What is deliberate deprivation of assets?
A typical example of the term deliberate deprivation of assets was given recently, in a case whereby a woman had been diagnosed with dementia and her children wanted to know if they could set up a trust fund or have her sign over her share of the house in order to avoid paying inheritance tax and allocate the money instead towards their mother's future care.
Firstly, as the woman had already been diagnosed with dementia, it was unclear whether she would have the mental capacity to make any legal arrangements such as share transfers.
Assuming that she still did have the mental capacity however, there was still the problem of deliberate deprivation of assets.
If the mother gave the house away or sold it six months or less before she went into a care home, this would be deemed deliberate deprivation of assets by her local authority. If the actions were carried out earlier, then she could still be the subject of a review, with the potential of reversing any activity which had taken place.
The amount of inheritance tax which would be ultimately due on the woman's estate would depend on:
- the value of the final estate (if it is valued over £325,000 then inheritance tax would be payable at 40%)
- whether she survived for at least seven years after making a gift of the property
If you suspect your parent may be showing the first signs of dementia or another form of senility, then it would be helpful for them to plan their estate, so this could be done much more simply and effectively, before power of attorney is finally sought.
Probate in Australia for ex-pats
Ex-pats who have emigrated to Australia should make themselves aware of what needs to be done when applying for probate in Australia – and pass that information on to their loved ones whilst they are still alive.
The process can become complicated whereby the individual has assets remaining in the UK as well as Australia and so the advice of a probate practitioner should be sought. However, if no assets remain in the UK, then the process is often much simpler and can be brought to a conclusion within a few weeks.
Most often, probate will include the need to reseal an English Grant of Probate in Australia. For this to take place, the value of the deceased's assets within Australia will need to be valued and submitted along with an original copy of the English Grant of Probate or Letter of Administration, a copy of the original death certificate and ID for the executors of the estate.
When it comes to applying for probate in a different country, it is always advisable to seek the help of an experienced international probate specialist, who can instruct you each step of the way and make the whole process a little easier and less stressful for you during what is undeniably an upsetting and emotional time.
IWC Ltd has a number of international probate experts who can advise you on each aspect of the probate process in any individual country. Call us today on 0800 612 6105 or 020 8150 2010.
Minister complains about funeral costs
A Scottish minister is complaining about funeral costs – and believes he has an answer for families who are forced to take out loans in order to pay for their loved one's funeral.
The Rev Bryan Kerr, minister at Greyfriars Church in Lanark, is appalled at the increasing cost of funerals which have risen by 80% over the last ten years to around £3,500.
With increasing numbers of families and individuals turning to high interest loans to meet the financial shortfall of a funeral, he has criticised councils and funeral directors of "bleeding the system dry".
In addition, Rev Kerr says that the government is not doing enough to help people facing this financial crisis, with only half of the applicants for relief actually receiving any money. Even those who are eligible only receive on average, around £1,225 – leaving a shortfall of £2,275.
Rev Kerr suggests that a basic funeral allowance should be made available to everyone, drawn from National Insurance funds with the option to top the fund up if a more elaborate ceremony is required. He acknowledges that the government in response would be likely to raise taxes, but says: "..we all need a funeral of some description".
What are your views on the cost of funerals? Do you have any alternative ideas as to how we can all help our loved ones with funeral expenses?
Artist's secret trust fund triggers legal battle
An artist's "secret" trust fund has led to a bitter legal battle, launched by one of his children.
Lucian Freud, who painted portraits of the Queen and Kate Moss, died three years ago, aged 88 – leaving an estate worth almost £96 million.
Lucian had led a truly bohemian lifestyle, having married twice, had a number of affairs and fathered 14 children – most of whom he did not see regularly.
In his will, he left his London home and £2.5 million to his loyal assistant. The rest was allocated to a secret trust, run jointly by a solicitor and one of Freud's daughters. No mention was made specifically of any of his children individually and the trustees have so far declined to reveal the instructions behind the trust, but say that they are "both absolutely entitled" to it.
This ambiguity has led to Paul, one of Freud's sons, launching a claim in the High Court to be awarded the portion of the trust which he feels is rightfully his.
Paul is claiming that the legality behind the trust is questionable, and is arguing that his father may well not have left any instructions at all to the two women currently managing the trust. This would then mean that £42 million was never the subject of a will.
With such a complicated romantic and family life, one can only wonder why this eccentric multi-millionaire chose never to leave clear instructions regarding his estate but instead left it to his loved ones to battle it out after his death.
Training courses in Sharia law on offer
Training courses in Sharia law are now being offered to solicitors in smaller practices who are not familiar with the concept – although experts at IWC Ltd have been offering Sharia law wills for some time now.
The new courses being offered to Law Society members are being advertised as an "introduction to Islamic Sharia law for small firms". They have been designed following Law Society guidelines which it released last month, stating that solicitors should be able to draft wills which are Sharia-compliant.
These guidelines have since been the source of much controversy, as Sharia principles are as yet not recognised within English law. Already, anti-Sharia law groups are campaigning against bringing theology into the realm of the legal sector and Baroness Cox has stated that she finds the Law Society's encouragement for Sharia law "disturbing". However, in our view, it cannot be argued that with a significant Islamic population within the UK, that there is a need for it to be addressed and incorporated somehow, to cater for the needs of Muslims who own assets within the UK.
