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According to recent statistics, more than 98,500 people handled probate without the help of any professional services, such as legal or accountancy advice, last year – around 38% attempted to execute wills on their own. It led to an increase of around 35% of cases that end up in court because of disputes relating to wills and probate.
If you are looking to avoid any mishaps, here are three tips from us.
1. Understand your responsibilities
Many problems begin in the individual’s understanding of what it really means to be appointed in the position of executor. It is an extremely difficult situation, particularly because there are often a number of complicated laws and taxes, which themselves are constantly evolving, and it can lead to minefield of issues if rules are not followed. Another thing people don’t realise is that they are held personally liable and can be sued by the beneficiaries if anything goes wrong.
Executors will need to examine and consider all tax implications of the entire estate. Not just inheritance tax, but also whether the estate should be registered with HMRC under any new reporting rules. There may also be capital gains tax to pay, or possibly Stamp Duty Land Tax implications depending on the circumstances. Understanding your responsibilities is just the first step in navigating the complicated probate landscape. Matters can be even more complex where attorneys have been managing the deceased’s affairs during their lifetime.
2. Look for creditors
This is one that is often overlooked by executors, but it can have some pretty hefty financial consequences if not considered properly. This can be particularly difficult, because quite often individuals do not know of any creditors until they come forward. The best thing to do is to take all measures possible to show that you did all you could to locate any. You can print obituaries in your local paper or online at the Law Gazette. This will give any creditors the chance to come forward – if they don’t make themselves known until after the estate has been distributed, you may be liable for the debt. Therefore, it is really important that you carry out thorough checks.
3. Be tax-savvy (although easier said than done)
We all know about the controversial inheritance tax and that it is payable on any estate above the individual threshold of £325,000 per person. However, did you know the Government introduced something called the Residence Nil Rate Band in 2017, currently in the sum of £125,000; which allows the deceased to pass their family home to direct descendants, outside of this £325,000 threshold? This may also still be available if no property is owed at the point of death.
There is a common problem, where someone gives all or part of their home to a direct descendent before they die, because this can often still count towards the estate upon death. Again, this can be easily avoided with correct advice from the beginning – and not just at the point of will execution, but beforehand with efficient tax planning too.
The best thing to do is to secure advice from those in the know. Extra care must be taken to help avoid any costly disputes, but the individual must also know the responsibilities an executor can contain.
Downs Solicitors can offer advice relating to family law, probate, wills and trusts. We can also help with any potential disputes as well as any other existing cases relating to estate planning. Contact us for more information.