Executorship – Could you do it?

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What is an Executor?

An Executor is the person or people appointed by a Will to deal with the affairs of the deceased.

Duties and responsibilities of Executors

As an Executor, you are responsible for identifying all assets and liabilities held by the deceased. With this information, you must then complete the relevant inheritance tax forms as accurately as possible before applying for Probate, should this be necessary. Once you receive Probate, you must then settle all debts and liabilities from estate funds, before accounting to beneficiaries for their inheritance.

Risks of acting as an Executor

Being an Executor is a demanding role and can prove to be time consuming and stressful. If the administration process is not correctly adhered to then there can be various repercussions which may not be obvious to a lay person.

As Executor, you can be held personally liable for mistakes and negligence when administering to an estate. If you are not familiar with the administration process, it is easy to make mistakes such as submitting an incorrect tax account, not adequately protecting an unoccupied property or failing to contact all relevant organisations.

Where mistakes are made, there can be serious consequences. Failure to disclose relevant assets or liabilities on tax forms can mean that penalties are incurred or in extreme cases you can even be prosecuted for fraud. Failure to pay inheritance tax when it is due can accrue unnecessary interest on the balance due which you will be responsible for paying. Failure to correctly identify the extent of a beneficiary’s entitlement, or to omit payment of a legacy altogether, can lead to complications once the estate has been distributed as you will be held responsible for resolving such issues.

Another crucial aspect of Executorship is ensuring that estate funds are kept separate from your own personal funds. You must open a separate client account for this purpose. Failure to do so can be treated as misappropriation of funds and can cause difficulties in identifying payments, interest and tax.

In addition to the above, one other important point to consider is the concept of intermeddling. As an Executor you are free to renounce your role as Executor if you feel the administration is too difficult or you do not wish to undertake this duty. This must be done at the very beginning, as any action you take in your capacity as an Executor can result in intermeddling meaning you are prohibited by law to fulfil your duty and can no longer stand down. A minor task such as payment of a small utility bill can result in intermeddling.

Why should you appoint a professional Executor?

By appointing professional Executor, you can rest easy knowing that the administration process will be dealt with by a dedicated and experienced team. A professional Executor will relieve you of any stress and burden at what is a difficult time. More importantly, a professional Executor will take on the liability associated with the administration of an estate and will be fully insured in the event of any issues arising.

For further information regarding the appointment of a professional Executor, please contact the SWW Trust Corporation.

Pet Lovers and Probate

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For those of us with furry friends, we do sometimes wonder what life will be like for them should we pass away. We want to ensure they are protected and loved once we are no longer there to look after them.

It is possible to leave your animals in your Will to friends or family members, whom you trust to take care of your pets once you are gone. A small monetary gift alongside this could help to ensure your pampered pooch is kept in a style to which he or she has become accustomed.

Specifically placing money into trust for the sole benefit of an animal is problematic: English law gives very few exceptions to the rule that only human beneficiaries can receive money under a trust. Although there is a common law means of leaving money for the welfare of an animal for a defined number of years, this is rare and not particularly advisable.

However, providing money on a discretionary trust basis to the recipient of your pet may be a more nuanced means of ensuring that funds might be used for your pets after you have died.

Some charities operate a service whereby they can quickly and safely receive your pets, and provide food and shelter for them once you have passed away: you may wish to speak to your local charities and see what options may be available to minimise distress and harm to your pets at that difficult time.

You may also want to consider leaving a gift of money for a relevant charity: not only will this help look after other animals, but it may also reduce the inheritance tax payable on your estate.

Speak to your local will writer if you have any queries over how best to look after your beloved pets.

Pet lovers and probate – James Greenwood

Further Gifts of Residue – The importance of making further provision in your Will

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When drafting your Will inevitably the most important decision is who will benefit from your assets. Most people will have a clear idea on the beneficiary of their estate at the point of drafting a Will. But many fail to consider what may happen should their desired beneficiary die before them.

On the death of the testator, the Executors of the Will must identify the beneficiary and contact them regarding their inheritance. Most Wills stipulate a certain time period in which the beneficiary must survive in order to benefit, i.e ‘I give my residuary estate to X subject to him surviving me by 30 days’ but what happens if that beneficiary died months or years before and there are no further instructions in the Will?

Under such circumstances the estate is said to fall to partial intestacy. Most people commonly understand intestacy to mean that there is no Will in existence, but even where a valid Will exists which fails to or does not properly dispose of the estate then the assets must still be distributed in accordance with the rules of intestacy.

