Putting their needs first
There’s no more difficult time in our lives than when we lose a loved one. It is something that every one of us goes through and yet nothing can prepare you for the experience. Unfortunately, dealing with the grief is not the only hardship. There will often be a host of legal and financial problems to settle. That is where we can come in and take the burden for you. Perhaps you will need help administering the estate of your loved, especially if you have been appointed you as an executor in their will, or they left no will and you are next of kin. A K Gulati will be there to competently and sympathetically guide you through the process, be it gathering assets and financial information, paying debts, settling taxes, or any of the other issues that can arise from a loved one’s passing.
What is Probate?
Administering somebody’s estate after their death and in accordance with their will, or dealing with someone’s finances and assets after they have died, often involves probate. The word probate comes from ‘proving’ the will of the person who has died i.e., proving it is the genuine article. The end result is a Grant of Probate which grants the Executor authority to handle the estate assets, and proves their authority to any banks, building societies and other organisations that may hold the deceased person’s assets. At the same time, information on the estate is sent to HMRC, including detailed financial information and a calculation of the amount, if any, of tax owed to the Government.
The formal process of probate is sometimes not required, for example where mainly joint assets are held and inherited by, for example, a spouse. On the contrary, a grant is normally required to deal with large assets held ‘solely’ in the name of the deceased. Where the deceased left no will, a slightly different process is followed.
Simpler estates typically have fewer beneficiaries, no debts to pay – including taxes, no property to be sold, no large assets to liberate, no trusts involved, and require no post-death variation. Although this is not typical, in such cases, assuming there are no other complicating matters, we are happy to consider giving you a low quotation and/or fixed fee. Our fees do otherwise vary depending on estate complexity.
Personal Representative Responsibilities and Breach of Duty
The failure of a Personal Representative to perform his duty properly, even in the case of innocent mistake, can leave the personal representative in hot water and with personal financial liability, especially if they fail to pay liabilities, debts or taxes, or fail to identify and distribute properly to a beneficiary. Disgruntled family members and dependents can still bring a claim following the issuing of Grant of Representation. Even worse, creditors of the deceased can claim up to 12 years after his or her death.
The duties and tasks of a Personal Representative (the term for Administrators and Executors) can be highly protracted and onerous, and it can take between 6 months and 2 years before they are free of the practical responsibility. Even after the practicalities are completed, responsibility will continue in any ongoing trusts.
Given the personal liability personal representatives face in performing their duties, it is critical that everything is done correctly and to the letter. For this reason, many prefer a specialist solicitor to carry out the detail of the estate administration. For this reason, let AK Gulati & Co’s Probate Specialists be your first port of call. We can minimise the risk for you, give you peace of mind, and we are highly sympathetic to your needs having spent years working with bereaved clients of all ages and dispositions.
How can we help you?
If you do decide to administer the estate yourself, you should be aware that it can take many hours of intricate administrative work, depending on the complexity and size of the particular estate. When you instruct us, we shoulder all responsibility and liability associated with the administration of your deceased’s estate, dealing with all asset types, all taxes and distribution to all beneficiaries.
At AK Gulati and Co, our probate solicitors specialising in:
Obtaining the Grant of Representation
Handling estate administration and distribution to beneficiaries
Preparing Estate Accounts for Personal Representatives
Advising on and preparing Inheritance Tax returns
Advising on arrangements that will reduce Inheritance Tax.
Our probate clients
Some of our probate clients are high net worth individuals, members of the professions and working at a senior level. We also act for many people who do not have vast experience in business. We act in all manner of estates, be they small or large. We are happy to help clients reduce the legal bill, if there are parts of a probate they can perform themselves without accepting formidable risk or overly onerous administration. In practice, though, our clients tend to prefer the peace of mind knowing that we will complete the estate administration for them.
How does probate work?
Probate can involve a lot of complicated legal and financial work which can be broken down into five different steps.
Step 1. Establishing all of the deceased’s assets and debts. The difference between the two is the value of the deceased’s estate.
