The death of a parent is always a shock – even when it is expected. But what if you and your deceased parent were estranged in life? And what if there is no other family? What should you do?
The first thing to do is to find out whether there is a will or not. It could be that the executor of the estate, or the solicitor dealing with probate, will contact you directly to let you know whether you have been made a beneficiary. If you don’t hear anything, you will need to get in touch with the executor yourself, which could mean some investigation will need to take place. This will include searching through paperwork, contacting your deceased parent’s bank or solicitor, searching the London Probate Department, or putting in a request with the numerous companies whose job it is to store wills.
It may turn out that there is no will. In this case, the rules of intestacy will have to come into effect.
Unless you have expressly been made executor of the estate, it is unlikely that you will need to do anything in regards to distributing inheritances and dealing with property – as well as the other jobs that an executor has to contend with. And even if you have been made executor, it is entirely possible to renounce your executorship if it is not something you feel comfortable doing. Alternatively, if you do want to stay with the role that your estranged parent chose for you, you can employ solicitors to help you ensure that everything is done properly.
Whatever the circumstances of your estrangement, sometimes children of parents who no longer have contact with them can find that they have been disinherited. However, this does not mean that you are not entitled to a share of the estate. Some people simply cannot be disinherited – children can fall into this category as the High Court has ruled that parents should leave ‘reasonable provisions’ for their children. You may have to make a claim, and each case is looked at individually, but it could be that you still receive some of the estate.
The Inheritance (Provision for Family and Dependents) Act 1975 is in place in order to allow specific people to file a claim against a deceased person’s estate. The reason for the claim needs to be that they require financial provision from the estate, and there are certain circumstances that need to be reached in order to be able to do this.
Each claim is taken on a case by case basis, as the circumstances for each individual estate, claim, and situation will be different. However, there are only certain people who can claim under this act. The first of these is the spouse or civil partner of the deceased, and, perhaps surprisingly, this extends to any former spouses or civil partners. They must, however, not have re-married or entered into a further civil partnership. As well as this, there must be no provision within the divorce which means that they cannot make a claim under the Inheritance Act.
Another person who can make a claim is a cohabitee. But, there is a set of requirements that this person must satisfy before they will be able to make a claim. They must have lived with the deceased as husband or wife, and they must have lived with the deceased in that state for at least two years immediately before the death.
The children of the deceased are also able to make a claim. This includes both biological and adopted children. For deaths that occurred after 1st October 2014, this also extends to anyone who was treated as a child by the deceased. This category is sometimes a subject for debate as it allows adult children who have not been financially dependent on the deceased for a long time to file a claim.
Finally, anyone who was a dependant of the deceased. This means someone who was looked after by the deceased, and for whom the deceased was making a substantial financial contribution to.
In probate terms, a caveat is a way to have a look at someone’s will if the executor of the estate is reluctant to let you see it. You may want to contest a will, and to do so you will need to have a copy of the will that you have a problem with. The easiest way to get a copy is to speak to the executor and ask for one, but they may refuse for a number of different reasons. If you still want to see a copy of the will, lodging a caveat could help you.
A caveat is issued by the Probate Registry and is a legal document which prevents a Grant of Probate from being issued. It basically stops probate from even beginning, and can remain in place for up to six months. This can have a huge impact on the estate of the deceased and the beneficiaries who are waiting for their inheritance.
A caveat could be used if you have concerns over the validity of the will itself, or if there is a dispute between anyone included within the will and the executor him or herself. It can also be used if you have any concerns about whether the testator had the capacity to write the will in the first place, or if you are worried about any potential fraud issues.
Remember, however, that an executor can have the caveat removed if they believe there is no reason for it. One way to do this is to issue a warning on the person who has entered the caveat. The caveator will then have eight days to enter an appearance – this is used to explain the full reason behind the caveat.
It is best to talk through the problems with the executor before immediately entering a caveat, which should really only be used as a last resort.
Some people try to avoid probate if at all possible. And there are ways around it. But before you start to go down that route, are you sure that you don’t want to go through probate? Yes, it can be complicated and it can take a long time, but equally it can be simple and could be quick. And there are a number of benefits.
One major benefit of going through probate is that any creditor who has not yet filed a claim against the estate will have to claim within four months, rather than the year that they would have without probate. This can mean that less money has to be paid out of the estate to cover outstanding debts.
Property cannot easily be put into trust without probate. Putting a property into trust keeps it ‘safe’ for future generations or a later date. But you need to have the title to that property in your name, and this can often only be done through probate.
Probate can be an ordeal, but the benefits might be of use to you and mean that it is worth the hassle. And don’t forget, you can hire a solicitor or lawyer who is a probate specialist to help you. They can help you with the paperwork, advise you or what course to take, and even work out a plan for probate in general.
Inheritance tax planning sounds like something that only the rich and famous need to really think about, but is it actually something that everyone should consider? Although it may seem as though it’s only something that affects other people, inheritance tax can actually affect anyone and everyone, so ensuring that your estate won’t fall foul of the laws is an important part of creating your inheritance plan.
Inheritance can affect more people than you might think because once you add up your estate – savings, belongings, life insurance proceeds, your pension, and your property, it could well be over the threshold for having to pay inheritance tax. When property involved this is even more likely since house prices are rising.
There is an inheritance tax allowance of £325,000 on any estate. If the estate is worth more than that then tax will be owed on the ‘extra’ amount, and it is payable at 40 percent. However, if you have a spouse or a business interest (or both) then it is possible to carry out inheritance tax planning through your will. It could be that inheritance tax won’t be due at all since there is a spousal exemption from the tax, and also business tax relief.
