The vast majority (about 70%) of those who need assistance with the administration of a will, turn to a professional. In many cases the firm involved may have helped with the writing of the will and been named as executors as part of this process. If so they will be responsible for administering the estate and establishing the amount that is to be charged cost of probate.
Probate fees are generally paid from the estate and come in on average between 2 – 5%, or between £3000-£5000. Of course these figures vary greatly depending on the size of the estate and the number of beneficiaries in the will. There are other factors which may slow the process down and consequently drive the costs up.
If a solicitor or bank has been employed to execute a will then there are a few key tips to be aware of in order to ensure that you keep the probate fees to a minimum. It is worth noting that the value of the estate should have no bearing on the costs. You should request a quotation for the work in advance. In most cases you will be told that this is impossible as there are too many variables involved.
It is true that there are elements of the process which may be difficult to predict, but any solicitor, or bank, that has been through the process before should be able to give you a reasonably close approximation of costs. Once they have you should insist on being allowed to find an alternative and then ask if they can match any lower price.
In order to ensure that the process is done as quickly and efficiently as possible make sure that you stay on top of all of the paperwork and keep meetings and other communication to an absolute minimum.
In order to maximise the value of the estate it is worth investing in any properties to be sold as part of the administration process. This will help ensure that the properties are sold quickly, which will keep the fees down, and should also help to realise their maximum value.
The best way to keep costs to a minimum is by using a fixed-fee probate service that gives you a clear price up front and a supportive service along the way. To find out more call our free advice line 0800 612 6105 open until 10pm, 7 days a week.
Where once, inherited items tended to take the form of property, heirlooms and cash, some individuals are choosing instead to pass on holidays or travel gifts to loved ones who either enjoy travelling or who, the person perceives, could simply do with a good time and a rest.
As unusual as this may sound, the idea of leaving a holiday to someone does also have its financial benefits, should the travel gift be integrated within a trust, which can offer substantial tax savings on the final estate.
In this way, a valuable inheritance such as this is protected from any creditors or change of circumstance such as divorce, which could negatively impact on it.
When planning your estate, consider options other than the most obvious ones. An experienced and knowledgeable professional will be able to offer suggestions to ensure that whatever you leave behind will not only be financially sound but memorable in the personal sense.
If you were advised to take out a discretionary trust as part of your will to minimise your inheritance tax liability as part of your estate planning then you should be aware that since the introduction of the transferrable nil rate band in 2007, these trusts are no longer deemed necessary and it may make more financial sense to close your trust.
In the past, if a will included a discretionary trust, this meant that the first spouse’s nil rate band was placed into trust. Now however, with the transferrable nil rate band, as a married couple you can transfer the amount of inheritance tax free allowance between each other. This means that after you both die, your joint estate may have the benefit of two tax free allowances.
If a discretionary trust remains in place, then it will need to be closed between three months and two years after your death, which can attract a substantial cost – much more so than if the will is simply redrafted whilst you are still alive.
There may also be the possibility that if your spouse lives at least another twenty years after your death, more tax will be payable on the final estate than there would be if the trust is closed now.
Contact the team at IWC Ltd who will be able to advise you of the best way to prepare for your discretionary trust to be closed.
Almost a million people in the UK have been diagnosed with some form of dementia, a potentially debilitating condition which sadly, leaves many unable to make day to day rational decisions.
With this in mind, it is always worth considering as the child of a parent with dementia, appointing a Lasting Power of Attorney so that your parent can continue to be cared for effectively as the condition progresses.
An LPA simply means that someone trusted, other than your parent, can take over their financial affairs, ensuring bills continue to be paid or that savings are protected.
Applying for an LPA at the first sign of dementia means that the process is quicker and can be arranged more easily. If however, the condition has progressed to the stage whereby the parent is considerably mentally incapacitated, then you will need to apply to the Court of Protection for a court-appointed representative to take over their financial affairs.
In this instance, then during this time, all of the parent’s assets will be frozen, with no financial transactions able to take place, which can obviously cause considerable issues.
If applied for well in time, all creditors and utility companies should be notified of your actions and intentions before making an application to the court to be granted an LPA. The application should include details of all assets, family relationships and a formal, medical assessment of the individual’s condition. You will also need to include details of your own financial status.
The whole process should take in the region of six months, if no objections arise or further investigation is not required. Once an LPA has been granted, estate planning in the form of IHT arrangements can begin.
The Office of the Public Guardian (OPG) has revealed plans that it is to introduce a means of completing a Lasting Power of Attorney document (LPA) online.
Currently, applying for an LPA demands a significant amount of paperwork to be completed, which can prove to be quite complex. It is for this reason that many forms are returned as they are either incomplete or incorrect, if not prepared by a professional.
An LPA is normally created at the same time as a Will is prepared. It simply indicates that should a person become mentally or physically incapacitated and unable to carry out their normal financial or legal affairs, a nominated family member or legal representative can do this instead.
Unfortunately, this simply means that individuals will find it easier to complete the documentation using digital technology, rather than being able to arrange an LPA online – a function which has still yet to be discussed due to issues of security.
In the meantime then, people are still advised to use a will writing professional to complete and order an LPA.
A dispute over inheritance, which has raged for the last three years; is still continuing even after the death of one of the people involved.
Several years ago, a widowed pensioner invited his nephew and family to come and live in his expansive farmhouse, to keep him company and offer additional security.
Unfortunately, the relationship quickly soured, with the family taking over opposite wings of the farmhouse and rarely interacting.
In 2009, the owner, Mr Taylor, prepared a Will, leaving over half of his estate, which was valued in excess of £1 million to various charities. The remainder of the estate was to be divided between his remaining family members, stipulating that his current guests were only to receive their inheritance if they were to leave the farmhouse within six months of his death.
When they learned of the contents of this Will, the family members within the farmhouse were outraged and began a legal battle, stipulating that the uncle had verbally promised to leave them the entire farmhouse, meaning that the other relatives and charities would receive precisely nothing.
After his death, a judge overruled the contents of the Will, awarding the family members the entire farmhouse – attracting an Inheritance Tax liability of £160,000 on the estate.
Subsequently however, this decision is now undergoing another review at the Court of Appeal, brought about by the executors of the estate, who have stated that there was never any proof of this verbal agreement.
And the moral of the story? Make your wishes regarding your death and your estate, transparently clear to everyone who is set to benefit.