Changing A Will After Death

When someone dies, theprobate solicitor hertfordshire bedfordshire buckinghamshire executors who are appointed will look to their Will to find out their wishes and see who is to benefit from the estate. However, sometimes the beneficiaries who are due to inherit from the estate may not want to. This could be for many reasons, e.g. because the inheritance will push their own estate over the inheritance tax threshold, or they simply feel comfortable with what they have. In those circumstances, the beneficiaries may wish for someone else to benefit in their place, such as grandchildren or their siblings.

Other reasons for changing a Will may be to equalise the gifts. So, for example, if one child was left a smaller percentage than another, it can be agreed that the percentages are evened out using a Deed of Variation. It can also be used if one child is not as wealthy as the other and would benefit more from having a larger share.

Deed of Variation

If all of the executors and the beneficiaries who are affected agree to the changes, the terms of the Will can be changed after death using something called a Deed of Variation. This must be signed by the executors and affected beneficiaries within two years of the death to be valid. If the agreement of all parties can’t be obtained, the Deed cannot be signed and the terms of the original Will stands.

If any of the beneficiaries are under 18, then this would need to be approved by the Court.

Do I Need to Register The Deed of Variation?

There is no need to register the Deed of Variation. It is simply a contract outlining the agreement between the executors and beneficiaries, so it only needs to be signed to ensure that it is legally binding. It is important that none of the parties are compensated for what they have given up and that none of the original assets were affected by a Gift with Reservation (where the asset was given away during the deceased’s lifetime, but they continued to benefit from it). However, the parties must keep a copy of the signed Deed in case the Revenue has questions regarding it in the future.

If you are considering a Deed of Variation for an estate you are involved in, I would strongly suggest that you seek independent legal advice, as the effects can be wide-ranging. A simple Deed of Variation starts from £400 plus VAT and can be drawn up within a couple of weeks. If you want more information on this topic, contact me today.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

Why You Might Be Putting Off Your Will

probate solicitor leighton buzzard bedfordshire hertfordshire buckinghamshireUnsurprisingly, writing your Will is not the most popular activity on the planet. In the UK alone, recent research suggests that as many as three in five adults don’t have a Will – with a whopping 68% of 35-55 year olds falling into that category (the figure falls to 36% for the over 55s). Many people put it off – so if you haven’t done yours yet, you’re not alone. But it is important. Here is a list of the most popular reasons for procrastinating about writing a Will – and also why you should get on and do it!

