As a specialist private client solicitor, advising families on Wills and estate planning, I am comfortable talking about death and the need to plan for it. I know that many families don’t feel able to talk about Wills or what might happen when a loved one dies. That can mean that when a family member does pass away, with or without leaving a Will, the process of sorting out their personal and financial affairs can seem totally overwhelming, often not helped by the need to obtain what is known as probate before the family can access funds and distribute inheritances in accordance with the Will.
What is ‘’probate’’?
When someone dies their assets and property (known as their ‘’estate’’) are left in limbo until someone gets the legal right to deal with their property and possessions by applying for a ‘’grant of representation’’ or ‘’letters of administration’’.
How do you apply for probate?
In general the process is as follows:
Check and see if there is a Will – the Will may be kept with other important papers, at the bank or at a solicitor’s office. If there is a Will the people authorised to sort out the deceased’s financial affairs (known as ‘’executors’’) will apply for probate. If there is no Will then family members can apply for the grant;
Estimate the value of the estate – this is necessary so that the Inland Revenue can check if inheritance tax will be payable;
Arrange for the payment of inheritance tax due prior to the application;
Complete a probate application form and an inheritance tax form;
Swear a document;
Submit the application.
What happens after probate is granted?
The executors will need to:
Pay any remaining inheritance tax that is payable;
Pay any debts ;
Collect any property , for example to sell a share portfolio or a family home or investments;
Distribute the estate, either under the terms of the Will or, if there is no Will, under the intestacy rules.
Do you have to get probate?
Sometimes it is possible to sort out a deceased’s financial affairs without applying for probate, for example when:
The deceased person doesn’t own any property or property is jointly held and passes automatically to the survivor;
The deceased held a joint bank account with a husband, wife or partner so the savings or bank account pass automatically to the joint account holder;
The deceased`s bank may consider the amount in question small enough to release without the formality of probate (typically less than £5,000).
Is getting probate straight forward?
How complicated the probate process is depends on how complex the deceased’s estate, family and Will is. Sometimes getting probate is straight forward but there are often things to sort out or check such as:
Entitlement to bereavement allowance;
Whether it is in the family best interests to change a Will after death ( known as a ‘’deed of variation’’) – that can result in inheritance tax savings;
Resolve any inheritance claims by family or dependants who want to challenge the Will or do not think that they will receive reasonable financial provision under intestacy rules;
Obtaining a presumption of death certificate;
Sorting out life insurance and pension claims – these benefits may or may not pass under the terms of the deceased’s Will;
Sorting out the creation and administration of any Trusts created by the Will;
Changing the appointment of Executors.
How much does probate cost?
Some people have complex finances and businesses and there is therefore a lot of legal work to do to get probate. However, even if the deceased’s estate is not complex, it often pays for executors to take legal advice to make sure that the estate does not pay more than it needs to in inheritance tax and that the estate is distributed correctly. If you need advice on getting probate please call for a bespoke quote, at a cost that is clear and straight forward. An initial hour meeting is of course free.
If you need advice on obtaining probate or preparing a Will or Lasting Power of Attorney then please give me a call on +44 (0) 1477 464020 or email me at firstname.lastname@example.org
Is it a gift or a loan? Helping your children on the property ladder.
In an age where a lot of young people and divorcees recovering from the financial split from their spouse can’t get on the property ladder without help from the ‘’bank of mum and dad’’ a reported case in the Daily Mail highlights the importance of recording agreement over property.
The reasons behind why Mr and Mrs Joy gave their daughter £90,000 are complex but in essence the Joy family dispute was simple: was the £90,000 payment a loan, as claimed by Mr and Mrs Joy, or a gift, as asserted by their daughter, Lucy.
After a Court battle a judge has recently ruled that the money was a gift and is not repayable by the couple’s daughter, Lucy. This is despite Mr and Mrs Joy reportedly re-mortgaging their family home to raise the £90,000 for their daughter on the basis of an alleged verbal agreement that Lucy would then transfer an inherited property into Mrs Joy’s name. The key factor in the Court decision was that there was no written agreement or contract between parents and child.
As a family solicitor I am often told by clients that they don’t need a written agreement or document between their family members. The Joy case is a salutary reminder of the importance of writing things down. That is not just because family can fall out but also to protect family members from:
The donor’s estate being liable for extra inheritance tax as the HMRC might not view a payment to a family member as a ‘’gift’’ without formal evidence;
The person receiving the money facing a financial claim on divorce and therefore needing to establish that money received from family was a gift to them as an individual or a repayable loan;
The person receiving the money facing bankruptcy or a Court judgement – without a written document a third party or a Court may not accept that the money was a loan and not a gift.
