The Tax, Trusts and Probate Team at ODT Solicitors boast a service which, in our opinion, is second to none.
We deliver for you a high quality personal service, providing intelligent and pragmatic advice, together with carefully thought out solutions to suit our clients’ specific needs.
We are enthusiastic about what we do and we strive to build long standing relationships with our clients. Many of our clients have been with us for their entire adult life, and we continue not only to advise them, but also their children and grandchildren.
We have expertise in all aspects of:
- tax planning, including business or farming assets
- administration of deceased’s estates
- powers of attorney and the Office of the Public Guardian
- trusts and trustees
- providing advice specifically for older and vulnerable clients
- preserving assets in the event of long term residential or nursing care
- mental health legislation and elder abuse
- advising and acting in relation to trust, will and probate disputes including Inheritance Act claims
Our members of the team have a vast range of expertise and experience between them
If you live or work anywhere in the South East of England, we can arrange to meet you at one of our offices in Brighton, Hurstpierpoint or Haywards Heath. If you are unable to visit our offices then, please ask us about a home visit.
Writing A Will
It is estimated that perhaps only 30% of adults make a Will. 70% therefore are leaving to chance what will happen after they die; if you die without a Will, the law will set out who gets what and how your estate is administered. This may not produce the results you expect or wish for.
If you die without a Will –
- your surviving spouse potentially may not have enough money available to live on
- Your family home may need to be sold
- An unmarried partner will not automatically receive anything
- Your children may not adequately be provided for
- Friends or charities will receive nothing
- If you run or own a business, there will be problems for the ongoing management of it
- You will have no control over either who administers your affairs after you have died, or indeed over who would raise your children
The solution is simple – have a Will professionally drawn up, so that you decide what happens to your assets after you have died.
This is where the specialist team at ODT Solicitors can help.
Does it matter? We are Married
Perhaps the most important point to appreciate is that if you are married (or in a registered Civil Partnership), but die without a Will, then your surviving spouse does not automatically receive everything. If you have children, your surviving spouse receives the first £250,000 automatically and an income from half the remainder. This may well be insufficient for the survivor to live on, forcing a sale of the house at a time when stability and security are of paramount importance. Crucially also, there may be insufficient monies available for your spouse to raise your children.
There is no concept of a “common law spouse” in estate law. An unmarried partner has no entitlement to anything from your estate, and would have to apply through the Courts in order to get anything, with no guarantee of success. An unmarried father would not even automatically have guardianship of any children.
I’ll Do My Own Will
A Will is an important legal document, and if there are any errors in it, these are generally not spotted until after you have died, by which time it is too late!
To qualify as a Solicitor, a person has to have got a degree, followed by one or two years at Law School and then a further two year “apprenticeship”. That means a minimum six year training period before you are qualified and can call yourself a Solicitor. A chartered legal executive will need a minimum of 4 years training to qualify. Nobody undertakes this level of training lightly and without being committed to their chosen field. These are professionally trained lawyers who are trained to deal with all sorts of legal issues.
When you consider your own situation for writing a Will, there may be a temptation to do it “on the cheap” by purchasing a DIY kit or something similar. Why take that risk? Your will can set out who receives what from your estate after you have died, and sort out arrangements for care and maintenance of children or other dependents. Why would you risk something as important as that? If you try to “do it yourself” and you get a couple of words wrong, you can undo all that you want to achieve. Mistakes like these can be very costly to sort out after you have gone, leaving your family to pick up the pieces.
Don’t leave it to chance, use a professionally trained lawyer to draft your Will
Once Done, I can forget About It
By it’s very nature, a Will is written based on your current personal circumstances, and, so far as is possible, taking into account future changes. However, a Will cannot cover all eventualities that may befall you. It is therefore essential to keep your Will under review;
It may be that you decide you don’t need to change anything, but the decision must be a positive one.
Other circumstances to review your Will are on marriage (getting married ordinarily revokes a Will) or divorce, on the birth or death of someone in your family or on receiving a substantial sum of money. You should always consider whether your Will meets your personal circumstances at least every two or three years.
Would you have someone untrained perform an operation on you? Then why would you allow someone untrained to prepare an important legal document for you?
Powers Of Attorney and Court of Protection
Being in control of our lives is something that we all take for granted. We naturally assume that we will be able to sort out our own personal affairs and generally make decisions about our lives. However, life often teaches us that this assumption isn’t always right. What would happen if you found yourself unable to deal with your personal affairs? Unless your family are authorised to, they could not gain any access to any of your monies, even if they needed to – due to data protection laws, banks, utility companies and other financial institutions will not talk to anybody other than the account holder unless they have the correct legal authority from the accountholder.
The solution to this problem, and to give you peace of mind, is the preparation of a Lasting Power of Attorney (LPA).
Many people are aware of the need to write a Will, but few consider an LPA. However, there is a crucial difference between not having an LPA and not having a Will. You will never have to live with the consequences of having no Will, but you will have to live with the consequences of having no LPA.
What Does That Mean?
Not having a Will has no consequence for you whilst you are alive, when you die there are rules which dictate the distribution of your assets in the absence of a valid will.
However, if you do not have an LPA and you lose either the mental or physical ability to manage your own affairs, then you will have to live with the consequences of that.
An LPA is a document that enables you to appoint one or more persons of your choice to deal with your financial affairs should you be unable to do so yourself; and this may be required even if your disability is temporary. The LPA gives you and your family peace of mind by knowing that if you were unable to manage your financial affairs then you have done all you can by choosing someone to take control to make decisions on your behalf.