  1. I don’t have anything to leave
    For the vast majority of people this simply isn’t true – most of us have possessions! You might have a car; you might have savings; or life insurance or a pension through your work. If you own your own home there will probably be equity in it through rising house prices even if it is mortgaged. At the very least, a Will gives you the opportunity to decide where your stuff goes, who inherits your assets and you can specify your wishes for any funeral arrangements when you die.Most importantly, if you have children then you need to decide who you want to be their guardian when you’re no longer around to look after them (see point 6 below).
  2. It’s too expensive
    Many people have a vague idea that preparing a Will is going to be expensive. It’s not something that gets budgeted for in a normal month. Solicitors are often seen to be pricey. Maybe you’ll do it next year when you’ve had a pay rise…But it doesn’t have to be expensive. As a consultant solicitor I am able to keep my drafting prices very reasonable compared to those on the high street as I have lower overheads. I also offer a free 30 minute consultation to review your existing Will or discuss what you need to consider for drafting a new one.Even if you don’t instruct me to prepare your Will, I would still urge you to bite the bullet and get it done. If you have a simple estate you can always go down the route of a Will-drafting kit (which start at as little as £10-£20), and provided you follow the instructions carefully, can be done simply and effectively.
  3. It’s tempting fate… or It’s too depressing
    Ok, so it can be depressing thinking about dying. But it’s better to have a plan in place. For the sake of your family get it done. Losing a close family member is devastating enough, without the added stress of no Will, no funeral plans, no life insurance to pay the mortgage… it will be much easier for your family if all this in place and things can proceed smoothly. As for tempting fate, when your time is up, it’s up. Having a Will or not is not going to change that.The act of preparing the Will needn’t be depressing in itself. A lot of my clients will tell you that we often end up giggling in our appointments. I try to keep it light hearted – I know it’s a difficult topic.
  4. It just isn’t a priority now
    Unlike a mortgage or a wedding, there isn’t really a life event that really gives us an immediate push to prepare our Will. Some people think about it when they have children, but it often gets overlooked in the haze of the newborn days when you have a lot on your mind or plate! Unless something serious happens, like ill health  or an operation, we tend to think that we can put off Will-making to another day.One day, it will be too late, so best to get it done now!
  5. My husband/wife will get everything anyway
    Yes… if you are married with no children. However, if you do have children, your spouse will only automatically inherit the first £250,000 of your estate (plus interest), and your personal belongings. Anything over that sum is divided into two equal shares – one half to your spouse and the other to be held in trust for your children until they reach the age of 18 (or 16 and married, randomly!).If you aren’t married then your partner has no automatic right to any of your assets and they will pass under intestacy rules to your children, parents and siblings if you do not have a Will. There is no such thing as a ‘common law’ spouse in our legal system.So don’t assume your partner will get everything. If you book in for a free 30 minute consultation I can tell you what would happen to your estate if you died and help you work out if you need a Will or not.
  6. I can’t decide who to appoint as guardians
    I do hear this one a lot and I agree that it can be a really difficult decision to make. In fact, I would go so far as to say that it is probably the number one reason that parents of young children put off making a Will – they simply can’t decide who would look after their children if they died.The advice I always give in this scenario is to make a decision based on who you would have looking after your children today. You can always update your Will if circumstances change… but it is better to have someone appointed and it not be quite right, than nobody appointed and having the State decide who should look after your children. In a worst-case scenario, the children could be placed into temporary care until a proper assessment and decision can be made. In my mind, appointing guardians is the single most important reason for parents to write a Will. Losing your parents is hard enough without worrying about where you will be living and with whom.
  7. It’s complicated
    It’s actually much less complicated than you might think. In fact, many of my clients exclaim ‘Is that it?’ at the end of our signing appointment as they expected it to have been much more complex. In practice, you can rest easier knowing that it is done. I try to make matters as straightforward as possible – offering home visits and evening or weekend appointments so your Will can be drafted, safely stored and ticked off the to-do list in a simple, painless way.

If any of these resonate with you, then it is time to stop making excuses and get your Will prepared! Come and have a chat to iron out any concerns or uncertainties you might have, and enjoy the peace of mind in knowing that the future of your children and assets are taken care of.  

Probate Delays: A Guide for Executors

probate solicitor bedfordshire hertfordshire buckinghamshire leighton buzzardBefore a deceased person’s estate can be administered by the executor(s) named in the Will (or the administrators if the person died intestate), a document known as a Grant of Probate or Grant of Representation  needs to be issued by the court to confirm that they are entitled to do so. A commonly held view is that obtaining Probate is a lengthy process, but once the application is ready to submit, it usually only takes around 7-10 days for the Grant to be issued.

Whilst processing the Probate application is pretty quick, the process of administering an estate can be lengthy and there are several hoops that need to be jumped through along the way.

Before you can apply

  • All of the assets owned by the deceased must be valued, including bank accounts, investments, pensions, property, personal effects, cars and anything else they might own. Any debts such as mortgage or credit cards must also be valued so that this can be taken off the final figure.
  • Inheritance tax needs dealing with. If the value of the assets is above the personal inheritance tax threshold of £325,000 and you can’t make use of the spousal exemption or transferable nil rate to reduce the liability, then inheritance tax will need to be paid before the Grant can be issued. See this article to counteract the Catch-22 situation of having to pay the tax before you have access to the deceased’s bank accounts.
  • Place statutory notices. It is recommended that you place adverts in the London Gazette and local newspapers to seek any unknown beneficiaries or creditors. This protects you from having people coming back to you in the future demanding payment. These notices require a minimum of eight weeks to allow  any creditors or unknown beneficiaries to come forward so can delay proceedings quite a bit but they allow you to distribute the funds without liability.

After the Grant is issued (and following the taking of an Oath)

  • It can take several months to collect the assets in from the various banks, building societies and investment accounts. If a property has to be sold then this can obviously take longer.
  • A self-assessment tax return may need to be filed if there is a high level of income paid by the estate, or perhaps capital gains to declare and getting final clearance by HMRC can take several weeks or months.
  • Distribution to beneficiaries is usually quick and straightforward, but there may be delays if individuals need to be traced, or if it’s not clear who the beneficiaries are (e.g. a gift to ‘all my grandchildren’ without specifying how many there are).
  • Disputed estates or family disputes can cause major delays until matters are resolved.

