What is Probate? What does it involve and how much will it cost me?

Probate is the legal term used to describe the process which must be undertaken in respect of a deceased’s assets and estate when they pass away.

If a person dies leaving a valid Will, then their estate will be dealt with by the executors of the Will who they have appointed and under the terms of the last Will they have drawn up.

If a person dies without leaving a Will then their estate will be dealt with under the Rules of Intestacy.  These rules have very recently changed and will be dependent on the family circumstances.

The Probate process can be fairly complicated and in the majority of cases the executors or administrators of the estate will instruct solicitors to deal with everything.  In brief overview it involves liaising with all the various financial institutions and dealing with all property of the deceased to obtain an estimate value on the estate.  The required papers will need to be sent to the Inland Revenue and also the Probate Registry in order to obtain a Grant of Probate/Representation.  This gives the executors/administrators the authority they need to deal with the deceased’s estate.  Thereafter all assets will need to be called in to the estate or sold/transferred etc and all associated documents will need to be drawn up.  Ultimately all debts and liabilities will be paid from the estate and funds distributed to the beneficiaries upon which the estate can be closed down.

In terms of costs solicitors will normally charge a percentage of the estate value.  At Edward Hands & Lewis we also try and offer a fixed fee costing at the outset.  We pride ourselves in being transparent in our costings and ensure that this is fully discussed with our clients at the outset to avoid costs spiralling out of control.

At Edward Hands & Lewis we understand that this is also a very emotional and stressful time for our clients and therefore offer an approachable but professional service.  To speak to one of our specialists now please call 01455 274170

By Claire Brown

EHL Solicitors

Energy

What is an EPC?

The Energy Performance Certificate known as the EPC is needed whenever a property is built, sold or rented.

It is illegal to market your property to sell or rent without having an EPC and you could be fined if you do not get an EPC when one is needed.

An EPC contains important information relating to the property’s energy use and typical energy costs as well as recommendations about how to reduce energy use and save money.

An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for 10 years.

Normally estate agents will help with organising the EPC. An accredited assessor will issue the certificate.

By Nisha Gorania

H Pipes & Co

EHL Group Delays for money on completion

What makes a will valid?

It is essential to make sure your will is valid – if it does not meet all of the relevant criteria, it might not be usable at all, leaving your estate to be shared out according to the rules of intestacy.

But it is easy to make mistakes – big mistakes – if you don’t keep a close eye on the fine details not just in the wording of your will, but also in how it is witnessed.

To be certain that everything in your will is applicable, you might want to consult a solicitor; but either way, here are some of the key points to remember.

  1. A will must be made in writing.
  2. The person writing the will must be aged 18 or over.
  3. It must be written voluntarily, without pressure from anybody else.
  4. You must be of sound mind, aware of the importance of the document, the property included in it, and the identity of your beneficiaries.
  5. You must sign your will in the presence of two witnesses.*
  6. The two witnesses must also sign your will.
  7. Your will does not have to be dated, but it is generally advisable to do so.

*A witness to a will may not be a beneficiary of it – if a named beneficiary acts as witness, they will not be able to inherit their portion of your estate.

This rule also applies to witnesses’ spouses, so if your witness is married to, or in a civil partnership with, a named beneficiary, they too will not be able to inherit.

Any subsequent changes to your will must also be witnessed and countersigned, so take the effort to get it right first time, and make sure any alterations are made legally.

Finally, in addition to being legal in the first place, your will needs to be found after your death in order for it to be followed – so make sure you are not the only one who knows which ‘safe place’ it is hidden in.

R.A. Wilkinson & Co

 

Under what conditions should I put my possessions in a trust?

There are lots of different purposes for a trust, but in general it is all about giving the benefits from something you own to somebody else.

You might want to pass on part of your estate while you are still alive – a trust can be a safer way of doing this than, for example, transferring your home into somebody else’s name and risking them selling it out from under you.

A very different example might be a desire to set up a charitable trust, which can benefit from tax exemptions if it is deemed to be in the interest of the general public.

HMRC list the following as the main reasons why you might want to set up a trust:

  • To protect and control family assets
  • For somebody who is too young to handle their affairs on their own
  • For somebody who cannot handle their own affairs because they are incapacitated
  • To pass on assets or money when you are still alive
  • To pass on assets or money as part of your will

A trust may also be set up in some circumstances if you die intestate, although obviously if this is done, it will not be something you have any direct control over.

One of the key points about trusts is that, when you put property into a trust, it no longer technically belongs to you, so it ceases to be part of your estate.

This can cut the amount of inheritance tax your beneficiaries have to pay – especially if the trust was set up a good number of years before your death.

You can also decide how much access the trust’s beneficiaries have to the property held within it, giving them direct access, or only allowing them to benefit from the income it generates; you may also hand the decision-making power to the trustees.

You can specify that the beneficiary only receives access to the trust when they reach the age of 18, if you don’t want your children to be able to access it before they reach that age.

