How To Value An Estate

The executor of someone’s will has many duties, and one of them – the first one – is to value the estate of the deceased. This job can wait until the grant of probate has been received, but once that is done it really must be the first thing that is done. Without a proper valuation, it is impossible to divide the estate up as it should be.

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The value of the estate impacts on everything that is written in the will, especially if the deceased has included percentages rather than actual figures (ie a beneficiary should receive 10 percent of the estate, for example) as without knowing the value of the entire estate the actual legacies cannot be worked out.

The estate’s value is also needed to work out how much inheritance tax is owed.

But despite – or because of – its importance, the idea of valuing an estate can often be a daunting prospect to any executor.

In order to carry out the valuation, certain things must be included. These things are property, assets (including businesses, partnerships, and business assets), any possessions, stocks and shares, and money including any savings. Money also includes pensions that are paid in a lump sum after death and life insurances, and can even include trusts if there are any that come to maturity.

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Despite their name, gifts also need to be included in the value of an estate if they are ‘gifts with reservation of benefit’. An example of this is a house that was given away but the deceased continued to live in (without paying any rent). Some gifts, however, are exempt and include gifts given to spouses or partners, wedding gifts, gifts that were given more than seven years before the death, and any maintenance payments. 

Shakespeare’s Will

Since it is the 400th anniversary of William Shakespeare’s death (and the 452nd anniversary of his birth, if records can be believed), it seemed appropriate to write about Shakespeare’s Will. But this is not the famous (infamous?) will in which he left only his second best bed to his wife, Anne Hathaway.

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This is Shakespeare’s Will, a play by Vern Thiessen, a Canadian writer who created it in 2004 at the behest of Geoffrey Brumlik, who was, at the time the artistic direction of the River City Shakespeare Festival. It premiered in February 2005 at the Citadel Theatre in Edmonton.

This play has been regularly revived since then due not only to its incredible popularity but also its enduring themes of love, life and language.

Shakepeare’s Will is performed by just one woman since the story and plot revolve around Anne Hathaway (Shakespeare’s wife) rather than the playwright himself. The action of the play takes place on the day of Shakespeare’s funeral. It is written in a form of poetic monologue that the man himself would have admired.

In the play, Anne is given Shakespeare’s will as she leaves his funeral – an act which surprises her and intrigues her, although she has no wish to read what it says. She would rather remember her marriage to ‘Bill’ as it was, not through a selection of trinkets left over from a life together.

Eventually Anne does read the will and feels she has been punished; her sister in law will receive the house, a house Anne loves desperately, and all Anne herself is given is the second best bed. Is this punishment because she was unable to save their son from drowning?

It is Anne’s recovery from the betrayal in death of the man she adored that is the true focus of the play, and this is where the strength of it – and her – lies. 

What Is A Guardian?

Wills don’t only consist of listings of who you want to inherit what; wills are also a useful and impactful way to ensure that your wishes for what happens after your death are carried out – if at all possible. One of the most important pieces of information that you can include within your will is what should happen to your children (if you have any) after you die.

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If their other parent is still alive, or if they are over the age of 18, this need not come into the will at all. But if your death would leave them an orphan who is under the age of 18, there will need to have been some provision made for them. The best way to make sure that they will continue to be cared for is to appoint a legal guardian.

If no guardian is included in the will then the courts will choose one for you. This may entail a court battle between different family sections (depending on the outcome), and could last for many years during which time your child or children will possibly be put into care. Not only that, but the judge may rule that a certain person will become the children’s guardian, and it might be someone you would never have wanted to do the job.

There are no set rules when it comes to choosing a guardian. You don’t, for example, have to choose a close family member such as a parent or sibling if you don’t feel that would be the right person to care for your child. Aunts and uncles, cousins, and grandparents are all eligible – as long as they understand what it takes to raise a child.

If you have no other family, or none of them are suitable to be your children’s guardian, then why not think of your friends? Good friends can be better guardians than family members sometimes, and can even have been closer than family.

There are no rules on who should or shouldn’t be guardians because it is an entirely subjective thing – the important part is that whoever is designated to look after your child or children has similar parenting values to you, and will bring the children up in a way you would be happy with. Not only will this mean that your values live on, but also that your child will feel more included, and won’t be additionally traumatised at a terribly difficult time.

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If money concerns you, why not set up a trust for your children? Or name them as beneficiaries of your life insurance? The trust could even be left in the charge of the guardian, to use as is needed to ensure the child is happy and healthy, and then pass over to them when they become 18.

There are two other things that must be considered; even if the person or people you want to be guardians are perfect for the role, you need to ask a) whether your children like them and get on with them, or get on with their own children should they have any, and b) do they even want to be guardians? As much as they may adore your children, actually being responsible for them is a different matter and suddenly being confronted with the task on your death could be too much for them. Speak to them about it first, get their consent, and only then write it in your will – there will be so much upheaval for your children if you go ahead and choose them anyway, it’s just not worth doing. 

