Preventing probate pitfalls

How can you prevent probate from going wrong? Alison Budge, partner at Ashton KCJ, gives her top tips.

Having a properly drawn up will is crucial if you want the distribution of your estate to go as seamlessly as possible and avoid problems along the way.

Having no will

If you don’t draw up a will, your estate will be subject to the intestacy rules, where the government tries to imagine what someone in your situation would have wanted.

Since 1 October 2014, when the Inheritance and Trustees’ Powers Act came into force, if you have children and don’t leave a valid will, the first £250,000, plus half of any remainder, will pass to your spouse or civil partner. However, if you have a partner to whom you are not married, or are not in a civil partnership, your partner will receive nothing, which may not reflect your wishes.

Having a faulty will

You should review your will every 5 years, or sooner if your personal circumstances change. This is to ensure that your will reflects your current wishes. There may be a problem, for example, if you name your children as beneficiaries, but haven’t got round to changing your will to include your latest arrival.

When choosing executors, it’s generally better to appoint people who are younger than you, so they’ll be more likely to be around to do the job. However, should no executors remain, the will can still stand. A solicitor would be able to advise your beneficiaries about how to apply for a grant with the will annexed.

If you married, or entered a civil partnership, since you last made your will, this will have automatically revoked it, unless the will contained a statement confirming that it was made in contemplation of marriage. So, if you think you may get married, you could include this statement; even if you do not actually marry, the will would still be valid.

Homemade wills often have problems that may not be apparent to the person making the will, and which are only revealed after they have died. For example, the words ‘personal property’ have a particular meaning in English law, to refer to property other than land. The testator of the homemade will may not realise this, and by referring to personal property, may get a different result from what they intended.

Poor choices in a will

You may make a will that is technically correct, but which is still ill-advised. This can contain the seeds for future problems.

One of the most potentially destructive situations results from appointing executors who don’t get on. Executors have a duty to act together, so that majority decisions are not possible in order to break any deadlock. This means that disagreements can end up having to be resolved by expensive court action, such as to remove an executor. It is not sensible to appoint all your children as executors if you think it may lead to arguments. If you don’t want to show any favouritism, it may be better to choose completely neutral third parties, such as a firm of solicitors, as your executors.

Setting up a fair arrangement when you and your spouse, or civil partner, are on second relationships, is particularly crucial. Providing a trust, such as a life interest, to ensure that neither side of the family loses out, can give much more certainty than simply a moral obligation, which may over the years be forgotten. This may also provide some protection from liability for nursing home fees for the surviving partner.

Proper records

It’s helpful to your executors if you have kept records, such as of lifetime giving. This may save your executors from having to hunt through your papers to try to ascertain the position when they come to fill in an inheritance tax account or tax return, which is needed when applying for probate. Her Majesty’s Revenue and Customs (HMRC) may even ask for 7 years’ worth of bank statements to look through, if they suspect that not all gifts have been declared by the executors.

Assets readily accessible

A list of the various accounts you hold is a helpful starting point, though a solicitor could arrange for a search of the unclaimed assets register, which includes most financial institutions in the UK, if there are thought to be other holdings.

A particularly topical problem is how to deal with online accounts. In this case, a list of the details, including passwords, kept securely but available for your executors in the event of your death, may prove helpful to unlock these funds.

Deed of variation

Even if the will or intestacy does not provide what the beneficiaries would like, as long as they are adults, they are able to change the provisions within 2 years of the date of death by arranging a deed of variation. They can elect that this be treated for inheritance tax (and capital gains tax) as if it’s what the original will had said. A variation may enable beneficiaries, who are potentially going to be liable to inheritance tax themselves, to pass their inheritance on to their children. A solicitor would be able to advise you about, and draw up, this deed.

Inheritance Act claim

If a person is not left anything by the deceased, they may make a claim within 6 months of the grant of probate. This may, for example, be if someone dies without a will, leaving a longstanding but unmarried partner.

In all of these situations, seeking advice and talking the issues through with a specialist legal adviser will ensure that you get the best arrangement for you and your family.

About the author

Alison Budge is a partner at Ashton KCJ. She specialises in all areas of private client work, including wills, trusts, estate administration and advice for the elderly. Alison has a particular interest in capital tax planning, and is an associate of the Institute of Taxation. To find out more visit the website, or follow on Twitter @ashtonkcj.