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Services for Individuals
When someone close to you dies somebody has to deal with their "estate". Our solicitors can help you at this time. A person's estate is considered to be made up of the money, property and any possessions they had at the time of their death. The process of Probate involves collecting in any money that is owed to the deceased, settling any debts payable from the estate (including any outstanding taxes and any Inheritance tax due on death) and dividing the estate amongst the respective beneficiaries. Please see below for the pitfalls and dangers of undertaking this yourself rather than by someone legally qualified.
All assets (including property) in an estate (expect jointly owned assets) will remain frozen, until the Probate Registry gives the authority (via a document know as a Grant of Representation) to the Personal Representative(s). These are the individual(s) nominated in your Will to act as the "Executor(s)". If you have no Will, then it is up to the most appropriate member of the family member to act on behalf of the estate - usually the main beneficiary under the Rules of Intestacy that govern entitlement when someone dies without a will.
If there is a Will then the estate will pass to the beneficiaries named in the Will. If there is no Will then the Rules of Intestacy will apply to establish who is entitled to the deceased's estate and in what amounts.
Whether you are an Executor or the next of kin, our lawyers can provide practical guidance to help you deal with the administration of someone's estate. We can help you determine the size of an estate for Probate and Inheritance Tax purposes. We can prepare an application for the Grant of Representation on your behalf and help you lodge the required forms with the relevant organisations to collect monies due to the estate and settle any outstanding debts.
We can arrange the transfer or sale of any assets held and work with our residential property team to handle the sale of any property or land owned by the deceased.
We can also advise you on ways to vary the terms of a deceased's will or intestacy (within two years of their death) to take advantage of tax planning schemes and long term care planning for the surviving spouse or partner.
Liz Taylor is a member of the Society of Trusts and Estates (STEP) and a member of the Solicitors for the Elderly group with particular expertise in these areas of the Law.
We live in an age where the Internet can make us experts in a particular field in a matter of clicks. This is no different where the administration of an estate is concerned. There is undoubtedly a wealth of information available on the Internet to help guide Executors and Administrators through the process of dealing with an estate. Unfortunately, a lot of the information available is incorrect and even where it is correct, it is very easy to follow a process or complete a form inaccurately.
You should therefore think very carefully before taking on the role of an Executor or Administrator of a deceased person’s estate without the assistance of a solicitor, as you will be personally liable for any mistakes that you make both during and after the process. Even innocent oversights and ignorance of the law will not provide you with a defence. If you have made a mistake you will be the person that a claim is brought against and you will be liable to pay any monies that are awarded, even where there are no monies left in the estate.
Here are a few things that you might wish to consider before taking on the role of Executor or Administrator without legal assistance:
Where there is no Will, the rules of intestacy dictate how an estate is to be distributed. These rules are complex and do not always distribute an estate in the way that you think they might. For example, you may be surprised to learn that the concept of a common law wife or husband is a myth and that even if you have been with your partner for years, you will not be entitled to anything from their estate if you were not married to them at the date of their death. Even where there is a Will, the legal terminology can be very difficult to understand and often an estate is distributed incorrectly or trusts missed entirely. This can be very costly. If an estate is distributed incorrectly, you may be personally liable to pay a beneficiary from your own funds in order to rectify your mistake. If you instruct a solicitor to act on your behalf you can relax in the knowledge that their legal training will ensure that an estate is distributed appropriately and that any trusts are set up in the correct manner.
One of your main roles as an Executor or Administrator is to ascertain the size of the deceased’s estate and declare this to H M Revenue & Customs. An asset which is overlooked and not declared on Inheritance Tax forms could get you into trouble if Inheritance Tax is due but not paid. It can also mean that the beneficiaries never get their full entitlement from an estate. The concept of joint property is also often completely misunderstood by Executors and Administrators, who are not aware that property can be owned jointly in two different ways, both of which have very different legal consequences when valuing and distributing a deceased’s estate. Similarly, any debts which you have not repaid in full before the estate is distributed may be recovered by creditors from you personally. Again, it is no defence to say that you were not aware of the debt. A solicitor can assist you in valuing the deceased’s estate correctly and help you to ensure that all figures declared to H M Revenue & Customs are correct. They can also advise you about the best way to protect yourself from having to repay debts of which you are not aware. The consequences of wrongly declaring the value can be frightening.
H M Revenue & Customs do not just want to know about Inheritance Tax when someone passes away. An Executor or Administrator also needs to consider Income Tax and Capital Gains Tax, which can be minefields in themselves. If tax returns are prepared by a solicitor it not only ensures that the correct amount of tax is paid but also guarantees that any available exemptions or reliefs are claimed.
Not only does an Executor or Administrator, therefore, have to be extremely careful that all matters such as tax are dealt with accurately before an estate is distributed, but they also have to be aware of potential claims that can be made against the deceased’s estate even after it has been paid to beneficiaries. In 2013, The Independent reported that the High Court had seen a 700% increase over the previous 5 years in the number of claims launched to challenge the provisions of Wills. Executors and Administrators will need to be particularly astute in this respect where the deceased had a complex family arrangement, such as a step-family or they cohabited. As mentioned previously, challenges can be made where an estate has not been distributed correctly, but they can also be made when an individual thinks that a Will was executed incorrectly, under pressure, or without full mental capacity, or they simply think that they should be entitled to something from the deceased’s estate. The Inheritance (Provision for Family and Dependents) Act 1975 prescribes a list of people who are entitled to bring a claim against an estate if they believe that unreasonable provision has been made for them in the deceased’s Will. If you have distributed the estate and a claim is then brought successfully, you may be personally liable to pay the beneficiary what they are owed. Once again, ignorance of the law and of the facts will not protect you.
Ignoring all the risks mentioned above and putting aside the benefits of legal training, experience and insurance, there is a simpler reason why you should consider instructing a solicitor to act for you in the administration of an estate – to take the burden off your hands. Dealing with an estate is extremely time consuming and can be very stressful, especially if you are juggling it with your own work and family life. There is often a mountain of paperwork to deal with and hours to be spent on the telephone. A solicitor, with a trained eye, can deal with matters quickly and efficiently and will take the stress of dealing with the estate away from you.
If you would like to speak with our Private Client Department about the administration of an estate please contact us on 01204 540900 or 0161 834 4722 or at firstname.lastname@example.org.
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