Bereavement is a terrible time for everyone, but it is also a busy time, with many different things needing to come together in order for probate to be issued and for the deceased to have a funeral. It can be very easy to ignore or forget about all the legal and necessary things that need to be done at this time, but the longer they are left the harder everything will become. It will mean that probate will take longer, and that can be stressful and time consuming as well. It is particularly important to make things happen quickly if you – or someone else – was financially dependent on the deceased. You or they may be entitled to bereavement allowance, for example. At the very least, finances need to be sorted out to enable life to go on.
Probate can take many months to complete, depending on the complexity of the estate. The bereavement allowance can be up to £2,000, and is used to help those who were financially dependent on the deceased and who now will have a problem because of loss of or lack of finances.
The first thing that definitely needs to be done is to register the death. This is a relatively straightforward thing to do, and when it is completed the Grant of Probate can be issued, and the will can be executed. If the deceased died at home with no medical personnel present, then a doctor will be needed to provide a medical certificate showing cause of death. This can be taken to the register office (within five days) so that you can obtain a death certificate which is needed for everything else. If the deceased died at hospital or in a care home, the medical staff will usually be able to register the death for you.
The death certificate is required to have the body cremated or buried. You may wish to purchase additional copies of the death certificate as a variety of different organisations will need to see them, and rather than waiting for each one to send the certificate back, the executor can contact many of them at once, saving a lot of time.
Next you will want to look at funeral arrangements. The deceased may have had a pre-paid funeral plan, or perhaps they left instructions in their will or spoke about what they wanted when it came to their funeral. This will obviously make things easier for those who are arranging it, but if not there is no need to worry. Think about the person that they were, and you will be able to come up with the ideal funeral for them. Speak to the executors regarding money to pay for the funeral if there was no plan in place as they may be able to organise an advance from the estate.
A personal representative for someone’s estate may be able to step down, although it will depend on a number of factors that should be taken into consideration first. The first question that needs to be asked is whether they have been appointed as an executor, or as an administrator.
If they are an executor, they can choose to step down – except in the case of two exceptions. They can do this even if they initially agree to the task, and this can happen due to a variety of reasons including ill health, another bereavement, or workload. If the executor wishes to step down, they must sign a Deed of Renunciation. This document means that the executor agrees to give up the role and any responsibilities that come with it. The deed is then filed with the Probate Registry and is made final. If the executor changes their mind and does want to take on the role after a Deed of Renunciation has been filed, a court can assess the situation. They cannot simply start carrying out the work without a court having given them permission.
There are two situations in which an executor is not able to step down from the role. The first is when the Grant of Probate has already been issued to the executor. If an executor no longer wishes to perform the role, then they cannot be issued with a Grant of Probate. There is the possibility that the Grant of Probate can be revoked so that the executor can step down, but this would only happen in exceptional circumstances.
The second situation in which an executor cannot step down is if they have ‘intermeddled’ in the estate. This is when the executor has begun and administrative work before the Grant of Probate has been issued.
An administrator is somewhat different to an executor. An administrator is a personal executive who is appointed by the Probate Registry if there are no executors named in a will (or they have died or stepped down), or no will at all. If they don’t want to take up the role, they don’t have to do anything – they simply don’t act. There are no forms to complete and no one to notify.
Family disputes over wills may now incur costs
With family disputes over wills on the rise, claimants should ensure that they have strong grounds for contesting a will, after one judge ruled that a failed claimant should pay costs of over £65,000.
In this groundbreaking case, millionaire Ken Jordan died, leaving his entire estate to his partner, Ms Elliott. However, his illegitimate daughter did not agree with the contents of the will and promptly entered a caveat against the estate, thereby effectively preventing Ms Elliott from obtaining a grant of probate. Despite this, she did not subsequently make a claim against the will, forcing Ms Elliott to eventually issue proceedings to prove the will, in 2014.
The daughter, Ms Simmons, argued that the will was in fact invalid, due to lack of capacity, knowledge and approval and undue influence. The case eventually went to trial in December last year, where it was found that there were no grounds for suspecting that the will was not valid. Ms Simmons had no firm evidence to support her claims, and the fact that she never actually raised a challenge to the will, meant that her argument was rejected.
In addition, Deputy Judge Murray recognised that Ms Elliott had been forced to accrue substantial legal costs and declared that the defendant should be responsible for meeting these costs, to the tune of over £65,000.
Worried about inheritance tax.
It may shock you to learn that if you have been named the executor of a will, then you may well be held responsible for paying any inheritance tax (IHT) due on the deceased's estate, BEFORE you have received any money from probate.
If the deceased was a single person and their estate is valued at above £325,000, then you can expect to pay 40% of the value above this amount, if no tax reliefs are applicable. If they were the surviving partner of a marriage, the amount, known as the nil rate band, is doubled to £650,000. This means that thousands of pounds may be required to pay off the inheritance tax debt, before you receive a penny from the proceeds of the estate.
It may be that there are enough cash savings held within the estate to pay off this debt, in which case HMRC might allow you to make a direct payment to them, straight from the deceased's savings account(s). However, if there is not enough cash available, it will be up to you to make up the shortfall. Although you will be able to recoup the money when probate has been granted, you must find a way to pay the debt up front. You might choose to borrow the money from within the family or borrow it from the bank. Banks are very familiar with this scenario and, as they know the loan will be settled relatively quickly, they are often amenable.
A slightly better scenario arises when the bulk of the estate is made up of property. In this instance, HMRC will normally allow probate to be granted and the inheritance tax debt to be paid in installments over a maximum period of ten years. Be careful though – this extended term brings with it additional interest to be paid on the outstanding balance.
In some cases, the estate may be held principally in the form of shares. Technically, probate must still be granted and the inheritance tax debt paid before any shares can be sold. However, HMRC often offers some flexibility here and you may be able to discuss the possibility of HMRC waiting until the shares have been sold, in order for you to pay the IHT bill, so long as it is considered a priority when allocating proceeds from the estate.
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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.
The benefits of putting property into a trust
There are many benefits associated with putting property into a trust whilst you're still alive – particularly if you have dependants.
One of the main problems of the probate process of course, is the length of time it takes to secure, which usually increases depending on the complexity of the estate. On average, it can take several months to obtain a grant of probate, during which time all of your assets are frozen and cannot be used by the executors to pay off debts or funeral expenses. By placing your property into trust now, this then avoids the need to obtain a grant of probate for it, at a later date.
There are two main types of trusts associated with property – a fixed interest trust means that you are the only beneficiary of the asset during your lifetime and that it is automatically passed to your next of kin in the event of your death. A discretionary trust on the other hand, means that the trustees have complete control over how to distribute the trust's capital. Remember that in effect however, you are essentially then handing over the ownership of the property to them, whilst you're still alive. Bear in mind too, that you may incur tax charges during the lifetime of the trust – typically every ten years.