The government of the Isle of Man, which is not part of the UK or the EU, has recently cut its probate charges for non-resident probate applications, assuming the deceased’s only Isle of Man asset is a life insurance policy taken out by an Isle of Man insurance company.
There will now be a £250 maximum charge for any estate that is over £55,000. The charge used to be a maximum of £4,000 for estates over £125,000, and £8,000 for estates over £1 million. Not only that, but in the past there was no distinction between resident and non-resident applications. Since 1st July 2016, it makes a difference.
The changes have come about after the UK government as well as Manx-based insurance companies had discussions with the Isle of Man government about what was seen as excessive probate charges. The worry was that the price would have a major impact on the future economy of the Isle of Man, with people not wanting to purchase property there due to the high charges that their families would be required to pay after they had died.
The new charges are hopefully going to show that the Isle of Man is a great place to invest, particularly in property. This will have a positive impact on the amenities of the island and the money coming into the economy.
Donatio mortis causa, literally translated from the Latin as ‘gift on the occasion of death’ is often called a deathbed gift. It may sound morbid, but these gifts made ‘in contemplation of death’ are actually very popular, and make sound sense. It is the one exception to items that should be included in the Wills Act 1837.
There are three rules that need to be adhered to if you want to arrange a donatio mortis causa. Firstly, the person giving the gift must be aware that they will die in the immediate to near future. It is not enough to say that you want to give the gift because you will die ‘one day’. There must be a life limiting illness, or an accident that will reduce the lifespan of the gifter.
Secondly, the gift can only take effect once the donor actually dies. It cannot be given before death, and it can be revoked should the donor decide that they no longer wish to give the item, property, money, or whatever it may be.
Finally, there has to be an actual, physical handover of the gift. Keys need to be physically handed over if the gift is a house or a car, for example.
Many of the disputes that occur after death are due to donation mortis causa. Some people use this method instead of preparing a will, but that is not what it should be used for. A will is still required, especially as there is usually no evidence that a donatio mortis causa has actually been arranged – there are usually just two witnesses, and one of those will necessarily be dead if the DMC is to be invoked.
We recommend speaking to an expert if you want to arrange a donation mortis causa – it could be that a different method of gifting is better for you and your beneficiary.
Mention the word ‘will’ or the term ‘will writing’ and you might imagine that the majority of people would know exactly what you mean. However, you would be wrong. A survey recently carried out by Macmillan Cancer Support suggests that a huge 98 percent of people can’t actually describe what a will is really used for.
The same survey also said that although almost 70 percent of people like to plan ahead, and just under half are happy to talk about what they want to happen before, during, and after their death, still just 40 percent of the adult population of the UK have written their wills. And maybe the two things are connected – perhaps it is the misunderstanding about what a will is for that is causing people to not write one, when in reality everyone should do exactly that.
The misunderstandings that come with the idea of will writing include thinking that you have to be over a certain age (40 is the one that most cite) before you can write one. This is borne out with evidence that shows that 80 percent of 18-34 year olds don’t have a will compared to just 32 percent of those over 55. Another confusion is the cost of will writing. It is often assumed that will writing is a very expensive process, when in reality the cost of usually a lot less than people think.
But the problem comes when people think wills are solely about money. And those who have very little in savings or no assets therefore don’t think that a will is relevant to them, or their families. This is now the case, however. Wills are about more than who gets what. They can also set out what the deceased would like to have happen after their death, and this is especially important if children are involved.
If you are unsure about what a will is really for, and whether having one would benefit you or your loved ones, speak to an expert such as IWC for more information.
Contrary to what many people believe, Jersey is not actually part of the United Kingdom. This means that, when someone dies leaving behind any kind of asset in Jersey, two different sets of probate may need to be granted – one for the UK and one for Jersey. This can take a long time as not only does the executor need to attend the Jersey court in person, but they will have to wait until an appointment becomes available.
If this is not possible, or if probate needs to be sped up, then IWC can help. We offer a fast track service for Jersey probate in partnership with our trusted agents. All that is needed is for the Grant of Representation (the document that allows someone to execute an estate) to have been issued. Once this is done, an application to obtain a Greffier’s Certificate can be made. A Greffier’s Certificate is a form of grant of probate that allows a third party to attend court in the place of the executor – this is part of IWC’s Jersey fast track service.
