you are asked to be an executor of a friend’s or loved one’s will?
If you are asked to be an executor of a will it is a voluntary role. You can decline the honour. It is important to ask who the other executor/s will be. If the other executor is a named professional in a law firm you may feel far more relaxed about your appointment. On the other hand if the other proposed executor is a family member that you know that you will struggle to work with it may be best to tactfully decline the appointment
If you are appointed as an executor without first being asked to act , or if your circumstances have changed after the will was drawn up or for any other reason you can decline to act as executor and renounce the role
If you want to act as an executor you have the option of appointing a solicitor to handle everything and administer the estate. The solicitor’s fees are met out of the estate. The appointment of a solicitor not only reduces your executor workload but also means that if a mistake is made ( such as paying out the estate to the beneficiaries before the tax is paid ) you can potentially pursue a claim against the solicitor under his insurance
If you are the executor of a will it should ideally have been drawn up professionally. Why? If the will isn’t drawn up by a specialist solicitor it can be ambiguous .That in turn can lead to more complexities and time in sorting out the estate and ultimately to more legal expense in resolving the mistakes in the will
As well as being personally liable for paying the tax man the executor is also liable to make sure all debts are paid and that the right beneficiaries are given the correct legacy. This can be a minefield if the will is ambiguous or there are a large number of beneficiaries or someone makes a claim against the estate alleging that the deceased didn’t make reasonable financial provision for them in the will. If the executor appoints a solicitor to handle the estate those worries are taken away from the executor.
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What next?
Well firstly don’t panic. The case of Mr Harris is very rare. What isn’t so unusual is the stress that executors find themselves under trying to do a good turn and handle an estate without the time or legal know how. Solicitors can be very user friendly and the cost of a solicitor taking the worry and stress of sorting out the estate administration and paperwork following a friend or loved one’s death can be the best option, you are still the executor but have a professional to share the burden with you.
For legal help with executors, wills or probate please contact us.
Chris Strogen
Jul 17, 2018
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5 minute read
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We put a lot of legal information on our website and if you have a single question about your situation, you should find an answer in our blog here.
If you need a greater level of help, please use this form and one of our team will call you to make an appointment. Please note that we cannot offer Legal aid.
Unfortunately due to the level of single question enquiries we receive, we cannot guarantee to provide written answers to individual questions posted via this enquiry form.
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Call us on 0345 222 8 222
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Email us at info@evolvefamilylaw.co.uk
