Family disputes over wills may now incur costs

Family disputes over wills may now incur costs

With family disputes over wills on the rise, claimants should ensure that they have strong grounds for contesting a will, after one judge ruled that a failed claimant should pay costs of over £65,000.

In this groundbreaking case, millionaire Ken Jordan died, leaving his entire estate to his partner, Ms Elliott.  However, his illegitimate daughter did not agree with the contents of the will and promptly entered a caveat against the estate, thereby effectively preventing Ms Elliott from obtaining a grant of probate.  Despite this, she did not subsequently make a claim against the will, forcing Ms Elliott to eventually issue proceedings to prove the will, in 2014.

The daughter, Ms Simmons, argued that the will was in fact invalid, due to lack of capacity, knowledge and approval and undue influence.  The case eventually went to trial in December last year, where it was found that there were no grounds for suspecting that the will was not valid.  Ms Simmons had no firm evidence to support her claims, and the fact that she never actually raised a challenge to the will, meant that her argument was rejected.

In addition, Deputy Judge Murray recognised that Ms Elliott had been forced to accrue substantial legal costs and declared that the defendant should be responsible for meeting these costs, to the tune of over £65,000.

Ex-husband’s inheritance appeal goes ahead

Ex-husband's inheritance appeal goes ahead

The Court of Appeal heard a case recently, whereby the ex-husband of a woman was granted an appeal to contest the validity of his late mother in law's will, in a bid to claim his alleged inheritance.

Prior to their divorce ten years ago, the couple had allegedly formed an agreement whereby on the mother in law's death, £100,000 from her estate would go to her daughter and the remainder of the balance of the estate would then be divided between the same daughter and her then-husband.

Although no dates are given, at some point in time after this event, the couple divorced and the wife's mother passed away.  Her daughter was indeed left £100,000 but instead of the balance of £150,000 being divided between the daughter and the now ex-husband as previously agreed however, the entire balance was left to the woman's children.

The ex-husband subsequently argued that he was entitled to half of the balance which amounted to £75,000 and brought about a probate claim to challenge the validity of the will.  This initial claim was turned down however, as the court found that he did not have enough "interest" in the will as a creditor of the beneficiary.  The only people entitled to challenge a will it noted, are actual executors, beneficiaries and creditors of the deceased.

The Court of Appeal felt differently, however.  Lord Dyson ruled that the man was connected enough to the estate to maintain sufficient "interest" and recognised that the only way he could fight for his money was to challenge the validity of the will.

The case will now go to appeal.

Intestacy problems on the rise

Intestacy problems on the rise

The BBC reported yesterday that according to Citizens Advice, the number of enquiries it receives about intestacy problems has more than doubled over the last five years.

Despite attempting to drive home the message that dying without a will can cause immense stress and financial pressure on those left behind, Citizens Advice still received 3,747 intestacy enquiries last year, compared to 1,522 in 2011.

These figures appear to contradict the findings of a survey carried out by YouGov last year, which indicated that 38 percent of people in England and Wales had made out a will – a rise of three percent from the previous year.

Failing to make out a will does not only mean that the funds from an estate may not be distributed in the way that the deceased would wish.  It also means that any charities could potentially miss out on vital income.  Also, effective estate planning will not have taken place and so the next of kin could lose thousands of pounds unnecessarily, by way of inheritance tax.

The BBC report for example, cites the case of a man who left around £700,000 but no will.  His cousin administered the estate but this process took around two years and £240,000 was given to the tax man.  The rest was split among 17 people, a number of whom had never even met the deceased.

Interestingly, the number of enquiries received from executors of a will also rose last year to 11,137 from 8,160 in 2011.  This shows how estates are becoming increasingly more complex, making the role of executor more difficult, particularly for those who attempt to distribute an estate without taking specialist advice from a probate expert.

What is the “Residential Nil Rate Band” and will it affect me?

What is the "Residential Nil Rate Band" and will it affect me?

Have you heard about the impending Residential Nil Rate Band?  Last year, the government announced that starting from April 2017, some homeowners with estates valued at less than £2 million will benefit not only from the current Nil Rate Band of £325,000 per person, but an additional Residence Nil Rate Band of £100,000 per person, (rising to £175,000 by April 2020), on their death.  For a married couple or those in a civil partnership, this means that up to £1 million of their estate can be passed on, without attracting any inheritance tax fees.

There are conditions, however.  For the Residence Nil Rate Band to take effect, the  property in question must be passed on to either a child or a grandchild of the deceased.  In addition, the property must also have actually been the deceased's main residence at some point, even if they subsequently moved to a smaller house or into a care home.

As with the existing Nil Rate Band, the Residence Nil Rate Band can be passed to the surviving partner if not used on the death of the first, making a possible maximum total of £1 million.

