If a close relative has died intestate, meaning that they did not make a will, you may need to apply for a grant of letters of administration. This will enable you to gain access to your deceased relative’s assets, so that you can deal with their estate.
In certain circumstances, letters of administration are not necessary. If your relative left assets of under £5000 after the funeral fees were paid, you may not need to apply for a grant. Or if the only assets are shared property, or money in joint bank accounts it may not be required.
Relatives entitled to apply for a grant of letters of administration include the spouse of the deceased, their parents, or their children, and they must send the application to the probate registry. This can be a daunting experience; in addition to grieving the death of a loved one, you will need to deal with the complications that dying without a will can cause.
When someone dies intestate, it is often far more difficult to deal with the distribution of their estate. Some situations complicate the procedure even further. For example, if children under the age of 18 are entitled to benefit from the inheritance, more than one person must apply.
Tax can cause additional complications when someone dies intestate, there could be a hefty bill to pay, without any plan in place to lessen liability. It is possible to alter intestacy to mitigate tax, provided that everyone affected agrees. As inheritance tax can be complicated and confusing, it is advisable to instruct a legal practitioner to work on your behalf. They can apply for a grant of letters of administration and help you to deal with the distribution of the estate.
If the assets of your deceased relative have a large financial value, the laws of intestacy set particular rules on how you must distribute the assets. For example, if a spouse dies intestate and the inheritance exceeds a certain sum, other close relatives may be entitled to a portion of the deceased’s estate.
It may be possible to appeal against the way the assets are to be distributed. For example, you may be a close relative of the deceased and you do not believe that you are getting your fair share of the estate. Also, if you are a common law partner, that was financially reliant on the deceased, you may be entitled to appeal.
Appeals can be complicated and you must make an application within 6 months. If you intend to appeal, it would be wise to seek advice from a legal practitioner before the letters of administration are issued.
As executor of a will, it is your responsibility, if it is deemed that the Estate in question is valued at more than just a few thousand pounds (usually over £5000), to apply for a Grant of Probate or Letters of Administration, as part of the probate process.
This means that if the person died having prepared a Will, you must apply to the Probate Office for a Grant of Probate in order to begin the probate process. If no will had been made, this then changes from an application for a Grant of Probate to an application for Letters of Administration.
These documents are legally required before you will be able to deal with any financial matters, such as closing bank accounts or cancelling trust holdings and pensions. This of course also means that you will be unable to receive any money from the Estate until you have these documents in place. Bear in mind that you are likely to be charged a fee for receiving either a Grant of Probate or Letters of Administration.
Although a recent report called for the removal of Business Property Relief for family businesses, the government has refused to alter the way in which Inheritance tax liability is calculated.
Currently, those benefiting from probate by way of a stake in the family business are exempt from paying inheritance tax under BPR rules.
The UK’s Department of Business, Innovation and Skills has argued that by removing BPR, business owners will therefore be encouraged to restructure the business and bring in more revenue for the government.
The government disagrees however, believing that BPR is vital in supporting the sustainability of small, family-run businesses and that it must remain.
Are you the head of a family business? Have you thought about inheritance tax planning and do you agree with the government’s decision?
Power of Attorney ensures that someone you trust can take over your day to day finances and decision making if you should be left mentally unable to make decisions because of accident or illness.
Whether or not you have made a Will, if you become unable to make rational decisions and do not have Power of Attorney in place, then your case will be passed to the Court of Protection and it could take some time for arrangements to be made.
The Court of Protection was formed in 2007 as part of the Mental Capacity Act 2005 and was put in place to safeguard the assets of vulnerable individuals. However, since that time, there have been a high number of complaints about how cases are being handled.
To avoid the necessary action of dealing with the Court of Protection, ensure that you grant Lasting Power of Attorney to a trustworthy person, who can take over your affairs for you, should you become unable to carry them out yourself. Provided this individual is over 18 and has not been declared bankrupt, you can choose anyone yo like.
It is worth noting that the Lasting Power of Attorney must be registered before it is legally recognised. This means that the sooner you have it in place, the better. Even if you are in sound mental health, you can have peace of mind from knowing that the document is in place should you ever need it.