Step 2. Verifying entitlement to the Estate under the terms of the deceased’s Will, or otherwise in accordance with the law governing intestacy, and obtaining the necessary identification documents for those beneficiaries.
Step 3. Paying the inheritance tax due to HMRC, submitting the tax return, and making application to the probate Registry for the Grant of Representation.
Step 4. Receiving the grant of representation, selling the estate assets, paying estate liabilities, paying the expenses of estate administration, and reporting to HMRC in respect of any further Inheritance Tax, Income Tax or Capital Gains Tax due from or to the estate.
Step 5. Preparing the estate accounts which evidence all payments to and from the estate, and the remaining balance that can be distributed to beneficiaries, and sending the accounts to the Personal Representatives for their approval.
Step 6. This final step involves distributing the estate balance, and transferring other assets, to beneficiaries. This assumes there have been no challenges to the probate. In the unlikely event that there is a challenge, it will need to be defended against, or in the worst case decided in court.
Unfortunately, while Probate Solicitors handle this kind of work on a daily basis, it can leave the layman feeling totally overwhelmed. However, you have no need to worry, as we can work entirely on your behalf.
How do I obtain a copy of the will?
If you are a named executor, the friend or family member for whom you are acting will normally tell you where his will is stored, and often this will be with the solicitor who prepared it for him. As an executor, you will have a right to obtain it from the solicitor, or perhaps bank, who has stored it.
Upon proving their identity and disclosing the death certificate, a copy of the will is released to an executor.
If you are not an executor, you will, unfortunately, not immediately be entitled to see the Will. Nor is there any requirement that the executors disclose the will at this stage. However, once the executors have received Grant of Representation, the Will becomes a public document, and anyone can apply to see the contents. Also, crucially, at this point, the executors obtain, by way of the grant of representation, the authority to liquidate the assets of the estate (certainly in the case of larger bank accounts and real estate).
What happens when someone dies and they haven’t made a will?
The distribution of the deceased’s estate is governed by the rules of intestacy. In essence, it is based around the ideas of ‘fairness’ and ‘next of kin’. However, it is a very complex set of rules, which sometimes can appear to generate counterintuitive results in terms of who benefits and by how much.
The rules are quite tough and have not really caught up with the idea of the modern family, and so do not provide readily for stepchildren and step siblings, unmarried couples and unregistered partners.
Whoever administers the estate must have a fairly intimate picture of the family tree of the deceased because the intricacies of the law intestacy can very easily lead to mistakes in the identification of administrators and beneficiaries. Any breach in their duty, even if by innocent mistake, can lead to personal liability for an administrator. For this reason, we normally advise that a specialist solicitor deals with an intestacy situation.
At A K Gulati & Co, our Private Client solicitors can provide you with expert assistance to ensure your will reflects your wishes precisely, and to ensure that you pass on as much as possible with the effect of Inheritance Tax minimised.
If you facing dealing with an intestacy, please call our Estate Solicitors on 020 8770 7979. Alternatively get in touch with us online for free initial advice.
What can be done if beneficiaries cannot be located?
It is a common misconception that if a missing beneficiary cannot be located other family members can inherit their share. This mistake can be very costly for beneficiaries, both emotionally and financially. There are a number of ways we can solve the problem for you. To find out more contact us on 020 8770 7979.
What is Inheritance Tax?
Inheritance Tax (or ‘Death Duty’) is payable at the current rate of 40% on any sum above the threshold which is currently £325,000. Gifts given – even years – prior to death, money put into trust prior to death, whether there was a predeceasing spouse, who is inheriting the home – all of these things, and more, can affect the amount of tax owed to HMRC.
There are ways of reducing your Inheritance Tax liability, but they do require some specialist and detailed knowledge. Advice can be very cost-effective, and A K Gulati & Co can assist you whether this be estate planning when you are considering your will, or helping you complete the right forms with the right information after your loved one has passed away.
Please see our Breach of Duty section: be aware personal representatives are personally financially liable for any mistakes however innocently made.
Our values of integrity and sympathy are core to the service we provide.
DISCLAIMER: This is not legal advice. It is intended only to provide information of general interest about current legal issues.