Where estates are valued over £2 million, the Residence Nil Rate Band will decrease by £1 for every £2 over this value.

Although this is great news for most of us, those who have set up a discretionary trust in the past should be careful.  A discretionary trust was initially a useful way of passing on a person's Nil Rate Band to their children or grandchildren, before the law changed in 2007.  For those with estates valued under £2 million, this clause could interfere with the application of the new Residence Nil Rate Band.  However, for those with estates valued over this amount, a discretionary trust may remain the sensible financial option.

How to ensure your grandchildren receive their inheritance

How to ensure your grandchildren receive their inheritance

 How to ensure your grandchildren receive their inheritance

A recent survey by insurance company Sunlife has revealed that a large number of grandparents intend to leave part of their estate to their grandchildren, but surprisingly, don't trust their own children to ensure that these instructions are carried out.

The results of the survey showed that seven in ten grandparents plan to leave their grandchildren an inheritance.  55 percent of those grandparents are looking for ways in which they can protect this aspect of their legacy, without having to rely on their children to pass it on, according to their final wishes.

In some instances, such a legacy is not as straightforward as simply leaving a sum of money in a will.  It may be that the grandparents wish to leave a property such as the family home instead – the problem being that children under the age of 18 are not legally able to own property.

One way to get around this problem is to leave assets in trust for the grandchildren.  When doing so, it is vital to consider an appropriate age for the child to receive the inheritance, so that they are mature enough to use it wisely.  An age contingent trust such as this is normally written into the will.

It is worth remembering however, that any assets left in a trust may incur an inheritance tax charge every ten years, of up to six percent of the value of the trust, above the IHT threshold.

The key to ensuring that your grandchildren will benefit from your estate as you would want, is to take control now and have a will and trust drafted, which both reflect your wishes and family circumstances.  Through effective estate planning, it may also be possible to identify ways to reduce any inheritance tax payable on your assets.

#iwcprobate #bereaved #probate

How to avoid new probate fees

How to avoid new probate fees

With government proposals underway to alter probate fees from fixed to banded, hundreds of families could be faced with a bill of up to £20,000 after their loved one dies.

To avoid passing on this potentially significant financial debt to their next of kin, many individuals with assets tied up in property are seeking ways to avoid probate.

One such way of doing this could be through a living trust.  This allows the owners of a property to pass it on much more simply to their beneficiaries, without any need to register for probate.

Either married couples or single people can sign a declaration of trust, thereby becoming a trustee or co-trustee.  Once this is in place, the property in question can then be transferred from current names to the trustee(s).  In this way, the owners still retain ownership of the property but this is now through the living trust.

Once all trustees are deceased, the property then passes to the person or persons specifically named within the trust document as successor trustees.  This is often a fairly simple and fast process which does not require a probate application, thereby saving potentially thousands of pounds, depending on the value of the property in question.

It is worth noting that living trusts can be revoked, so if an individual has been named as a successor trustee but the owner trustee changes their mind further down the line for whatever reason, they can alter the trust or cancel it altogether, should they later decide to sell their home.

Remember however that although a living trust can help to avoid probate with regards to the property included in your estate, there may well be other cash and assets which need to be dealt with separately.  Under the new government proposals, if these are valued at less than £50,000, they will not be subject to probate legislation.  However, to ensure that they are passed to your chosen beneficiaries, a will should also be drafted, giving your precise instructions.

#iwcprobate #bereaved #probate

“Government increasing taxes on death” says probate expert

"Government increasing taxes on death" says probate expert

probate Government increasing taxes on death says probate expert

Government proposals to alter fixed rate probate fees to a banding system has been called "inheritance tax by the back door" by probate specialist, Tony Crocker of IWC.

The fixed fee for probate applications rose recently – a move, said the government, which was deemed necessary to fund additional administrative work carried out by the Probate Service.

These new proposals however, which are out for consultation until 1 April, would see probate fees being charged on estates valued in excess of £50,000 according to a banding system.  Fees would then start at £300 for estates valued between £50,001 and £300,000; up to £20,000 for estates valued above £2 million.

YM EstateValue Government increasing taxes on death says probate expert

Currently, estates under £5000 are not subject to probate legislation and the government plans to raise this threshold to £50,000, meaning that according to its figures, over half of estates would pay no probate fee at all.

IWC questions the validity of this view however, with the average London house price now standing at over £500,000.  It is these house prices, the company claims, which will cause problems for executors faced with paying money up front for probate fees, funeral fees and inheritance tax at 40% – and not enough money in the deceased's bank account to cover them.  These executors will be forced to offer up the remaining funds themselves or, as the government suggests, to take out a short term bank loan, until the property sells and they can recoup the funds – which of course will attract interest rates and affect their credit rating.