Other documents required to obtain probate in Jersey are a sealed and certified copy of the will in question, an original death certificate, evidence of assets based in Jersey (such as a letter from the deceased’s bank or a mortgage statement), proof that all fees due have been paid to both the UK probate service and the Royal Court of Jersey, and the executor’s oath. These documents, together with the sealed and certified Grant of Representation, must be presented to the Jersey courts.
From beginning to end, the fast track Jersey probate service will take around 7 working days. Using the standard route will take considerably longer.
If you have any questions about probate in Jersey, what you need to do, or whether IWC can help with the fast track process, please do not hesitate to get in touch.
Resealing probate is a strange term, and not one that many people are too familiar with. After all, why should they be when probate itself is such a rare thing for them to need to be involved with? But it is an important thing to understand if you are dealing with the estate of someone who died in a Commonwealth country, including Australia.
Probate will need to be resealed if someone has died in a Commonwealth country yet still has some assets (perhaps property, which is common) in the UK, or if they died in the UK but have assets overseas. Resealing probate is the process by which property and possessions are released into probate in a different jurisdiction. It means, to put it simply, that probate happens once (and a Grant of Probate is released), and then it needs to happen again in the second country to ensure that each branch of the deceased person’s life is covered. In this way nothing is left out of probate that could have a serious impact on the contents of the entire estate, and what the beneficiaries receive.
Australian probate resealing can take some time, as it is all dependent on the Australian court system and what is happening there. Trying to work out the ins and outs of obtaining resealed probate can be problematic and time consuming, which is why it is a service the IWC offers. We simply need to know the value of the Australian estate, and we need an original copy of the England Grant of Probate (or Letter of Administration) for the initial probate work. As well as this, we need a copy of the original death certificate, the ID for the estate’s executor. We will then be able to offer you a fixed fee quotation.
Just call us and we can start the process of resealing probate in Australia. Leave it to us.
The Medallion Guarantee, the Medallion Stamp, Gold Medallion, Medallion Signature… With so many names for one document, it’s little wonder that people can become confused about what it is, why they need it, and how to get it. At IWC we can answer all of these questions and more.
The Medallion Guarantee (one name amongst many) is required before beneficiaries can sell or transfer any shares or funds that come from Canada or America.
In order to increase security after 9/11, the Medallion Guarantee – a bar coded document – was introduced. Its main purpose is to prevent cross-border fraud, as it allows the issuing financial institution to confirm that the shares are genuine and, if a forgery is committed, they are the ones who will accept liability.
So why would someone want to transfer these funds? There are a number of reasons, but one – one that happens more and more frequently – is that, although when the shares were bought the company they relate to was an English or British company, that company was subsequently bought out by an American or Canadian company. That means that the shares are now held in a foreign company. If you want to sell these shares after someone has died, or transfer them into another name, the Medallion Guarantee is crucial; without it, the transfer or sale cannot happen.
The Medallion Guarantee is not the only document that will be required when transferring US shares after someone has died. There are many others documents, as well as numerous forms to complete – it is, we know, an arduous task. Just some of the documentation required includes the transfer of stock ownership form, a copy of the relevant death certificate, a copy of the grant of probate, the original stock certificates (this can often cause problems), an inheritance tax waiver, an affidavit to prove that the deceased was not an American citizen (or resident), and of course the Medallion Guarantee.
However, IWC can work with you, and with the American or Canadian authorities, to make this part of probate much easier and quicker. Call us on Freephone 0800 612 6105 to discuss how we can help you.
Are there really plans to bring in a ‘stealth tax’ that means probate fees could rise by up to 9,200%? It seems so. And this could bring additional hardship down on those who are already grieving and having to deal with the estate of their deceased loved one.
At the moment, probate fees are £215. This is a flat fee that is due on any estate worth more than £5,000. However, the new rates that are potentially being introduced could mean that the lowest probate tax that will be paid is £300, and this is on estates worth between £50,000 and £300,000. The rate is to be set at £20,000 for estates in the region of £2 million or more.
And although it may seem as though it is only the ‘rich’ who will have to pay such high costs, with rising property prices more and more people are being pushed into the higher bands. It is suggested that the government could raise over £250 million every year from these new tax rates, and the Department of Justice’s justification behind it is an increase in the administration behind probate since estates are often larger – and growing – and take more time to process. But is that £250 million going to go towards paying staff?