There are many different ways in which family property agreements can be recorded, such as:
Cohabitation agreement between cohabiting couples;
Declarations of trust between joint owners;
Loan – not secured on the property ;
Mortgage – secured against the property ;
Prenup agreements between an engaged couple;
Postnup agreements – suitable for a married couple who acquire property after marriage, for example, inherited from a parent;
Record of gift of property or deposit to purchase a property.
Whatever the type of document and however the paperwork is drawn up, the important thing is that there is a written agreement. By spending the time recording the property agreement a lot of time and money can be avoided when it comes time for the loan to be repaid, the property sold or the estate sorted out. The English philosopher, John Locke, said ‘’where there is no property there is no injustice’’. I say ‘’ where there is a written agreement on property there’s normally no injustice’’.
For advice on family agreements and estate planning please call +44 (0) 1477 464020, use our contact form or contact me by email at email@example.com
Family ownership of property: sharing property wealth with the next generation
According to a recent article in the Telegraph householders over the age of 50 now own about 75% of the country’s homes. In figures that amounts to about 2.8 trillion in property equity.
The Telegraph research information was provided by leading agents, Savills, who report;
The generational divide in property ownership applies across Britain;
That 60% of people who are currently renting a property want to buy their own home;
The number of households that own their own homes has reduced by 10% to about 62%, reflecting rising house prices and static wages.
As private client and family solicitors we are often asked about housing options when, for example:
A husband or wife is getting divorced and can't afford, on their own, to take over the mortgage to stay in the family home ;
An older couple want to make sure that their son or daughter is able to get on the housing ladder but are concerned about their deposit being kept safe;
A family is thinking of moving in together so there is a three generation household;
A person is thinking of buying a house and doesn’t know if their partner should be a joint owner or not;
An older person is thinking of downsizing and either transferring their house to a child or gifting money to a child or grandchildren.
No two families are the same and so one solution doesn’t fit every family. Generally there are a number of property solutions, for example:
If a husband or wife can't afford to stay in the family home after a divorce either because they can't afford to take over the existing mortgage or to borrow more money to buy off a former partner then a parent or other family member could stand as guarantor to the mortgage ;
If a couple want to get their child on the property ladder they could lend the child them money with the loan secured against the house. The loan can suit the family, for example, interest may or may not be payable or interest could be accumulated and only paid if the house is sold;
If three generations are moving in together the property could be jointly owned by all the adults with a deed of trust setting out the details of property ownership or the mid generation couple could be the legal owners with the older generation having a right to occupy the house;
A person buying a house could either buy jointly with their partner or on their own – if the property owner is in a relationship they should sort out a cohabitation agreement whether or not their partner is a joint owner or lives at the property with them;
If a person is thinking of giving property or money away they can do so during their life through what is known as lifetime gifting. Gifts can be made outright or money can be put in trust for family members. Alternatively the gift could be made outright but protected by the family member receiving the gift asking their partner or spouse to sign a cohabitation agreement or post-nuptial agreement.
What solution fits?
The right ‘’property solution’’ is down to a number of factors, for example:
Inheritance tax implications of making a gift or putting money into a trust;
The need to protect family money from potential financial claims on the separation or divorce of a family member;
Family circumstances and personal preferences.
Given the range of options it is always sensible to get legal advice from specialist private client, estate planning and family solicitors before gifting money to family members or moving in with a partner. Early bespoke advice can make sure that you make the right decisions for you and your family and protect your loved ones.
For advice on estate planning and family law please call us on +44 (0) 1477 464020, use our Contact Form or email firstname.lastname@example.org
Cohabitant claims and inheritance: Court rules that a man’s partner of 42 years is entitled to a share of his estate
The High Court has decided that a woman who received nothing when her partner of 42 years died should receive a share of his estate.
79 year old Joan Thompson had to make a Court claim under the Inheritance (Provision for Family and Dependants) Act 1975 as her late cohabitee, Wynford Hodge, left his estate, valued at about £1.5 million, to friends and tenants.
The Court ruled that Ms Thompson should receive a property valued at about £225,000 plus £160,000 to help support her and an extra sum of about £28,000. That means that Mr Hodge’s partner will get about a quarter of the estate.
Is it fair?
On an inheritance Court claim, when disputing a Will, there are always two sides to the argument:
If someone has gone to the trouble of thinking about how they want to leave their estate and to make a Will their wishes should be honoured or;
If someone hasn’t made reasonable provision for a spouse, cohabitee or dependant in their Will then there must be some form of redress.
As Joan Thompson was Mr Hodge’s non-married partner the decision again flags up the rights of cohabitees. There have been recent calls for cohabitees to have legal rights on separation and on death. This decision will be welcomed by those calling for a reform of the law.