This can cause problems if there are no immediate family members. The Executors must then begin the process of searching for the person(s) entitled to the assets and this can prove extremely time consuming and difficult. Some firms will be able to undertake this research on your behalf but it is not uncommon for such firms to charge in excess of 25% of the estate for doing so.

All the above can be easily avoided by simply including a ‘Further Gift of Residue’ clause in your Will. You can then specify who should inherit your assets in the event that your desired beneficiary has already died and you can rest assured that your wishes will take place. You can also provide multiple further gifts which will further help you to control the eventual distribution of your estate.

For more information regarding drafting a Will and choosing your beneficiaries then please contact the Society of Will Writers.

 

Ten Celebrities & their peculiar wills and bequests.

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Ten Celebrities & their peculiar wills and bequests.

  1.  Janis Joplin

Recording artist and songwriter Janis Joplin, famous for her work in the 1960s and 70s, met a tragic death in 1970. Perhaps as a means of wanting to leave a positive memory for her family and friends, Joplin’s will set aside $2,500 for a wake party in the event she passed away.

  1. Mark Gruenwald

Mark Gruenwald was best known for his work with Marvel comics and serving as Executive Editor of Captain America and Iron Man. After a fatal heart attack in 1996, an interesting request was discovered in his will: He was to be cremated and his ashes were to be mixed with ink that could be used to print comic books—and they were.

  1. Harry Houdini

The famed magician who died in 1926 left in his will 10 random words to his wife. He stated in his will that she should hold a séance every Halloween following his death and that he would communicate with her through those 10 words. After his passing, his wife held such séances every year for 10 years, eventually stopping since Houdini did not make his presence known.

  1. Napoleon Bonaparte

You’re no doubt aware of the historical significance of Napoleon Bonaparte, but you may not know about an odd bequest in his will. Upon his death in 1821, his will directed that his head be shaved and his hair be distributed among his friends.

  1. Robert Louis Stevenson

Some bequests don’t involve property or anything tangible at all. When Robert Louis Stevenson, author of the classics Treasure Island and the Strange Case of Dr Jekyll and Mr. Hyde, passed away in 1894, he left a friend something she would never forget. Annie H. Ide’s birthday fell on Christmas day and she had confided in Stevenson feeling cheated out of a real birthday. So as part of his last wishes, he left her his own birthday of November 13.

  1. Leona Helmsley

Hotel owner Leona Helmsley made more headlines in death than she did during her life. When she passed in 2007, she left 10 million to her brother, 5 million to her grandsons, and 12 million to her dog, Trouble.

  1. Dusty Springfield

’60s pop singer Dusty Springfield left very specific instructions in her will. Springfield’s will demanded that her cat, Nicholas, be fed imported baby food, live in an indoor tree house, be sung to sleep at night with Dusty’s old records, have his bed lined with Dusty’s pillowcase and nightgown, and get married to a friend’s female cat.

  1. Philip Seymour Hoffman

When actor Philip Seymour Hoffman passed away of an overdose in 2014, his will kicked up some family drama. Hoping to avoid turning his children into “trust fund kids,” Hoffman left everything to his girlfriend instead of his children. He also requested that his son, Cooper, be raised in three cities: New York, Chicago, and San Francisco.

  1. Charles Dickens

English author Charles Dickens was really particular about his funeral. In his will he made sure to write out wardrobe requirements for his memorial service. He requested that “those attending my funeral wear no scarf, cloak, black bow, long hat-band, or other such revolting absurdity.

  1. Marilyn Monroe

Marilyn Monroe was a troubled soul — maybe that’s why she didn’t have the foresight to leave her legacy to her family. Instead, Marilyn left all of her personal effects to her acting coach, Lee Strasberg. Apparently, all of her belongings sat in Lee’s basement until the day he died.

Written by Courtnee Briggs

Collecting estate assets and paying estates liabilities and expenses

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Collecting estate assets

When you have received the Grant of Probate this will need to be taken (or posted) to the bank, investment company etc. along with the completed withdrawal form (if required). It generally takes 2-3 weeks for the funds to be received into the executors account (or receipt of a cheque if requested).

*Please note: you will need to set up an executors account to receive the estates assets – this should not be paid into your personal account.

 

Payment of liabilities and expenses

Liabilities that usually arise during the probate and administration process are generally incurred as follows:

  • Liabilities that were outstanding at the date of passing away or due soon thereafter
  • Expenses incurred during the probate and administration period

 

*It is important to note that before any inheritance is distributed to the beneficiaries that all liabilities and expenses incurred must be paid first.