Despite the increase, it is estimated that 30,000 beneficiaries will not have to pay anything as they estates they inherit will be between £5,000 and £50,000. Under the current system they would have been liable for £215.
The new plans mean that there will be a 40% rise for estates between £50,000 and £300,000 (currently £215 this will rise to £300). For estates between £300,000 and £500,000 it is a 365% rise (£215 to £1,000). Estates between £500,000 and £1 million will see a 1,760% rise (£215 to £4,000). Estates between £1 million and £1.6 million will pay a 3,621% rise (£215 to £8,000). Between £1.6 million and £2 million it is a 5,481% rise (£215 to £12,000). And for anything over £2 million it is a 9,202% rise (£215 to £20,000).
It is a rare event for someone to be an executor more than once or twice in their lives, and because of this no lay person ever becomes an expert in executing a will. Why should they when it is such a one off event? This does mean, however, that probate can take longer than it might otherwise have done because the person executing the will has no idea where to start. It could also mean that mistakes are made.
One of the most common mistakes is for the executor to underestimate just how much time this role will take. It is never a quick job, and with more complicated estates it can be almost like a full time job. Pre-planning can help ease the burden slightly, but it should never be assumed that being an executor is something that can just be worked on around other commitments, or, if that is the way it will need to be done then the executor will need to keep everyone informed of their progress.
Another mistake that is often made is that the executor does not keep clear records of the work they have done as they do it. This can be a problem when someone asks about how the job is progressing. Keeping a diary is the best way to keep on top of things, and know when to contact whom about what. It is a good idea to open a new, separate bank account where all the money from the deceased’s estate can be paid out of when required.
Executors sometimes also pay beneficiaries too early. If this is done – perhaps due to pressure on the executor from the beneficiaries – then it can cause problems later on when other bills need to be paid and the money has already gone. Executors also need to ask for proof of ownership of property etc, rather than simply taking things on trust. Never let a family member remove something from the estate until you have proof that they are allowed to do so.
It is always best to seek expert advice if anything confusing or out of the ordinary is found in a will that is being executed.
Many of us are probably aware – even it only vaguely – about the case of Jarndyce and Jarndyce from Charles Dickens’ Bleak House. It is an inheritance and probate dispute that has gone on for decades, and runs throughout the narrative of the book.
But although that is fiction, there is a real life case that bears a striking similarity to that of the one from Dickens’ head. And it has only just been resolved after two hundred years.
It is the case of Voivode Haci Huseyin Aga. Two hundred years, 800 descendants, and a court battle that would have worn out most people by now, and it is finally concluded.
The inheritance revolves around a 33.6 acre pieces of land near Bodrum in Turkey. The current value of the land is thought to be around £23 million, and the two men who owned it – brothers and descendants of Haci Huseyin Aga – decided to sell. Only they couldn’t. Because 798 (or so) other descendants came forward to claim the land for themselves – or, if they couldn’t do that, they wanted a share of the proceeds from the brothers’ sale.
After a six year court battle, everyone lost.
In the end, the true owners of the land couldn’t be determined, which meant that the courts could sell the land, but because it would need to be done quickly, it is likely that the land would sell for much less than it is really worth.
Whether or not a home is insured isn’t often a question that is asked during probate – certainly not by those who are dealing with the deceased’s estate. However, ensuring that the property is actually insured is a rather important thing to do. The home insurance that should have been taken out and paid for by the deceased will no longer be valid – their bank accounts will be wound down, for a start, and so those who are responsible for the estate will need to make sure that it is organised.
Property is potentially an awkward issue after a death, and it is usually in the family’s best interest to sell it as quickly as possible to recover money. But until it is sold, the upkeep should be remembered – and that is the job of the beneficiary.
There is a product, however, that should help, at least in regards to insurance. It is called unoccupied property insurance. In order to do this, it is often required to have the approximate property value.
Reasons behind keeping an unoccupied house insured include damage caused by thieves or those trying to break in in order to stay in the house because they know it is empty. And what about burst pipes or general wear and tear? The heating will, in an empty house, be turned off. This will save money. But it can also lead to pipes freezing and bursting and therefore insurance with additional emergency works cover is often useful. It will be better to have the insurance dealing with these problems rather than the beneficiary who may not be able to afford large repairs and will have to sell the house at less than it is worth.
A vacant house should be inspected regularly to ensure that everything is as it should be.