The basis for the Court decision
To the non-lawyer it can be very hard to understand the rationale behind a Court award. Some would think that as Mr Hodge had left his estate to friends and tenants (rather than close relatives) his cohabitee of 42 years should have been awarded more than a quarter of his estate whereas others would view the award as generous in comparison to earlier Court decisions and the principle of freedom of inheritance.
When coming to its decision the Court had to weigh up what it thought was reasonable provision for Ms Thompson. In earlier Court rulings a partner making a claim under the 1975 Act would usually only receive the right to live in a property for the duration of their life and the house would revert to the deceased’s estate on the cohabitee’s death.
In Mr Hodge’s situation, the property had been bought with the intention that the couple would retire to live in it. Accordingly the Court ruled that Ms Thompson should have the property transferred to her, rather than just have a right to live in it for the rest of her life. The Court also awarded her £28,000 to renovate the property and about £160,000 to live off as a capitalised sum.
Lessons to be learnt?
Everyone should make a Will but it is particularly important to get professional advice on your Will and estate options if you have financial dependants. That’s so that you can make reasonable provision for them or at least be made aware of the potential claims that could be made against your estate and how to minimise the risk of those claims. Many people are reluctant to leave large gifts to dependants as they fear that they won't be financially responsible or will ultimately leave the money to a non-family member. Some of those concerns can be addressed by creating trusts and appointing trustees, thus minimising the likelihood of your estate and beneficiaries having to face an inheritance Court claim under the 1975 Act.
It is also vital to update your Will as circumstances change. Why? Well your dependants may change over time and certainly what you and/or the Court may consider ‘’reasonable’’ financial provision may change over the years, depending on the age and financial status of your dependants as well as the size of your estate.
If you need a Will or want me to review your existing Will and provide estate planning advice and would like to discuss your options and costs then please give me a call on +44 (0) 1477 464020 or email me at email@example.com
I suspect a lot of people don’t really know what a Lasting Power of Attorney does and most other people think that they don’t need one or that they can’t afford one. In my view everyone needs a Lasting Power of Attorney and no one can afford to not have one in place .Sadly most of us don’t realise how important a Lasting Power of Attorney is until there is an accident or care decisions have to be taken about an elderly relative.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney authorises nominated members of your family and /or trusted friends to act on your behalf if you are not capable of making your own decisions.
There are 2 different types of Lasting Power of Attorney:
Health and welfare – this type of Lasting Power of Attorney allows your nominated family or friends (called attorneys) to make decisions about your medical treatment and care needs if you are not able to do so as you lack capacity;
Property and financial affairs – this type of Lasting Power of Attorney allows your agreed attorneys to manage your financial affairs (for example to manage your bank account, pay bills or to sell your house) if you lack capacity to make your own decisions.
You can do one or both types of Lasting Power of Attorney – the decision is yours.
You chose the attorneys. The attorneys only act if you don’t have capacity or, in other words, if you are not capable of making your own financial or health and welfare decisions.
The Lasting Power of Attorney is registered with the Office of the Public Guardian but won't be used unless there comes a time when you lack the capacity to make your own decisions. While you have capacity you can cancel a Lasting Power of Attorney or nominate new attorneys.
Do I need a Lasting Power of Attorney?
Most people think that an elderly relative might need a Lasting Power of Attorney but don’t think that they need one. However no one knows when you might need an attorney to quickly act for you, either on a temporary basis (after a ski or car accident) or on a permanent basis. That is why everyone needs a Lasting Power of Attorney to cover the ‘’what ifs’’.
What you can't do is wait until you or your relative has lost capacity (either as a result of an accident, health scare or dementia) and then ask a solicitor to prepare a Lasting Power of Attorney. There is an option available if you or a relative are incapacitated and don’t have a Lasting Power of Attorney already in place. An application can be made to the Court of Protection for a deputy to be appointed to look after your affairs. The appointment of a deputy costs a lot more in legal fees than drawing up a Lasting Power of Attorney and there is likely to be a delay between the Court of Protection application and the appointment of the deputy. During that period your friends and family won't be able to access bank accounts to help manage your financial affairs and pay essential bills or make health or care decisions for you.
So a Lasting Power of Attorney is a bit like a Will; everyone needs one at any age, even if none of us like to think of accidents, dementia or death.
How much does a Lasting Power of Attorney cost?
A bespoke Will and Lasting Power of Attorney drawn up by an experienced and regulated solicitor isn’t as much as you might fear.
Very few law firms publish price information on their websites. Evolve is one of the first law firms to publish fixed fees for the preparation of Powers of Attorney so you have an idea of our charges before making a call or emailing us.
So, if you need a Lasting Power of Attorney (health and welfare OR financial), then the cost will be £240, including the VAT. If you want both types of Lasting Power of Attorney the cost is £450.
If you are married and you both want a Lasting Power of Attorney (health and welfare OR financial) then the cost will be £450 for both of you. If you and your spouse or partner both want both types of Lasting Power of Attorney (health and welfare AND financial) the cost is £720.
