Wills & Probate
Talking about Wills can be very daunting and not an easy conversation. A Will is one of the most important documents that you will create in your lifetime. Essentially it is a legal document that allows you to state what you wish to happen to your assets (your money, property, investments and possessions) as well as your young children after you have passed away. Ultimately, a Will gives you peace of mind that your wishes will be carried out and that your loved ones are cared for, but many of us put it off, which can cause problems later.
What happens if I die without a Will?
Without a will when you die, your estate will be divided in accordance with the rules of intestacy.
The rules of intestacy allow the government to decide who gets what. If you have no living family members, all your property and possessions will go to the Crown. If you have children under 18 years old, other people can make decisions about who will take care of your children and manage their finances, living arrangements and their education.
How do I make a Will?
When making a will, it is important that you have a qualified Lawyer or Solicitor who specialises in Wills and Estate Planning by your side to make the process as easy and smooth as possible.
When considering your Will it is important to be aware that your it can deal with a whole number of matters relating to your estate as follows:
- Appoint executors – this is somebody you nominate to carry out the wishes in your will
- Funeral wishes
- Appointment of guardians for your children if they are under the age of 18
- Protection for your pets
- Protecting your property
- Protecting a vulnerable beneficiary
- Creation of trusts – asset protection
- Distribution of personal effects such as jewellery, photographs, a car, your record collection etc.
- Gifts to charities
- Specific gifts of money to family or friends
- What happens to your digital assets – Facebook, YouTube, Bitcoin, iTunes library etc.
- Provision for spouse or civil partner
In simple terms Probate is a document which gives the legal authority to manage the estate of a person who has passed away.
The Grant of Probate is applied for by the executors named in the deceased’s Will or the person with the authority under the rules of intestacy when someone dies without a will.
An executor is responsible for all legal and financial responsibilities within the estate as follows:
- Securing any property owned by the person who has died (deceased) and ensuring there is adequate insurance in place
- Completing a schedule of all assets held in the name of the deceased
- Obtaining accurate valuations of all assets as at the date of death
- Completing Inheritance Tax accounts
- Completing Probate papers
- Arranging payments of inheritance tax
- Collecting in all assets and money due to the estate
- Selling or transferring property
- Paying any outstanding taxes and liabilities
- Obtaining clearance from HM Revenue and customs
- Completing full estate administration accounts
- Distributing the estate to the beneficiaries named in the will (or the beneficiaries under the rules of intestacy if there is no Will)
When is Probate required?
A Grant of Probate is required on assets in the sole name of the deceased.
All banks, building societies and other financial institutions have different thresholds for when Probate is required. For example, if your father or mother’s bank account has £15,000 remaining when they died and the bank’s threshold for Probate is £30,000, it is likely that you will be able to access these funds without requiring a grant of probate.
Probate is nearly always required on assets over £30,000 and of course on any property owned in the sole name of the deceased.
The Probate Process
Probate and Estate Administration can involve complex legal work which can be broken down into separate stages:
- Stage One: Arranging the valuation of all the deceased’s assets to include property, personal effects, bank accounts, investments and shares and obtaining up to date valuations of all liabilities such as loans, mortgages, and any other liabilities. This is to ascertain the value of the Estate.
- Stage Two: Confirming the validity and terms of the deceased’s Will, or the authority and beneficiaries under the Rules of Intestacy (if they died without a Will) and obtaining identification for all Executors/Administrators and Beneficiaries.
- Stage Three: Completing the correct inheritance tax account. This is required regardless of whether there is any tax payable and there are a number of different forms to complete, depending on the value of the Estate and the tax exemptions which are available to be claimed.
- Stage Four: Paying Inheritance Tax to HM Revenue & Customs which is required prior to the Court issuing the Grant of Probate.
- Stage Five: Completing the Probate papers and making the application to the Court for the Grant of Probate.
- Stage Six: After the Grant of Probate has been issued, all assets in the Estate can be realised, property sold or transferred, and liabilities settled.
- Stage Seven: HMRC can be accounted to for any final balance of Inheritance Tax due to or from the Estate.
- Stage Eight: An application can be made to HM Revenue & Customs for clearance.
- Stage Nine: Estate administration accounts will be prepared showing all monies in and out of the Estate and confirming the balance due to the Beneficiaries. These will be sent to the Executor/Administrator for approval.
- Stage Ten: Subject to there being no challenges to the Estate or any investigation by HM Revenue & Customs which could prevent distribution of the Estate at this stage, the Executors/Administrators will be reimbursed for any expenses and the balance of the Estate distributed among the Beneficiaries.