And there are certain circumstances that can reduce the tax paid on the income generated by the trust – for example, if all of its trustees are resident outside of the UK, or if the only beneficiary is a disabled person, an orphan, or an equivalent kind of ‘vulnerable’ person.

Trusts are complex and it is important to get them right, not only to protect the property you place into them, but also to protect the interests of the beneficiaries.

Before transferring ownership of any property, or transferring any funds, speak to a reputable solicitor and ensure your trust has been set up in the correct way.

Pricketts Solicitors

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What happens if we can’t find the deceased’s will?

A missing will is a problem, to say the least – and if somebody you love has just died, you’re unlikely to want to go through their possessions looking for a will.

However, it is very important to find the will if one exists, so try to take a logical approach to tracking it down.

  1. Do you know for certain whether or not a will exists?
  2. Do you know if the deceased had a solicitor and, if so, who it is?
  3. If there is no will in the deceased’s home or with their solicitor, know what to do.
  4. If no will can be found at all, know the alternatives.

Think back – do you remember the deceased mentioning a will to you? If you are a beneficiary, you and your spouse are not legally allowed to be a witness to the signing of a will, so just because you don’t remember seeing one signed, it doesn’t mean it doesn’t exist somewhere.

If you know who the deceased’s solicitor is or was, contact them and see if they have any record of a will, and especially if they might know where it is – even if not, they may know where it is worth looking, and where would be a waste of time.

If, even with the solicitor’s help, you still cannot find a will, there are certain other places to try:

  • Check with their accountant and/or bank, as either may be looking after the will.
  • If the deceased lived in a care home, or spent a long time in hospital, check with their carers.
  • Look for a Certificate of Deposit from the Principal Registry of the Family Division, who may be holding the will – you can also contact them even without a certificate to double check.
  • Finally, there are commercial organisations who can perform searches for you, although you may have to pay a fee for this.

If, even after all this, you still haven’t found a will, there may be nothing more you can do – therefore, you may have to proceed according to the rules of intestacy, which divide the estate according to fixed instructions, rather than the deceased’s express wishes.

Either way, a solicitor can help you to understand where you stand and what can be done, so contact your solicitor, or the deceased’s if you know who they are, as soon as possible for advice.

R.A. Wilkinson & Co

 

If I get a divorce, who pays the mortgage?

When you get divorced from somebody you live with, in a house owned via a mortgage by one or both of you, there is the question not only of who takes ownership of the property, but also of who pays the mortgage, both in the short term and in the more distant future.

The question may be more easily answered if one of you owned the property before you got married, and the mortgage is in only one name – legally speaking, this gives that individual much greater claim to retain ownership, although there may be a dispute if the unnamed partner has been paying towards the mortgage.

If you are both named on the mortgage or the property deeds, it could be harder to resolve the issue quickly and amicably, and there are actually several potential outcomes.

First and foremost, keep up with your mortgage repayments. As always, if you fall into arrears, your home may be at risk.

It is particularly important to be aware if your former partner has stopped paying their contributions towards the mortgage, as this could endanger your property even if you keep up your part of the payments.

This could, in turn, have a long-term negative effect on your credit rating (and theirs too) so it is worth doing everything you can to service the mortgage, even if your estranged spouse is making things difficult.

It may even be worth paying off the remainder of the mortgage, if you have the money to do so – owning the property outright should make it easier to decide how to include it in the divorce settlement.

If this is not possible, the courts may determine that one partner should pay a lump sum or long-term maintenance payments to the other, to service their part of the mortgage.

This might sound like it would make it impossible for you to move house later, but as long as you have proof of these payments, they should be acceptable to most lenders as proof of income in any future mortgage or remortgage application.

If you are the person moving out of the property, make sure your name is removed from the mortgage – it should be possible to do this, providing your ex-partner can prove sufficient income of their own to take sole responsibility for the remainder of the mortgage.

 

You might be asked to act as guarantor if their sole income is not enough, but be wary of doing this, as it might affect the amount you can borrow in your own right in the future.

Ultimately, there are many scenarios – from selling the property and splitting the proceeds, to a relatively amicable transfer of ownership, to a worst-case scenario of having to continue cohabiting even after your divorce.

The sooner you work out whose name is on the paperwork and who owns and owes what, the easier and more amicable it should be to agree on maintenance payments, lump sums, and the transfer of the property to either you or your ex-partner as appropriate.

Pricketts Solicitors

Stamp Duty Reform

George Osborne has used his last statement before the election to offer a noteworthy reform to the current stamp duty rules.

As of today stamp duty will be cut for 98% of people who pay it. The government’s aim was to make it a fairer banded system like income tax whereby those who can afford the most expensive homes will pay the most.

The new system will mean that all those buying a house under £937,500.00 will pay less stamp duty or the same that they were paying on the old system.

Under the old rules, stamp duty would be payable at a single rate on the whole property price. Now purchasers will only pay the rate of tax on the part of the property price within each tax band therefore paying less.

