Probate and Estate Administration

Wouldn’t it be nice if there was no paperwork and no tax when someone passes away?

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At a time when the family are in shock and everything has changed, there is the added burden of sorting out the affairs of the deceased.

We understand what a cruel reality this can be. However, you don’t have to go it alone. Our Probate and Estate Administration Solicitors can manage the process for you. This will lift a weight from your shoulders, as you can hand everything over to our team.

Dealing with probate and estate administration

When someone dies, their affairs must be finalised. This is known as administering their estate. It involves paying their debts, collecting in their assets and distributing them to the correct beneficiaries.

Sometimes, it is necessary to complete the probate process first. If so, it will be necessary to get a Grant of Representation from the probate registry. Only once this has been obtained can the deceased’s estate be administered.

It doesn’t necessarily matter if there’s a Will – probate and estate administration may still be needed, regardless of whether someone left a Will or died intestate. However, a Will speeds up an administration. This is because the deceased will have appointed Executors in their Will. These are the people who are responsible for probate and estate administration. They have authority from the point of death. This is a very important advantage.

On an intestacy, the representatives are called Administrators, and are usually the deceased’s next of kin. They have no authority until they are appointed by the probate registry, but this could be six months away. In the meantime, they have no authority to manage rental properties or a business.

Attorneys under a Lasting Power of Attorney cannot act at all, as their authority ends upon the death of the person who appointed them.

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Executor and Administrator responsibilities

Executors and Administrators (collectively called personal representatives or PRs) have quite a task on their hands. This might include emptying a house and getting it on the market, working out how to pay any tax, and dealing with dissatisfied beneficiaries.

Being a personal representative comes with legal liabilities, and you can be held personally accountable for mistakes that are made. This might happen if you let assets pass through your hands or fail to settle the deceased’s debt – even those you did not know about.

Matters you need to consider are:

  • Do I have the last Will or is there another one I don’t know about?
  • Is this Will valid?
  • Have I identified all the assets of the deceased or are there searches I can make?
  • Was the deceased a beneficiary under a Trust? – that might increase any tax payable
  • Did the deceased create a Trust in his Will and how do I deal with that?
  • How can I protect myself against debts I do not know about?
  • Can I find all the beneficiaries?
  • What happens to a gift if the beneficiary has died first – where does the gift go then?
  • Was the income tax up to date before death?
  • Do I have to do an income tax return for the administration period?
  • What is my capital gains tax position during the administration?
  • Is the estate a complex estate that requires to be registered?

Distributing an estate too early, without addressing all the issues, is a risk.

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Let us help

At Aticus Law, we provide a fixed fee probate service. We can manage the entire process for you, starting with the application to the probate registry, and ending with the distribution of assets to the beneficiaries.

We can also support personal representatives in getting the inheritance tax paid in the prescribed period, which is six months from the end of the month in which the death occurred. We may be able to assist in arranging a loan for that purpose, or in getting assets released early to be paid direct to the Inland Revenue.

Even if you have decided to “go it alone”, but find yourself overwhelmed by paperwork, we can step in to carry the estate administration forward.

Deeds of Variation

If you want to amend your loved one’s Will after their death, whether for tax purposes or something else, then it may be possible to draw up a Deed of Variation. We can explain this in more detail, advising you on the advantages and potential pitfalls.

Deeds of Variation explained

It may come as a surprise to learn that when someone dies, their beneficiaries who are over the age of 18 can get together and re-write the deceased’s Will. This might happen if:

  • The beneficiaries feel that a brother, sister or other family member has been unfairly excluded
  • One beneficiary is sufficiently well off, and so wishes the money to be redirected to their own children

It is also possible to vary the distribution of assets under an intestacy, not just under a Will.

A strict two year rule applies in which the Deed of Variation must be signed. It can only vary the destination of assets that were in the deceased’s estate immediately before their death.

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Tax implications

Deeds of Variation have implications when it comes to inheritance tax and capital gains tax. This is because the gift will be treated as though it passed directly to the replacement beneficiary. The benefit here is that if the original beneficiary dies, the monies that have been redirected will not be treated as part of their estate, thus reducing the value of their estate for inheritance tax purposes.

A Deed of Variation for all other purposes is treated as a gift by the original recipient. This means it could fall foul of the deliberate deprivation of asset rules, which prevent someone from avoiding paying for their care home fees.

If the redirection is in to a Trust where infant children benefit, this will become a settlor related Trust. The income will still be treated as the income of the person making the redirection.

Could a Deed of Variation benefit you?

Therefore, Deeds of Variation can be beneficial when it comes to tax planning, when used in the right circumstances.

One example is where an unwanted Will Trust is terminated by an appointment of the assets to a surviving spouse. The spouse exemption will apply to the monies, for it will be as if the deceased had gifted the money to him/her outright, so there will be no inheritance tax. The spouse can then draw up a Deed of Variation, within the two year deadline, gifting money to a child. It is possible to do both an appointment out of a Trust and a Deed of Variation within the two year window. You cannot, however, do a Deed of Variation of assets that have already been redirected by an earlier deed.

Speak to our solicitors

The availability and suitability of Deeds of Variation in an estate administration is often missed by personal representatives who are acting alone. This is one of the many advantages to using Aticus Law in your estate administration.

We will consider whether a Deed of Variation could be beneficial to you and your family. If so, we can draw up the document and ensure it is properly executed.

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Please download our PDF for the charges related to uncontested probate applications.

Call or email us in order for us to discuss in greater detail how our solicitors can move your case forward today.

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