Once again leading the field in professional will writing and probate services, our will writing experts at IWC Ltd are already fully qualified in the drafting of Sharia law wills which are compliant within English law.
Probate Service changes makes for faster service
Changes to the way in which the Probate Service operates, has resulted in significantly decreased probate process times, in the majority of cases.
The changes, which were implemented on 22 April this year, focused on the probate application fee structure – which was often complicated and commonly caused significant delays.
Recently released statistics however, show that since this new structure was adopted, the Probate Service has issued 161,000 grants of representation submitted by probate professionals within its target of seven working days. In addition, it has issued 97.6% of its grants of representation through applications submitted personally, within its deadline of eight weeks.
A grant of representation is usually presented to the executor of an estate. This documentation is required in order to allow the executor to begin handling the deceased's financial affairs – liaising with banks and other financial institutions, paying bills and taxes before finally distributing the remainder of the person's assets.
In the past, it could often take several weeks in order for applications made by probate professionals to be processed. It pays therefore, to use a probate expert, when dealing with the death of an individual. Our probate experts at IWC Ltd can ensure that you will receive the best legal advice, the best value for money and in most cases, a speedy service. Contact us today on 0800 612 6105 or 020 8150 2010.
The perils of ignoring probate
One of the perils of ignoring probate was highlighted recently, when a "squatter" was granted ownership of a house which would normally have belonged to a different gentleman.
The semi-detached house in London, was originally owned by Doris Curtis, who died in the late 1980s, leaving one son, Colin. Colin had lived with his mother for around ten years, to help look after her in her old age. He continued to live in the house for approximately another ten years after her death, until he inherited another property from his aunt and decided to live in that house, instead.
It appears that Colin had never officially sought probate to deal with his late mother's estate but continue to live as he had done until the time of her death, claiming that family problems had always distracted him from seeking probate.
For the last eighteen years, Colin has never even visited his late mother's house.
Meanwhile, a year after Colin moved out of the home, a builder working nearby learned about the vacant property and decided to start renovating it, despite not owning the house. He spent several years doing so, and finally in 2012, he moved in and applied for adverse possession from the Chief Land Registrar – a few weeks after squatting was criminalised. His application was turned down but, realising that he could effectively now be arrested for squatting, the builder appealed to the court. In a shock move, Mr Justice Ouseley granted him permanent possession – costing Mr Curtis potentially hundreds of thousands of pounds in lost inheritance.
This is a tragic example of what can happen if you don't deal with an estate quickly and professionally. By registering for probate in the correct manner, all financial aspects of your loved one's life can be dealt with fairly – ensuring that you inherit what's rightfully yours.
Billy Connolly's "Big Send Off"
I've recently been enjoying Billy Connolly's TV programme: "Big Send Off", in which "The Big Yin" takes a look at death through the eyes of some very unique and off the wall individuals and organisations across the US.
From voodoo ceremonies to drive through funeral parlours; eco death suits to gigantic graveyards, Billy sets out from the start to take a light hearted and entertaining look at what we arguably consider to be one of our greatest taboos – what happens to us when we shuffle off our mortal coil.
The Americans have capitalised on our fear of the unknown, creating macabre services and over the top monuments to its dead, in much the same way the Victorians did here in the UK.
All this is of course extremely interesting and delightful TV stuff for Billy, who relishes embarking on quirky road tours and adventures. He himself was diagnosed with prostate cancer and Parkinson's Disease only recently, yet his dry and perceptive outlook on life – and death, is infectious.
Our attitude here in the UK towards death on the whole, couldn't be different, it seems to me. Rather than celebrating a life, we often quite understandably tend to withdraw, speak in hushed tones about death and struggle to respectfully keep our dignity.
I wonder if any of these US "inventions" would ever take off here in the UK? What do you think might and might not become successful?
Determining domicility in the UK
A recent question in the press threw up the interesting question of determining domicility in the UK.
The individual in question had effectively moved to Portugal in 1969, selling their property and paying taxes over there. The only asset they retained in the UK was a bank account, into which was paid their pension, some shares and other annuities.
The shares are currently valued at £700,000 and the individual was querying whether they would be subject to UK probate, in the event of their death.
This is obviously a question of where they are considered to be domiciled – which, until recently, could be quite a difficult question to answer when it came to calculating inheritance tax.
There used to be a whole number of standard tests which would be carried out, to determine the deceased's financial and personal connections to the UK. The results however, could be contentious and many led to court cases being filed by executors and beneficiaries.
Now, there is only one test which must be carried out, which focuses on how long the deceased was resident in the UK, during the 20 years prior to their death. The findings of this test alone will indicate whether they were domiciled in the UK or not, regardless of any other financial or personal arrangements.
The reader was found to be essentially still domiciled in the UK and advised that whilst executors might well need to pay tax in both the UK and Portugal, unilateral relief might also be made available, meaning that liability to UK inheritance tax would be smaller, due to a double tax credit.