Leaving Money To Charity

There is no doubting that charities do wonderful things. They raise money for those causes that would otherwise generally go without, they bring attention to problems across the world and closer to home, and they do it all – for the most part – through donations from the general public.

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And therefore it shouldn’t be a surprise to learn that a high number (around 46%) of people choose to leave a gift to charity in their wills. This is especially true if the charity has helped them or their family in some way, or when it is a cause that is very close to their hearts.

It is not as straightforward as it may seem, however, and there are certain issue and problems associated with leaving this kind of gift.

One issue comes with choosing a set amount of money to leave as a gift to charity. If, when you die, your estate is worth less than it might once have been – care home fees are a good example of how this can happen – then the set amount still stands. In some situations this can be the majority of the estate! Other beneficiaries could end up with much less than you intended as a result, and in some cases the estate may not even be able to cover the cost. A better way to include a charitable donation within your will is to use a percentage rather than a set amount. Even if the value of your estate goes down, the charity – as well as everyone else included – will still receive some money.

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Another problem comes from the charities themselves. It is possible to check the probate service to ascertain whether you have been left any money, and charities do this a lot – they may then contact the family to discuss the matter, which of course can make a difficult and emotional time even worse. If you do not want something in your will to be made public then it is best to write a ‘letter of wishes’. This document is kept with the will but the details within it are kept private.  

It is a good idea – as previously discussed – to talk about the contents of your will with your family. It can come as a shock to find out that some of their loved one’s estate is going to go to charity, and telling them beforehand, giving your reasons, will often soften the blow.

Charities disappear fairly regularly due to lack of funding, and this is especially true for the smaller ones. It is important to keep up with the news of your chosen charity so that, in the event that it ceases to exist, you can update your will. Otherwise it may be contested and will definitely lengthen probate. 

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Famous Wills in The National Archives

The National Archives collects items and makes records available that relate to the UK’s history and important events. It’s a fascinating and impressive collection of all sorts of interesting things.

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Those things include wills – in fact, there are 102 famous people’s wills within the National Archives, and they have been put together to create a collection entitled PROB 1.

The wills date from the 16th to the 19th century, and some of the wills included are from Shakespeare, Admiral Lord Nelson, Jane Austen, and Henry Purcell.

From these wills it is possible to discover the famous person’s address, the name of their executor, who the witnesses were, and who were the beneficiaries (as well as what they received). Some wills even had accompanying documents with additional information written within them. For example, Lord Nelson’s will also includes a diary that was used by Nelson between September and October 1805.

The information that comes from these wills gives us a deeper understanding of the people who wrote them. Shakespeare’s will was written only a month before he died on 23rd April 1616 – did that mean he knew he was dying? Rather wonderfully, it is also one of only six places where the great playwright’s original signature can be seen. 

Talk About Your Will

We’ve said in the past that writing a will is one of the most important things you can do for your family, and it’s true. But talking to your family about your will – particularly those who are mentioned within it, or whom you wish to be your executor – is just as important. Although it may feel uncomfortable and awkward, but it is an important way to ensure that there will be no feuds and fights after you have gone.

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This talk is your chance to explain exactly why you have done what you’ve done. It will help your family to understand, and prepare them for what your will says.

The first thing to do when preparing for this talk – because preparation is essential if you want to make sure that you get everything said that you want and need to say – is to decide exactly what the outcome of the talk should be. You need to think about what your will says and spell it out in at least general terms. Let your spouse or partner know that they will be provided for, for example; let you children know that you have thought about them and your grandchildren in your will; if you are intending to leave any money to a charity, now would be a good time to pass on this information.

Remember that no one can make you change your will. If they do, and you do end up changing it, then it might be seen to have been written under duress and considered invalid. And anyway, it is entirely your decision as to who receives what.

Don’t spring the talk on your family and expect them to be happy to sit down and chat. Introduce the topic carefully and arrange a time in the near future to speak to them about it, preferably when everyone will be together to save you doing it more than once. This allows them to have time to get used to the idea, and will make them more receptive.

Make sure that you give reasons for your legacies, particularly if they are unusual or unexpected. This way your family will understand why you have chosen to leave money or property to people or charities. Let them know what you hope your will will achieve.

When you are done, ask for their suggestions – you don’t have to do anything with these, but it is a good way of making everyone feel as though they have contributed. As for their opinions too; you never know, something they say may make you rethink what you have initially written.

It could be a difficult conversation, but it will be worth it in the end. 

Resealing Probate in Australia

Probate isn’t easy at the best of times, but if someone dies and they owned assets in Australia then it can become even more complicated for the UK based executor. Australian assets will need to be ‘unlocked’ before they can be dealt with under UK probate, and then transferred to any beneficiaries.

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The executor will have many tasks to take care of, and the first one in relation to Australian assets is to apply for an Australian Grant of Probate. If this is not possible then the British Grant of Probate will need to be recognised in Australia – this latter option is known as resealing the Grant of Probate.

Having the English or Welsh Grant of Probate resealed is often a quicker and less expensive way to move forward than applying for a brand new Australian Grant of Probate.

