Why use a Family Law Solicitor when someone dies?
The death of a loved one is one of the most stressful events that can happen in your life. Administering a deceased’s estate can sometimes be quite complex especially with the constantly changing inheritance tax and probate laws. There are a number of practical and technical matters which have to be dealt with to ensure the deceased’s estate is administered correctly.
Below are just some of the matters where you may need some advice and assistance from a Family Law Solicitor:
1. Validity and effect of a Will
It can sometimes be hard to identify the group of beneficiaries in a Will. Some Wills need someone with legal knowledge to identify the meaning and effect of the Will.
Some Wills can be quite complex especially when they contain trusts for the benefit of a vulnerable group of people. These can include minor children, children from previous marriages and disabled beneficiaries.
2. Grant of Probate
When someone dies, the assets are frozen until they can be released using a Grant of Probate (when there is a Will) or Letters of Administration (when there is no Will). These documents are issued by the Probate Registry once the valuations of the estate have been submitted to HMRC and any inheritance tax has been paid. The personal representative of the estate (ie Executor appointed in the Will or next of kin if there is no Will) will also need to swear an Oath. Depending on the size of the estate, the forms can be quite complex and you will need to provide evidence for each valuation you have submitted.
If you obtain the Grant through a solicitor, you can avoid the need for an interview at the local Probate Registry and the court fee will also be reduced.
3. Tax implications
An individual can leave up to £325,000 on their death before it becomes subject to tax at 40%. If their estate is left to their spouse and they have not made any gifts in the last 7 years, it is unlikely that there will be any inheritance tax to pay. If you leave your estate including your property to your children or grandchildren, you can also benefit from an additional £125,000 (for tax year 18/19) which is called the Residential Nil Rate Band.
Therefore, a married couple can leave their estate to each other free of tax. On the second death and provided they leave everything to their children, they can benefit from leaving up to £900,000 before it is subject to tax at 40%. This is likely to go up in 2020/21 which means you may be able to leave up to £1 million on your death before any tax liability.
Inheritance tax can be very complicated to work out especially if you need to take into consideration all the allowances. A solicitor can take the stress off you and do the complex calculations themselves. They can also add in any allowances the deceased is eligible for and therefore reduce the inheritance tax liability on the estate.
Some Wills contain Trust which, if not administered correctly and within the strict deadlines, can result in a tax bill or fine from HMRC. Trusts need to be registered with HMRC and annual tax returns need to be submitted to declare any income tax or capital gains tax. Some Trusts also include property which will need to be registered at the Land Registry to protect the beneficiary’s interest. Trusts can be very complicated and a solicitor can help by assisting you with the administrative tasks involved.
5. Intestacy Rules
Many people do not make a Will before they die and their estate is distributed in accordance with the intestacy rules. This can sometimes make it difficult to identify who is entitled to the estate.
The division of the estate can also be quite complicated if the deceased leaves a spouse and children as it does not necessarily mean that the spouse will inherit the whole estate. A solicitor will have the legal knowledge to advise as to who is entitled to inherit under the intestacy rules.
6. Varying the Will
Some beneficiaries of a Will wish to redirect their inheritance so it can be given to their own children or other family members. There are many reasons for this including reducing the inheritance tax liability of the estate. A solicitor can advise you of the implications of varying a Will and prepare the necessary documentation to do this.