Without an LPA, your family have no option but to apply to the Court of Protection for a Deputyship Order which is a cumbersome, costly and time-consuming process. You will have lost your ability to choose who is appointed and your Deputy will not necessary know how you want to your finances to be organised.
It is also possible to draw up a Personal Welfare LPA, which enables you to appoint someone to take decisions about your personal care, in the event that you cannot make those decisions yourself – this can cover a whole range of personal welfare decisions, such as consent to surgical procedures, where you live and even the withdrawal of life sustaining treatment.
“It Can Wait”
Unfortunately, whilst it can wait, it really should not! It is a general misunderstanding that an LPA can be set up at a later date when it is needed and all too frequently it is the family that look to have an LPA set up when the person has already lost the capacity to do so themselves. By then it is too late.
The process of dealing with the affairs of someone who has recently died is known generally as “probate”. The process is in fact potentially a quite confusing one at a time when emotions, and as such rational thought processes, may not be as acute as normal. At a time when you need some help, our sympathetic and efficient team can step in to deal with as much or as little of the process as needed.
One area that people often need assistance with is Inheritance Tax.
Inheritance Tax (IHT) is a tax chargeable when a person dies, and also, in certain circumstances, on lifetime gifts and trusts. If a person is domiciled in the UK, IHT will apply to all their worldwide monies and assets; if they are domiciled outside the UK, then generally it will apply to only UK based assets. This outline below assumes a UK domiciled individual.
IHT on death
The general rule is that when a person dies you add up the value of all their assets and deduct the value of any liabilities. This gives a value which is referred to as the net estate value. From this is deducted the available Nil Rate Band for Inheritance Tax purpose. This NRB is a tax free allowance but may be different in every case (see below). Having deducted the NRB allowance, anything above that threshold is then taxed to Inheritance Tax at 40%.
Nil Rate Band Allowance
This is, in effect, a tax free allowance. For the 2018-2019 tax year this allowance is £325,000. However, this allowance can change. If an individual has made gifts in the seven years prior to their death that do not fall within one of a number of exemptions, then the value of those gifts will reduce the value of the available Nil Rate Band allowance at the date of death. For example, a person who gives £50,000 cash to each of his three children five years before his death will find that the NRB allowance that can be claimed is reduced by £150,000. In 2008 the Government brought in a change to IHT rules so where a person dies in a situation where the spouse died before them, leaving their estate to that second spouse to die, it is possible to claim up a 100% increase in the NRB allowance, effectively enabling a person to claim up to a double allowance.
Residential Nil Rate Band
Since 2017 there has been an additional allowance available where a property is being left to close relatives, i.e. children or grandchildren. Aimed at reducing the impact on the huge growth in property prices over the past decade, this allowance can be passed to a spouse and transferred upon a second death. It is currently worth £175,000, an allowance which is very useful.
Costs for dealing with Probate
We anticipate this will take between 8 and 40 hours work at £280.00 per hour. Total costs are estimated at £2,250-£11,200 (+VAT).
The exact cost will depend on the individual circumstances of the matter. For example, if there is one beneficiary and no property, costs will be at the lower end of the range. If there are multiple beneficiaries, a property and multiple bank accounts, then costs will be at the higher end.
We will handle the full process for you. This quote is for estates where:
- There is a valid will
- There is no more than one property
- There are no more than 3 bank or building society accounts
- There are no other intangible assets
- There are 3-5 beneficiaries
- There are no disputes between beneficiaries on division of assets. If disputes arise this is likely to lead to an increase in costs
- There is no inheritance tax payable and the executors do not need to submit a full account to HMRC
- There are no claims made against the estate
In the event that inheritance tax is payable, or a full return is required, this can add up to an additional 5 hours’ time for all work involving HMRC, increasing costs up to £12,600 (+VAT).
Disbursements to be added include some, or all of, the following:
- Probate application fee of £155, plus 50p per copy
- £7 Swearing of the oath (per executor)
- Bankruptcy-only Land Charges Department searches (£2 per beneficiary)
- Approx £200-250 to advertise in The London Gazette and local Newspaper – This protects against unexpected claims from unknown creditors.
Disbursements are costs related to your matter that are payable to third parties, such as court fees. We handle the payment of the disbursements on your behalf to ensure a smoother process.
- If there is no will or the estate consists of any share holdings (stocks and bonds) there are likely to be additional costs that could range significantly depending on the estate and how it is to be dealt with. We can give you a more accurate quote once we have more information.
- If any additional copies of the grant are required, they will cost £1 (1 per asset usually).
- Dealing with the sale or transfer of any property in the estate is not included.
On average, estates that fall within this range are dealt with within 9-12 months. Typically, obtaining the grant of probate takes up to 6 months. Collecting assets then follows, which can take between 3-6 weeks. Once this has been done, we can distribute the assets, which normally takes 4-8 weeks.
Contentious Trust and Probate
It can difficult making a Will that satisfies all potential beneficiaries, and sadly families, friends and relatives do sometimes fall out over an estate, especially where a testator changes his / her Will late in life and/or does not treat all children equally. With increasing numbers of second families this issue is becoming more and more frequent.
The beneficiaries, relatives and dependents who are not included in the Will may need practical advice on how to address and deal with such matters – whether it is to challenge a Will, or deal with disappointed beneficiaries.
Where property or land is held by two or more people, trusts may arise where it is not always clear as to each party’s entitlement in the property, or the rights they have over it.
For any of the issues raised above, or other matters not specifically addressed here, please contact Harvey Osler to discuss.
Older and Vulnerable Client Care Policy
Our Older & Vulnerable Client Care Policy is here