However, if there was no will then no British Grant of Probate will be able to be applied for. Instead, the person who is dealing with the estate will need to obtain a Grant of Letters of Administration, which can also be resealed in Australia.

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The Grant of Probate is usually required in Australia, but if the value of the estate, or at least the Australian part of it, is low then it may not be necessary – it is best to contact the deceased person’s Australian bank to find out what they need. The Grant of Probate is always required if the asset is any kind of property.  

Not all solicitors are well versed enough in Australian law to be able to offer the resealing service; at IWC we are able to help. Just get in touch and we can discuss exactly what is required. 

What Is A Life Tenant?

A life tenant is, simply put, someone who has all the rights of a homeowner even though the ownership of the property they live in has been transferred to a third party (known as a remainderman). When the tenant dies, the remainderman will take possession of the property.

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This situation can happen when the homeowner wants to transfer the title deeds of the house to a family member, or even to a charity, but wishes to live in the house until they die. It can also happen if the homeowner wishes their spouse, partner, or other person to live in the house after the homeowner themselves have passed away and then, when that person has also died, for the remainderman to take possession.

Naming a life tenant has some benefits; the life tenant will be able to live in the house until they die, no matter what happens. In other words, the remainderman won’t be able to evict them, even if their relationship breaks down. It should be noted that the life tenants must pay all tax and maintenance costs as this will not be the remainderman’s duty until he or she lives in the house. The life tenant is also free to take in lodgers if they wish to (although once the life tenant dies any agreement with the boarders or roommates will be terminated), and they can redecorate or renovate the house itself, as long as it makes no negative impact on the value of the property.  

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Life tenants cannot sell the property (since they don’t own it), and neither can they leave it to anyone in their own wills

Should You Appoint A Professional Executor?

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Being someone’s executor is a job that comes with many responsibilities and many obligations that have to be fulfilled in order for a will to be dealt with properly. It is not an easy job, and not one that some people will either enjoy doing or be equipped to do. So before appointing a family member as your executor just because you think you should, it might be worth doing some research into using a ‘professional executor’ instead.

Whomever you choose will have a big job on their hands, and whether you decide on a family member, a friend, a work colleague, or a professional, you will need to sit down and discuss your will with them before the time comes for them to do anything. Make them aware that probate can take many months, and that many issues can arise, all of which they will be responsible for. If the person you have chosen is not comfortable with being your executor, you can’t force them to do the job. You will have to pick someone else.

You will need to personally consider whether asking someone who is close to you to be your executor is a good idea. They will just have lost you, and dealing with your estate might become too hard and they could find it overwhelming as they also deal with their grief.

Another question to ask is will you pay your executor? The job is a hard one, and it can take a long time to complete, and a professional will require compensation. Why then would someone else not need paying for their services just because they knew you well? The problem then becomes an issue of fairness; other family members may see the executor as gaining more from the will than anyone else, without perhaps realising all the work that goes into dealing with probate, work that can impact on the executor’s life and day job. Feuds can erupt from something like this.

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Hiring a professional executor can relieve the burden of responsibility from your family and friends. Plus, since they are well versed in what they are doing, they can deal with any problems that arise quickly, including tax questions and the setting up of trusts. They will also be able to value the estate, deal with potential claims, and trace missing beneficiaries should they need to.

The only possible downside to using a professional executor is that they can be costly, sometimes charging a large percentage of the entire estate as their fee.

IWC offers a fixed fee for this service, which will work out much less expensive than traditional solicitors’ fees, as well as giving you peace of mind that everything is running smoothly. Contact us for more details. 

How Much Could You Cost Your Loved Ones?

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Sometimes writing a will is just not enough. It’s a great start, and everyone should do it – immediately, there is no point waiting for something momentous to happen because life has a funny way of surprising us all, and not always in a good way – but simply writing your will and filing it away is not the end of the matter. Not always. And if you don’t tie up the final loose ends, studies suggest that your loved ones could lose out on almost £10,000.

This is due to not being able to find the assets listed within the will. Almost 40 percent of people who are named as beneficiaries have spent money (around £2,500) on solicitors in order to find missing assets which have been named in the will but aren’t immediately obvious, or which cannot be accessed – this could be because the deceased has forgotten to note down passwords and account numbers.

It can cost a lot of money to look for these lost assets, and there is no guarantee that they will be found. Therefore it is important to make sure that your loved ones will be able to find the information, and in some cases the assets themselves, they need in order to receive the bequest they were left.

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Of course, it’s not a good idea to leave your online banking passwords and so on written down and left in a drawer with your will, but one way to do it that is not only secure but will make things easier and quicker after you have died is to note everything down, put it in a sealed envelope, and leave it with your solicitor until your will needs to be executed. Should the information change in the meantime, a new list of passwords etc will need to be handed across, but as long as it is all kept up to date, it will make the probate process much less hard than it otherwise would have been, and it will ensure your loved ones receive the assets you want them to. 

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