For all of those homebuyers who have recently exchanged contracts but not yet completed, the choice is given as to whether they wish to pay stamp duty at the old rate or new.

If you are in the process of buying or looking to buy a house and are unsure of how much stamp duty you will be paying please visit http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm to calculate the amount payable under the new rules.

By Nisha Gorania

H Pipes & Co

 

 

Fraud and Perjury in divorce

Recently petitions made fraudulently were dismissed or, if decree nisi or decree absolute had been obtained, were set aside.

The above happened after a member of staff at Burnley County Court noticed that 2 divorce petitions involving Italian couples had used the same address at Maidenhead. Following this it was discovered that 180 petitions issued at 137 different county courts all used the same address. These petitions were issued between august 2010 and February 2012.

The divorces were arranged by a Dr Russo so that Italian couples could take advantage of the simpler and quicker English system. The decrees which were fraudulently obtained were set aside. One couple attempted to appeal against the decision to set aside the decree and were not successful. The President confirms that “simply” perjury is insufficient to make a decree void on the grounds of fraud but that if the court is “materially deceived” by perjury or fraud as to jurisdiction, the divorce will be void. None of the parties in these divorce cases lived or had ever lived in England and Wales and none of them believed England and Wales to be their habitual residence, therefore the English courts had no right to hear the divorce petition or pronounce a decree.

It is thought that because the petitions were spread between 130 courts the fraud was allowed to continue for so long. It is confirmed that HMCTS will now centralise the handling of divorce petitions so that only a small number of courts will deal with divorce. It is also suggested that upon application for decree nisi the Petitioner will have to complete a statement of truth with a warning about including untruths in the divorce documentation. It is hoped that measures such as these will avoid anything of a similar nature happening again.

By Faye Remnant

EHL Solicitors

What does joint custody mean?

If you find yourself embroiled in a custody battle for any reason – whether you are divorcing, were already separated at the time of birth, or were never in a long-term relationship at all – joint custody is an outcome you may end up facing.

You might think it sounds straightforward – both parents taking equal responsibility for their child, in terms of decision-making and financial contributions, and access to spend time with the child – but it is not necessarily as simple as that.

Particularly if your separation is not amicable, or one parent feels the other is unfit to take a full share of the responsibility, you might have good reason to want a greater role in your child’s custody for yourself.

This is where things can get difficult, and it is up to the courts to put in place a structure that gives each parent the amount of access and responsibility that is fair to them and to the child too.

Joint legal custody is one part of this, and makes both parents responsible together for the decisions that will affect their child – but not necessarily for directly looking after the child on their own.

As such, this structure might be used if the child is to live permanently with just one parent, while the other receives only daytime or weekend visiting rights, for example.

If both parents are to take responsibility for the child’s place of residence, this is joint physical custody, and may mean the child alternates between spending one week at one parent’s house, and the next week at the other.

During an especially amicable split, it might be possible to keep this fairly informal, with the parents simply agreeing between themselves on an ongoing basis where the child should spend their time.

But if there is any risk at all of the amicability of the relationship breaking down, it is always worth having a legal structure in place to determine custody rights.

Remember that the two types of custody – legal and physical – work together, so you may have a situation where one parent has sole physical custody of the child while the other has only daytime visiting rights, but both are jointly legally responsible for the financial impact, decision-making and general welfare of their offspring.

Pricketts Solicitors

Tax

May I disinherit my spouse?

The UK legal system leans very much towards a ‘what’s yours is mine’ view of marriage, with certain shared benefits and responsibilities for married couples.

Importantly, prenuptial agreements are generally not legally binding on UK couples, although a judge may take them into account when making a ruling.

But without the ability to overrule the law – even in a written contract – is it possible to disinherit a spouse in a will?

The short answer in many cases is ‘no’.

Under the Inheritance (Provision for Family and Dependants) Act 1975, it is not possible to write a will that prevents your dependants from receiving “reasonable financial provision” after your death.

In this sense, ‘dependants’ include:

  • Your wife or husband
  • Any ex-spouse who has not yet remarried
  • A cohabiting partner for the full two years before your death
  • Your children
  • Any step-children you supported financially after marrying their biological parent
  • Any person you were financially supporting in whole or in part before your death

This is a deceptively broad definition – it ultimately includes any partners you married or long-term cohabited with, any children (including step-children) you financially supported, and anyone else you ever gave financial help to over an extended period immediately before your death.

Under the Act, you cannot cut these people out of your will and, if you do, or if you die intestate, they can petition the court to give them a greater share of your inheritance.

What’s more, you should also check that a pre-existing will is still valid at all, if you have married or divorced since it was signed.

Marriage typically revokes any existing will, which might mean you need to write an entirely new one; if you have clear ideas about who you want (and don’t want) to benefit from your estate, make sure you do this as a priority, and do all you can to prevent claims being made on your estate from people you don’t want to benefit, or who may be viewed as dependants by the law.

R.A. Wilkinson & Co