Unfortunately, many people often find themselves in the surprising situation of having been named as executor of a Will, after a loved one has passed away.
Although this can sometimes be a difficult task, with executors held personally liable for any mistakes made in the payment of inheritance tax; in most instances, the estate is not exceptionally valuable and probate is relatively straightforward.
A degree of detective work is usually required in the beginning, to uncover the whereabouts of the Will, before ascertaining what bank or savings accounts and assets the deceased owned.
The next step is to outline all outstanding debts and ensure that these are paid before settling the Inheritance Tax bill and distributing the remainder of the estate in accordance with the wishes of the deceased.
If the entire estate is valued under £5000, there may be no need to apply for a Grant of Probate, but a professional probate expert will be able to advise you, every step of the way if required.
Numerous challenges faced by farmers in recent years have led to many farming families diversifying their business to bring in additional revenue and tap into other industries including tourism and leisure.
What many farmers don’t realise however, is that with diversification comes the possibility of increased inheritance tax liability.
Whereas normally, farm land which is being used for the purpose of farming is exempt from inheritance tax due to Agricultural Property Relief, a change of use may well see that relief being removed.
One way around this is for the farmer to investigate whether, should they lose APR, would they then qualify for Business Property Relief instead, for their new venture.
This effect on inheritance tax liability must always be considered by agricultural land owners, when considering diversifying their farming activity.
Following calls for a new approach to wealth tax, the Lib Dem party has suggested introducing an exemption from inheritance tax on homes where owners have agreed to pay more council tax.
For many years, The Lib Dems have criticised the concept of inheritance tax, claiming that it is unfair, due to it taxing funds which have already been subject to income tax.
These new proposals, which the party is calling “Mansion Tax”, calls for the option to be given to owners of homes valued within higher price bands, to choose whether or not they would prefer to pay a higher rate of council tax in return for an exemption from inheritance tax.
The Mansion Tax proposals will be discussed in more detail at the party’s political conference in the next few weeks.
If you have been given the role of trustee of a particular UK trust, it is your duty to ensure that the assets contained within the trust are managed properly for the stated specific period of time.
Primarily, you will have what is known as a “fudiciary duty” to ensure that you act in the best interests of the beneficiaries of the trust, at all times, putting aside any personal conflicts or interests, if applicable.
In most instances, you will simply be bound to act on the instructions given within the trust, carrying them out to the letter. However, with some types of trust, such as the discretionary trust, you will be relied upon to act as you see fit, with the sole aim of maximising the value of the assets for the benefit of those who stand to gain from them.
The good news is that you as a trustee are not generally liable for any personal losses – provided you can demonstrate that you acted in good faith and in the best interests of the beneficiaries at all times. This of course applies only to the value of the assets being held in trust. Should any losses occur over this value, then you will be held personally liable.
Parents are being advised to save any surplus pension income, depositing it into a specific pension for their children, as a way of increasing the amount of inheritance they will eventually receive.
Usually, children will only receive less than half of the value of their parents’ estate, after Inheritance Tax and other outstanding debts have been paid. However, should their parents plan their estate carefully whilst still alive, this amount can be increased.
This is becoming increasingly relevant, when adult children aren’t able to save enough for their own retirement. The money put aside into the pension scheme means they aren’t able to touch it until the age of 55, when they can then use it to help them pay off any outstanding bills or their mortgage.
This form of financial planning means that the adult child becomes subject to tax relief and could see savings of several thousand pounds build up within a relatively small amount of time.
We’ve all heard of cases whereby a cash strapped individual has unwisely spent a windfall, gained through an inheritance – perhaps splashing out on toys for the children, holidays, or a new car, rather than saving it for a rainy day or investing it appropriately.
It can be sickening to think that the money you earned and saved through a lifetime of hard work and careful spending can be frittered away so easily. But is there a way to ensure that the money you leave to your loved ones is spent in the way you see fit, even after death?
Although you can’t dictate precisely how the inheritance should be spent, setting up a trust so that the money is cared for by adults until a child reaches a certain age, or similarly placing such conditions within your Will helps to maximise the chances of your hard earned money being spent on something sensible, rather than frivolous.
When planning your estate or writing your Will, make sure you express your wishes clearly, so that appropriate steps can be taken to include a trust or conditions within your Will.
After years of being protected through anonymity, it has been revealed that the Legal Ombudsman is set to publish a list of Britain’s worst probate solicitors and lawyers. This comes on the back of 7,455 legal cases which were investigated last year, with around two thirds of complainants winning their case.
Around a quarter of the complaints were based on what was felt to be excessive costs, with 12% of those, focusing on probate work.
The list will outline the sub standard service received by the complainant and is expected to include issues such as excessive fees and unacceptable delays.
The Legal Ombudsman can award up to £30,000 compensation for individuals who feel that they have been given sub standard legal service in any way.
Another case of ambiguity after death raised its head in the press recently, when the daughter of a deceased woman was accused of using money left for the welfare of the her late mother’s cats for her own use, and failing to notify the authorities of the inheritance.
The deceased’s estate was valued at £136,000 after the sale of her home; the proceeds of which, she had stated, were to go towards the care of her 24 pet cats and kittens.
Her daughter stated that after debts and beneficiaries had been paid however, there was only £50,000 left, which she deposited in a bank account she named “Cats Account”, and used to keep the cats in the sort of lifestyle to which they had become accustomed, strenuously denying that she used any of the money on herself.
During this time, she gave no notification of her financial dealings to the Department of Work and Pensions or to her local council; feeling, she says, that the money was never hers so it didn’t matter.
She admits that the bank account was in her name and that she had continued to claim benefits, but insists that she was simply carrying out her late mother’s wishes and that she had not benefitted at all.
The case continues but the deceased mother would have been better advised to indicate in her Will, precisely how the money should be stored and released to maintain the care of her cats.
Although rarely heard of in today’s society, War Bonds were first introduced around the time of the First World War and were seen as a means of funding the war for the government at that time.
War Bonds have no maturity date and to date, have still not been repaid by the government, despite assurances that they could be redeemed at some point after 1952.
As a rule of thumb, every £100 which was invested as a War Bond is now worth around £80, although holders will have been collecting a small amount of interest in the meantime.
This means that if they were to be sold and therefore form part of the value of the final estate, the executor would receive 80% of what they were originally worth at the time.
It can be difficult to accept the eccentricities of those you love and it can often come as a shock at the end of a person’s life, to realise that they have chosen to leave the bulk of their estate to another person, a charity or even a beloved pet.
If you are convinced that this decision is not within the usual nature of the person, then your first action should be to discuss it with the individual, bearing in mind that this could of course open up a whole can of worms and could very well lead to conflict.
Should you feel, during the course of the discussion, that the individual does not seem to be of sound mind then you can of course seek a medical opinion.
If your loved one is firm in their resolution and is judged to be of sound mind, then there is little you can do until after their death, when you can take steps to legally contest the Will.