Liabilities should be paid in the following order:

  • Secured creditors – mortgages or loans secured on the property – if the property is not being sold and there is no joint mortgagee then the outstanding mortgage will need to be redeemed from the estates assets
  • Funeral Expenses
  • Testamentary expenses – during the administration of an estate there will be expenses incurred for example, paying for death certificates, probate application fee, insuring the property, professional fees for valuations
  • Wages – if the deceased was an employer
  • Unsecured creditors for example, overdrafts, bank loans, credit and store cards
  • Interest on secured loans
  • Deferred debts for example, loans to friends or family

 

The above liabilities will be paid from the estate (if solvent)

The Grant Application

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The Grant Application

Once you have all valuations for the assets and liabilities in the estate as at the date of death, you have everything you need to begin putting together the application to obtain the Grant of Probate or Grant of Letters of Administration.

The Grant of Probate or Grant of Letters of Administration (collectively known as Grant of Representation) is the legal document issued by the Court (Probate Registry) providing the Executors, Administrators or Personal Representatives of the estate with the legal authority to deal with the deceased’s estate.

A Grant is not always required and there are some instances where the administration of an estate can be carried out without obtaining a Grant. For example:

  • Where a property is held in joint names (joint tenants) and passes by survivorship to the other joint owner(s)
  • Where there are joint bank accounts and only a death certificate is required in order to have the deceased’s name removed from the account and transferred into the survivors sole name
  • Where the amount in any solely held bank accounts is small (banks and building societies have limits as to the value of assets that they will release without seeing a Grant)

There is a common misconception that you if you have a Will, a Grant of Probate will not be required, which is certainly not the case. The need for a Grant is dependent upon the types of assets in the estate and the value of those assets.

Where there is any property owned solely by the deceased or where they own a specified share in a property (as tenants in common), then a Grant will always be required in order to sell or transfer that property/share of that property.

 

 

 

 

For clarity, there are two ways of owning property and how the property is owned will depend upon how the property is dealt with upon death:

  • Joint Tenants – this is where each owner owns the whole property and there are no defined shares. Upon the death of one owner, the property automatically passes to the surviving owner(s).
  • Tenants in Common – this is where each owner owns a defined share of the property. When one owner passes away, their defined share will be dealt with in accordance with provisions in their Will or under intestacy and a Grant of Probate is required to deal with this share.

 

There are several elements required by the Probate Registry, which make up the Grant application as a whole:

  1. Completing the forms

As part of the application you must complete the relevant inheritance tax forms by including all details of the assets and liabilities in the estate.

There are two main forms:

IHT205 – This is the standard tax form and is used where there is no inheritance tax to be paid or where everything passes to the spouse of the person who has passed away.

IHT400 – This is the form used predominantly where there is inheritance tax due and is submitted along with the relevant schedules and supporting documents.

You will need to complete and submit tax forms for the estate regardless of whether there is likely to be tax due or not. It is important that all date of death figures are included in the forms and that the figures are as accurate as possible. There is a risk that you may get a penalty if any of the information on the form is inaccurate.

  1. Swearing the Oath.

The Oath is a document that contains all the necessary information to support the application and also sets out the legal requirements expected of the holder of the Grant (Executor/Administrator).

The Oath should be sworn at the office of a local solicitor or a commissioner of oaths and there is usually a charge of around £7 – £10 for swearing the document. The document is ultimately a promise that the information you have given is true to the very best of your knowledge.

Where the deceased has left a Will, this will also need to be taken along with the Oath and sworn.

It is important to note that the original Will is retained by the Probate Registry when the application is submitted.

  1. The application

Once you have completed all the relevant forms and have sworn the Oath and Will, you are then ready to submit the application to the Probate Registry. There are district probate registries and probate sub-registries around the country. You should generally submit the application to your nearest registry, however, there are no restrictions on which registry you submit the application to.

The Grant can take any from 2 – 4 weeks to receive back from the Probate Registry, assuming there are no complications with the application.

 

Distribution of an estate

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Distribution of the estate

Once you have collected in all estate assets and settled all the estates tax affairs and any outstanding liabilities or disbursements, you will then be able to begin distributing the estate in accordance with the terms of the Will, or in line with the rules of intestacy.

Distribution of any estate assets is provisional upon the expiry of the Statutory Notice to Claimants. This is where a notice is placed into the London Gazette and into a local newspaper and lasts for a period of 60 days. The purpose of this is to give any claimants or creditors 60 days to make a claim against the estate, after which the estate will have some protection against any claims that arise in the future. It is not recommended that the estate is distributed or finalised until after this 60-day period expires as it will protect the Executors/Administrators from any liability in the future.