If you need any help with the process of obtaining Probate or administering an estate as executor – or you simply have questions, please do get in touch and we can book in a free 30 minute consultation.

Five Questions to Ask When Buying A Leasehold Property

probate solicitor hertfordshire bedfordshire buckinghamshireThere are extra considerations that you must think about when buying a leasehold property over a freehold one. For an explanation of the differences between freehold and leasehold, see my earlier post here.

To summarise, if you buy a leasehold property, you own the dwelling but not the land it stands on. In this arrangement, you’re known as a ‘leaseholder’. On the other hand, when you buy a freehold property, you become the sole owner of both the building and the land. Depending on whether you buy a freehold or a leasehold, there may also be limits on what you can do to your own home.

In England and Wales, flats are most commonly owned on a leasehold basis, while houses are normally sold as freehold properties – however, there are exceptions.

Leaseholders have to get permission from the freeholder to make certain alterations to the property. They will also have to pay rent each year – known as ‘ground rent’ – and often have to pay an annual fee to a managing agent.

Here are my top five questions to ask when thinking about buying a leasehold property:

1. How long is left on the lease? 

Most lenders require a lease to have at least 85 years to run and anything below 90 years may make the property difficult to sell unless you pay for a lease extension, which can be costly.

Bonus Q: How much does it cost to extend the lease? The management company is unlikely to be able to give you an accurate fee until the day that you are ready to extend the lease, but you can get an idea of their fees. In terms of the premium, Martin Lewis has an excellent calculator at MoneySavingExpert which will give you an idea of how much this is likely to cost.

2. How much is the service charge/ground rent?

An obvious question perhaps, but this will tell you how much you will have to pay monthly or quarterly towards the costs of common parts at the property and will help you to budget once you move in.

Bonus Q: What are the provisions for these charges rising? There has been a lot in the news on this issue recently. It is worth speaking with your solicitor and checking the terms of the lease carefully to determine what provisions there are for these charges increasing. It is relatively normal for them to rise in line with RPI, but if there is provision for frequently doubling (e.g. every five years) or to be raised at the discretion of the management company, further questions need to be asked.

3. Are there any big items of expenditure anticipated in the near future?

Most management companies will keep a reserve for future works, although this is another matter to check. However, even if there is a reserve, any large items of expenditure (e.g. a new roof), may raise bills to be shared between the properties.

4. Has the management company experienced any issues in collecting service charges/ground rent from any other leaseholders?

This may cause issues in the deterioration of the block and communal areas, which may start to deteriorate as the charges fall unpaid.

5. What restrictions are there in the lease?

Make sure you find out if there is anything that is not allowed under the terms of the lease. For example, it is very common that pets are not allowed in certain buildings, or that washing may not be allowed on balconies. You don’t want to breach the lease on day one over a silly issue.

If you are thinking of buying a leasehold property and have questions, get in touch for a free consultation today.

Q. What happens if the Executor dies before finalising the Estate?

probate solicitor hertfordshire bedfordshire buckinghamshireSadly, this can, and does happen, especially when executors themselves are sick or elderly. This happened on one of my probate files a few years ago and it was such a sad situation, The Grant of Probate had been issued a few weeks before and then the executor died suddenly.

What happens next depends on where things are at with the administration of the estate and if the executor had a will or died intestate.

In the simplest scenario, where the Grant of Probate has not yet been issued, then any other executors named in the will can take over the application in place of the main or original executor.

If the executor died intestate, then their duties would cease and a substitute executor would step in (as above). Their own estate would be administered according the process for Intestate Estates (see Article 2).

In the case I dealt with, the Grant of Probate had been issued and the executor had a will of his own. In this circumstance it is the executor’s executor who has to act on both estates. This may seem a bit surprising as it could end up that someone completely unrelated to your estate ends up administering it!

To give you an example: Mr H’s estate was being administered by his main executor, his best friend – Mr B. Another friend, Mr K, was a second or substitute executor. When Mr B died following the issue of the Grant of Probate, his wife and executor, Mrs B, was responsible for the administration of both his and Mr H’s estates. You would assume that Mr K would have stepped in a substitute, but this is not the case. This is known as the Chain of Representation.

If you find yourself in any of the above scenarios then I am here to help!  Please contact me for a free 30 minute consultation and I can advise you on the next steps to take.  