Although packaged as a move to assist those dealing with smaller estates, IWC's Tony Crocker says that, in its bid to raise £250 million for the Exchequer, the government is actually "giving with one hand and taking with the other".

For anyone who suspects that their next of kin may find themselves struggling financially with these new proposed changes, they may be able to avoid probate altogether, by placing their property into trust, now.

In our next blog post, we'll outline how trusts can be a means of avoiding probate, how to create a trust and what happens to it after your death.

#iwcprobate #bereaved #probate

Delay in death order proceedings for missing peer’s son

Delay in death order proceedings for missing peer's son

George Bingham, son of legendary peer Lord Lucan, has been forced to take his bid to claim his father’s title of 8th Earl to the High Court.


The elusive Lord Peer disappeared in 1974 amidst accusations that he had murdered his children’s nanny and attacked his estranged wife. Since that time, there have been many supposed sightings, but no proof of his whereabouts.

Until 2013 and the introduction of the Presumption of Death Act, this meant that whilst his father remained missing, Mr Bingham was unable to lawfully claim the title.

The new Act now allows relatives of persons missing after seven years, to apply for a death order. This order acts as a document officially declaring them dead, so their affairs can then be dealt with. The Earl’s son took advantage of this change in legislation to apply to inherit the title, but was turned down by the Lord Chancellor at that time.

With his recent marriage about to take place and no doubt concerned about the issue of having his own children and means of succession, Mr Bingham subsequently applied for a death order earlier this month. He issued a public notice in a local newspaper which stated that anyone objecting to the claim had 21 days to stop the process. Unfortunately, the Royal Courts of Justice deemed that although Lord Lucan had already been officially declared dead for probate reasons by the High Court in 1999 – 25 years after his disappearance, this had not proved death “for all purposes” – namely allowing his son to take over the claim to his title of 8th Earl.

It appears likely that the fact that Lord Lucan is still wanted for questioning over the murder of the nanny and the matter of the peer’s title are sufficient grounds for delaying the application of the death order and instruction for another hearing to take place next year.

#iwcprobate #bereaved #probate

Death of a child: a guide for divorced parents

Death of a child: a guide for divorced parents

The death of a child deals both parents a devastating blow, regardless of their marital status.  This tragedy however, can be made all the more stressful by warring parents, at a time when emotions are running high.

Both biological parents have the same right to apply for a Grant of Letters of Administration and it is during this process that the difficult discussion regarding funeral arrangements will take place.

Hopefully, the grieving parents will agree on the details of the funeral but sadly, some do not.  In this instance, the decision will then lie with the court, which will attempt to deal with the matter as quickly and fairly as possible.

In Fessi v Whitmore, a 12 year old boy was the victim of a tragic accident.  His father had been his main carer since his parents were divorced, and the pair had recently moved away to a new area.  The father wanted his son's ashes to be interred close to their new home, whilst the mother requested that they be scattered close to the old family home at Nuneaton, where the boy's paternal grandparents' ashes had already been scattered.

The court in this instance reached a decision which was a compromise between the two, and the boy's ashes were finally interred at Nuneaton Crematorium, where all family members could come to pay their respects.

In another recent case, a bereaved mother was kept in a state of grief, whilst her son's ashes were retained at a funeral parlour for over a year, under the instruction of the father, who did not want them to be released to his former partner.  It was only following legal intervention that the boy's ashes could be released, and he can now finally be laid to rest.

Will pension drawdown increase inheritance tax liability?

Will pension drawdown increase inheritance tax liability?

The introduction of pension freedom earlier this year has led many people to ask: “Will unused pension drawdown increase the amount of my inheritance tax liability?”

Now, individuals aged over 55 are being given what is known as a “pension pot”, worth thousands of pounds in addition to regular state pension, to provide them with an income meant to see them through their retirement. 

Providing an alternative to annuities, this pension pot has provided a debate as to whether individuals would be better off simply drawing down funds from the pot, as opposed to taking out an annuity to provide a regular income during retirement.

The pension pot has caused concern since its introduction, with many wondering what would happen to any remaining funds in the event of their death. 

With the tax man taking 40% of the value of all assets above the nil rate band, an additional sum worth potentially thousands of pounds could have tipped many over the edge of liability.  Thankfully, in the recent Autumn Statement, it was announced that inheritance tax would in fact not be payable on any unused pension drawdown funds.

The Treasury has said: “The government will legislate to ensure a charge to IHT will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death.  This will be backdated to deaths on or after 6 April 2011”.

This clarity will provide welcome relief to many, who feared that they would need to spend all of the money before their death – a risky business when the funds are designed to provide a regular income for perhaps up to thirty years or more.


#iwcprobate #bereaved #probate 

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