Probate legal advice and help

If someone in the family has died, we are here to help and this page offers some free advice to guide you in the actions you now need to take.

Firstly call your local funeral director to make the funeral arrangements, check the Yellow Pages for a firm close to your home. Don’t forget to check with them how much it is all going to cost before you agree.

Contact your local Registrar of Birth Deaths and Marriages to register the death. They are very helpful and knowledgeable, they will assist you on all aspects of this. When they ask you how many copies of the death certificate you need, ask for at least half a dozen because they will be needed later when you register the death with banks, building societies and the like. Only an original certified death certificate will be acceptable to them.

Check whether there is an original Will or if there is not an original Will any letters or indeed any other document that was left indicating what was supposed to happen to the assets. Obviously an original Will is best but if you can only find a copy that will do until you take further advice. You may find that no Will was left and so this will be an intestacy where the assets are divided according to law.

When you are looking for the Will don’t forget that it is most often lodged with the family solicitor who should be contacted straightaway.

You need to find out who the Executors are, if there is an original Will, and if there is no Will whoever is going to deal with all the formalities because that person will be “the Administrator” of the Intestacy and who will carry out all the actions and responsibilities of the Executor.

When you find the Will and if you see that you and perhaps someone else are the Executors you are in charge and you may wish to instruct solicitors to advise you on your responsibilities and carry out all the necessary work. If you would like us to act for you then we would pleased to do so. May we suggest that you call either Martin Cray or Robert Gould on 01273 673226. Emails are checked at weekends so during the weekend we suggest that you email mcray@martincray.co.uk.

If you find that it is a firm of solicitors who are the Executors you will need to contact them as a matter of urgency because they will be the Executors and their firm will carry out all the Executors work. If you do not want that firm of solicitors to act then you can ask them to “renounce” and then instruct any solicitor you like.

The next step is obviously to make an appointment to see us or whichever firm of solicitors you choose to instruct to discuss all the next steps.

It is possible for an Executor to carry out the work themselves but many Executors choose to instruct solicitors to carry out the duties and ensure their responsibilities are fully and completely complied with. The responsibility of the Executor is one of the highest in law and it is “utmost good faith” to carry out the wishes of the deceased as set out in the Will.

Firstly all the individuals, companies and organisations with whom the Deceased had assets or liabilities are contacted and notified of the death.

Those individuals and organisations then respond confirming the extent of the asset or liability as at the date of the death and return the official copy of the death certificate.

All the assets and liabilities are then scheduled in what is called, "the estate account".

From the estate account the inheritance tax is calculated and the appropriate payment to the Inland Revenue.

When the Inheritance Tax has been paid the Probate can be applied for, or if there is not a Will, the Letters of Administration.

The application for Probate or Letters of Administration is made to the local District Probate Registry of the High Court.

Once Probate or Letters of Administration have been granted the Executors the Administrators then own all the assets, in their capacity as Executors or Administrators for the purposes of putting the Deceased’s Will or the Intestacy Rules into effect.

The next step is to pay off any liabilities, perhaps just the funeral account and then distribute according to the Will or the Intestacy Rules.

If there was a property which was in joint names and one party survives then that party, if it is held as joint tenants, will take automatically but if it is tenants in common then it will be two separate halves and only one half will pass under the Will.

As soon as all the liabilities have been paid the distribution can be paid and that is the end of the estate administration.

If we can help in any way or if you have any queries please call either Martin Cray or Robert Gould on 01273 673226 or email mcray@martincray.co.uk.

Inheritance Tax latest – what has changed in the pre-budget special.

Up to this point the value of anyone’s estate above the nil rate band threshold, £300,000, has been taxed at 40% when that person died. Family money passed from a wife or husband or between civil partners are tax free however, unless other arrangements have been made this just delays the payment of the tax until the second spouse’s death.

What this means is that up to this point a husband and wife with a £600,000 home, when the husband dies the wife will have no Inheritance Tax to pay but if the wife dies a few months later her money will be taxed at 40% on the amount above £300,000 and that will result in an Inheritance Tax bill of £120,000.

What has changed, under these new rules, is that married couples or civil partners can transfer the element of their Inheritance Tax free allowance which they did not use to their spouse when they die. If, for example, the Estate’s value is less than the combined allowances of the spouses, currently £600,000 there would be no tax to pay.

A significant point to note is that the nil rate band threshold rises in 2010 to £350,000 and so a married couple would not have to pay tax on £700,000 by doubling up the allowance.

Nil Rate Band Discretionary Will Trusts.

Up to now you could attempt to pass on up to £600,000 to children tax free by using one of these Trusts. This would operate so that when the first person died they could leave the maximum amount allowed within the tax free bracket in a Trust for their children rather than giving it directly to their spouse. That way both partners preserve their £300,000 tax relief, therefore since the new rules which come into force immediately no-one has to bother with these Trusts.

No Time Limit.

There is no time limit on these provisions so all widowers and widows will benefit from these arrangements no matter how longer ago their spouse died.

Those not covered.

The arrangements do not include co-habiting couples, brothers and sisters who live together, divorcees and single people.

What to do if you have already set up a Trust?

You will probably need to rewrite your Wills so that when you die all your assets pass to your husband or wife. A Will can also be altered and the Trust negated in the two years after the first spouse dies. It is however a little more complicated after death as any changes need to be subject to the consent of the Trustees – you therefore need to move quite quickly on this aspect if it is relevant to you.

Do all Wills need to be rewritten?

We believe the answer is no because a Will Trust does give you control over what happens after your death. If you want to ensure that assets go to your children then you may want to leave the Will Trust in place.

Other considerations.

If gifts are made less than seven years before death to anyone other than your husband or wife they are treated as using part or all of your nil rate band.

If for example, children were given a gift by their father on his death bed of say £125,000 five years ago, then at that time the Inheritance Tax Allowance was £250,000 meaning that there was no immediate tax to pay but he used up half his allowance. If the mother was to die today the family could use her Inheritance Tax Allowance but only half of the fathers – this is rather than £600,000 only £450,000 would be exempt from Inheritance Tax. Because there is no time limit relevant deaths could be a very long time ago and it is important to note that the Revenue can check on the circumstances and whether the allowance was fully used or not.

Remarriage.

If you have remarried and your former spouses have died you each have a £600,000 Inheritance Tax Allowance a total of £1,200,000. When you get married the present advice is that you can each retain your double allowance but an individual can never claim more than his or her maximum.

What to do if your Estate is worth over £600,000.

1. Each year you can give away £3,000 free of Inheritance Tax or £6,000 if you did not make a gift of this kind in the previous tax year. A married couple giving for the first time would therefore hand over £12,000 to their children in one year.
2. If a gift is regular, comes out of your income and does not affect your standard of living, any amount of money can be given away Inheritance Tax free.
3. With potentially exempt transfers (PETS) it is possible to make further tax free gifts but you have to survivor the seven years after making the gift because if you die within seven years and the gifts are valued at more than the nil rate band threshold the tax reduces on a sliding scale.

Discounted Gift Trusts.

If you would like to give away assets but you need to draw an income but do not think you will need the capital then a discounted gift Trust may be relevant for you. You make a gift into a single premium insurance bond for your children, fixing how much income you will draw until your death. If you survivor the seven years the bond does not count as part of your estate.