Q. Who can apply for the Grant of Probate if there is no Will?

probate solicitor hertfordshire bedfordshire buckinghamshireIf the deceased person left no will then they are considered to have died intestate. Since no instructions were left about the administration of the estate, a different procedure has to be undertaken. An application will need to be made for Letters of Administration rather than the usual Grant of Probate. Rule 22 of the Non-Contentious Probate Rules (1987) sets out who is entitled to apply for Letters of Administration, and in which order:

  1. Spouse or civil partner (as long as they survive the deceased by 28 days). In most cases a second Administrator will need to apply, especially if there is property or money to be held in trust for children. The second person should be appointed from the next category.
  2. Children (or grandchildren if the children have predeceased). A guardian may apply on behalf of a child or grandchild aged under 18, provided they have parental responsibility.
  3. Parents of the deceased.
  4. Siblings of the deceased.
  5. Half-siblings of the deceased.
  6. Grandparents of the deceased.
  7. Uncles or aunts of the deceased.
  8. The Crown if there is no-one from categories 1-7.

There is a slightly different procedure to follow if someone has died without leaving a will. A different Oath needs to be prepared, and time allowed for tracing relatives, so it may take longer to process the application. If you have any queries or need advice on dealing with an intestate estate, please book in for a free 30 minute consultation and we can work out the best way to take things forward.

Q. How do I pay the inheritance tax due before I have access to funds?

probate solicitor hertfordshire bedfordshire buckinghamshireIt’s that Catch 22 feeling… you’re awaiting the issue of the Grant of Probate which will let you get on with all the things you need to do to administer the estate, but you get a notification from HMRC that you need to pay the inheritance tax before it can be issued. So you contact the bank, and understandably, they won’t let you take out the money until they have the Grant of Probate giving you the authority to do so.

What’s an executor to do? Fortunately there are options… some of them may not be that attractive, but hopefully you will find something that works for your particular situation.

  • If you absolutely can’t access the funds in the bank, or there isn’t enough ‘cash’ (liquid assets) as the money is tied up in investments or property, executors have the option to pay the tax upfront themselves and get a refund from the estate once the assets are available. This is known as Executor Payment.
  • If the assets consist of property (and sometimes shares or business assets), you can elect to Pay by Instalments over a period of up to ten years. The first instalment will be due six months following the month that the testator died and interest is charged on the remaining instalments (and you have to pay it on the first if that payment is late). HMRC will then remind you four weeks before each instalment is due. Although it spreads the cost, it does increase the overall amount paid and gives you, as executor, more hassle as you have to administer payments. If the property or other asset is sold, the full amount becomes payable straightaway.
  • If you get really stuck, an Executor’s Loan is available as a short-term solution. However, this can be the most expensive as banks charge standard interest rates and this option is best kept for the worst case scenario.

If you’re reading this list and despairing somewhat, then you will be relieved to hear that there is an easier way!

  • Since April 2003 many people have been able to use the Direct Payment Scheme, which was set up to allow banks and building societies to pay monies directly to HMRC to settle inheritance tax bills, and this is the most commonly used method of payment. To do this, you will need to:
    • Contact the bank/building society in question and check that they participate in the scheme.
    • File form IHT423 with each bank that will be sending money to HMRC
    • At the same time, send form IHT400 to HMRC.

Need help?

Obtaining probate and dealing with inheritance tax can be a complex process, especially when administering large estates. If you would like to take advantage of a free 30 minute consultation we can discuss your needs and devise a plan of action to take things forward. Complex needn’t mean painful! Let’s have a chat.

Sarah Ryan

Q. How do I pay for the funeral before I have access to funds?

This is a common question, so you are not alone in worrying about this. Obviously the banks will not allow access to your relative’s funds until the Grant of Probate has been issued (unless the amount held within the account is under certain limits – in which case they may accept a death certificate and signed indemnity). This can make executors worry about how to pay for the funeral or whether they will have to fund it themselves.

The good news is that, in most estates, this is not the case. When you get the funeral invoice, if you take it down to the bank where the deceased held his money and give it to them, together with an original death certificate, they will either draw a cheque or transfer funds directly to the funeral director. This will also usually be done for any arrangements relating to the wake, although this is at the discretion of individual banks.

A similar procedure can be followed to pay any inheritance tax due. For more information on this, please see my article on paying inheritance tax.

If you are acting as executor and are worried about paying for any liabilities of the estate, please contact me today for a free consultation.