There are registration fees payable to the Office of the Public Guardian for every Lasting Power of Attorney that is registered with them.
Many people ask how Evolve can afford to be so upfront on charges. My response is that we wouldn’t feel comfortable doing it any other way: When Evolve was set up in 2015 the firm’s vision was to put clients (and not fees) at the heart of what we do by being trusted legal advisors, who charge a fair and transparent level of fees for a bespoke service.
What do fixed fees mean for you? It means you get private client Lasting Power of Attorney advice tailored to your personal situation, based on what is best for you (not us), in return for charges that you can afford and understand.
What do I mean by that? To give an example, I met someone who thought they didn’t need a Lasting Power of Attorney at their stage of life. I talked to him and looked at his personal position: he was a business owner, keen on winter sports and skiing off piste, separated from his wife and with a new partner. I realised that if he were to have an accident and lose capacity then without a financial Lasting Power of Attorney his business might quickly get into trouble as there would be no one with the power to handle matters on a temporary basis (to pay bills and salaries) or long term basis (to employ a manager or sort out a sale of the business). Without a health and welfare Lasting Power of Attorney the man’s next of kin would be his estranged wife, rather than his girlfriend, parents or siblings. He realised it was essential that he sorted out two Lasting Power of Attorneys quickly to give peace of mind. And, as his situation was urgent given his planned ski trip, we were able to prepare the Lasting Power of Attorneys on the same day!
Everyone’s personal and financial circumstances are different and that is why it is so important that everyone takes bespoke advice, at a cost they can understand, so they have protection in place to protect them and their family.
If you need a Will or a Lasting Power of Attorney or want me to review your existing Will or Power of Attorney and want to discuss your options and costs then please give me a call on +44 (0) 1477 464020 or email me at firstname.lastname@example.org
In my experience people are not confident at asking how much their solicitor will charge and equally many solicitors aren’t great at being upfront about their charges. That means some people are tempted to use non-solicitor Will writing service to prepare their Will, not realising that a bespoke Will drawn up by an experienced and regulated solicitor isn’t as much as they might fear.
Very few law firms publish price information on their websites. Evolve is one of the first law firms to publish fixed fees for the preparation of Wills and Powers of Attorney and a detailed pricelist so you have an idea of our charges before making a call or emailing us.
So, if you need a straightforward Will prepared for you, then the cost will be £180. There are no hidden extras. It includes VAT.
If you are married and your husband or wife needs an identical Will, then the all-inclusive cost for both Wills is £240.
If you already have a Will then you may want to get a solicitor to check and review it. That’s because family and personal circumstances change so your old Will may not be ‘fit for purpose’. An example of this is a couple thinking that their old Wills are ok in saying that money is being left to their ‘grandchildren’, not realising that the wording would exclude the newest addition to the family, who is the daughter of their son’s new wife, so a step daughter. Without the Wills being carefully re-worded, their step-granddaughter would not inherit anything. Some clients have very complex finances and business interests and need in depth advice on trusts and estate planning or on domicile. However, even if your situation is not complex, it would be easy to fall foul of inheritance tax and you may therefore benefit substantially from tax advice. If you need advice on tax structures, trusts or overseas assets then please contact us for a quote.
Many people ask how Evolve can afford to be so upfront on charges for straightforward Wills. My response is that we wouldn’t feel comfortable doing it any other way: When Evolve was set up in 2015 the firm’s vision was to put clients (and not fees) at the heart of what we do by being trusted legal advisors, who charge a fair and transparent level of fees.
For me, it means I get to work as a lawyer with happy clients who trust my advice and aren’t worried about my fees because they are always transparent. In turn, happy clients who trust us will recommend us to their friends and families.
More importantly, what does it mean for you? It means you get private client Will and Power of Attorney advice tailored to your personal situation, based on what is best for you (not us), in return for charges that you can afford and understand. What do I mean by that? To give an example, I met someone who thought they needed a new Will. I talked to him and looked at his existing Will. I realised that it was still ‘fit for purpose’ and there was no reason to prepare a new one. I told him so, and told him when he might need to come back to us. . For another lady it was essential that she sorted out a new Will quickly because she was divorcing her husband who already had a new family so it was important, to give her peace of mind, that the new Will gave her estate to their children and not him. And, if the situation is urgent, we may be able to prepare a will the same day!
Everyone’s personal and financial circumstances are different and that is why it is so important that everyone takes advice, at a cost they can understand, so that their Will or Power of Attorney meet their individual needs.
If you need a Will or Power of Attorney or want me to review your existing Will or Power of Attorney and would like to discuss your options and costs then please give me a call on +44 (0) 1477 464020 or email me at email@example.com