If you are single, living with a partner but unmarried, or you have no business then your will may not be able to help you reduce inheritance tax. But there are other things you can do. For example, everyone has an annual inheritance tax exemption of £3,000 which can be used to give gifts. If you give more than £3,000 the rule is that you must ‘outlive’ the gift by a further seven years (otherwise it could still be subject to inheritance tax).
The best thing to do is to contact an expert who will be able to talk you through your options and reduce your liability for inheritance tax as much as possible.
Every will must have an executor. That’s the law. Or is it? Well, although it is true that there must be an executor for each will, the truth is that there must be at least one executor. In reality, it is perfectly valid and possible to have more than one should the testator require it. But why would more than one executor ever be needed?
In law, as many as four executors can be named in a single will and, if necessary, all four (or up to four) can apply jointly for probate. Once probate has been applied for, whomever is named as executor must continue in that role – but before this happens they can step down in need be. If this happens, and more than one executor has been named, then probate can still go ahead as there will be one, two or three other executors to take on the work. Executors should be told that they are being named as such in a will before the testator dies, but sometimes this isn’t the case and therefore it could well be that some of them may wish to walk away from the position. Having more than one executor makes this much easier.
Once probate has been granted, the executors must work together to make the process run smoothly. This can be difficult with more than one executor, and the concern is that some jobs won’t be done at all as everyone thinks someone else is doing them, and some jobs will be done more than once as everyone thinks it is their job to do. The best way that multiple executors can deal with the estate of the deceased is to work together, discussing all decisions before acting. It is fair, although it is time consuming and can sometimes be difficult to get in touch with everyone.
In this case, one person should be named as ‘lead executor’. How this person is chosen is not particularly important, although if someone has experience or knowledge of probate then they may well be the best person to choose. Alternatively, the executors can apply jointly to appoint a solicitor to carry out the work for them.
Many of the UK’s biggest banks have limits on the amount of money that is allowed to be released from deceased customer’s accounts without the need to apply for probate first. However, these limits are set to increase for some banks.
Normally a bank or building society will freeze the accounts of someone who has died. This is in order to give the executor the time to apply for the grant of probate. However, this process can take a long time – sometimes months, and, in the case of incredibly complicated estates, years. The executor will be able to access money required to pay for any funeral expenses and inheritance tax that might be owed.
Some banks also allow small amounts of money to be withdrawn to give to bereaved relatives as long as a death certificate can be produced. Each bank is different, but in general, the amounts that were allowed to be withdrawn without probate would be between £15,000 and £20,000.
Recently, however, some high street banks and building societies have agreed to raise this limit. This will help those who are trying to wrap up their deceased relative’s estate and ease the burden at a difficult time. The Royal Bank of Scotland, for example, has raised its limit from £15,000 to £25,000. Lloyds Bank has raised its limit from £25,000 to £50,000. HSBC has removed its upper limit and has said that it will assess each case individually. Nationwide are looking at doing the same thing.
The raising – or removal – of these limits will mean that the estate can be dealt with much more quickly, and although probate will still be required for other assets, at least those left behind will be able to continue their lives without money being too much of an issue.
Inheritance tax can, at first, be an inexact science. Although it may seem as though it is something that can be calculated exactly, there are various factors that mean it is sometimes overpaid. Equally, your inheritance tax payment can be underpaid too. Why is this?
When someone dies the estate will often have to pay inheritance tax (IHT), assuming the estate is worth enough for the government to charge IHT on it. The executor will need to fill in a tax return and pay the money calculated to HMRC. Only after this will they be able to obtain probate and distribute the assets.
The difference in the figures comes when an asset – for example a property – is sold for more or less than the valuation. With properties this is very common, and they do often sell for less than the asking price. However, the tax returns and the payment will already have been made at this point, and therefore the overpayment will need to be recovered. Equally, if the property (or other asset) sold for more, an additional payment will have to be made.
If an overpayment has been made then you will need to contact the Capital Taxes Office (CTO) which is part of HMRC. Unfortunately the process of recovering money like this can take many months, even in the most straight forward of cases. This can cause a major impact on the distribution of the rest of the estate, as everyone has to wait until the money is returned.
Wills can be challenged for a variety of reasons. One such reason is that of ‘undue influence’ exercised over the person who wrote the will. If this is alleged to have happened, then the person who has made the allegation will need to prove that it did, indeed, happen. That can be a difficult thing to find evidence of, especially as the person who would have the answers is sadly the one who has died.
Alleging undue influence often happens when one sibling stands to inherit a large majority of an estate, and their siblings believe that the only reason for this is that they exerted this undue influence over their parent. It may or may not be true, of course.
But what does the term undue influence actually mean?
Firstly, it is not enough to say that mere influence was involved. It has to be seen as undue. Simply suggesting ideas to those who are considering writing their will may not be wise, but neither is it illegal or unethical. Undue influence is. An example of undue influence could be if a carer were to completely isolate their charge from their friends and family, making them entirely dependent on them – and then putting pressure on them to look favourably on them in their will. Or it could be that one child tells lies about their siblings, and keeps on at the parent until they believe the lies despite their better judgement.
If a solicitor is concerned about the reason behind any sudden changing of someone’s will, they will often ask to see the testator alone, to discuss the changes with them and ensure that no undue influence has been at work. However, without any direct proof, or any information from the testator, there is not much that the solicitor themselves can do.
In order to prove undue influence, the claimant must show that the defendant was able to exercise the influence and that they did so. They must also show that the influence was, in fact, undue and that it related directly to the will. It is extremely hard to do this, but ways to try to prove undue influence include witnesses, medical evidence that show the testator was frail either mentally or physically, social workers and carers, family members, and solicitors.