Before any distributions, it is also recommended that you obtain identification for each beneficiary (generally photographic ID and proof of address will suffice), so that you can confirm and prove that each beneficiary is exactly the individual referred to under the Will or entitled under intestacy.

  • This is particularly important where any beneficiaries are referred to by ‘nicknames’ under the Will or where beneficiaries have become married, meaning that their name will differ from that in the Will.
  • This will prevent any uncertainty and will prevent distributions being made to the wrong individuals, as the Executor/Administrator will ultimately be liable should this be the case.

Any specific gifts or pecuniary legacies set out in the Will should be distributed first and can therefore be distributed at this point.

  • It is recommended that any payments of pecuniary legacies to any beneficiaries should be made by either cheque or bank transfer. This is because these are both traceable and can be referred to and proven at a later date should any queries arise.
  • You should ideally get some form of receipt from each beneficiary to confirm that each has received their entitlement under the estate.
  • If there are any gifts or legacies due to a beneficiary who is a minor it is sometimes possible to pay their legacy to their parent or guardian, who can provide receipt on their behalf, depending on the wording of the Will. Alternatively, where this is not possible, funds will need to be held upon Trust for any minors until they can provide valid receipt.

At this point, any property that has not already been sold or dealt with or any property specifically gifted to a beneficiary in the Will, can be transferred into their ownership.

  • It is recommended that you seek assistance from a conveyancing solicitor to transfer any property to any beneficiaries.

If there is direction in the Will that assets should be held under a Trust, then you will need to arrange for the Trust to be drafted and registered.

  • Unfortunately, the drafting and setting up of any Trusts is a reserved activity and you will need to contact a professional for advice and services in respect of this.

Finally, before any distributions are made to any residuary beneficiaries, you should put together estate accounts.

  • The estate accounts should outline all assets and liabilities in the estate, along with any payments that have been received in or paid out of the estate.
  • The accounts are generally required so that each residuary beneficiary may see exactly how much they can expect to receive under the estate.
  • Once completed, each residuary beneficiary and any other Executors should receive a copy of the accounts and approve them (it is advisable for each beneficiary to provide you with their written approval of the accounts).
  • Only once the accounts have been approved should you make any final distributions to the residuary beneficiaries. Again, you should ensure that you distribute any funds by way of a cheque or bank transfer so that any payments are traceable and you should obtain a receipt from each beneficiary to confirm that they have each received their entitlement under the estate.

Once all distributions have been made and all matters have been finalised for the estate, you should ensure that all documentation and paperwork in relation to the administration is kept in a safe and secure place. Do not destroy any of the documentation as it may be that you will need to refer back to the paperwork in the future. Professional companies and legal bodies are legally required to keep and store files and paperwork for a minimum period of 7 years, so this may be something to consider.

Preservation of assets

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Preservation of Assets

When someone passes away, it is important to make sure that the relevant people, companies and organisations are informed. You will also need to ensure that any assets of the deceased are preserved until such time when they can be collected, sold or distributed.

Informing the appropriate companies and organisations about the death of a friend or relative can be an emotional task at an extremely difficult time. However, doing this as soon as possible will help prevent any overpayments to or from the deceased into or out of any bank accounts; particularly any overpayments of benefit from any government organisations. It will also allow companies to put any accounts on hold and will provide you with more time to deal with assets and any liabilities in the long run.

Companies you might need to inform include:

  • Any government organisations (HMRC, DWP, DVLA, Passport Office, local council)
  • Banks, mortgage, pension or insurance providers
  • Investment companies or share registrars
  • Utilities (gas, electricity, telephone, broadband, water & sewage, TV licence)
  • Any other companies who you think might need to know (care companies, landlords, subscriptions or memberships, employers, health professionals)

You may call, write to or email companies and organisations to inform them of a death and most will require a copy of the death certificate for their records.

Some organisations offer assistance to make the process as smooth and as straightforward as possible. For example, when you register the death, often the registrar will ask whether you would like to use the ‘Tell Us Once’ service. This is a service that allows you to report a death to most government organisations in one go and helps to prevent overpayments. The registrar will either complete this service for you at the time of your appointment, or will provide you with a unique reference number to access this service You can also access this service online at:

https://idp-death-tellusonce.direct.gov.uk/Death/Enrich/BeforeYouStart

Information you will need to assist you in reporting the death includes:

  • Date of birth
  • Date of death
  • Address
  • National Insurance number
  • Any relevant reference numbers
  • Occupation
  • Marital status

Once informed, any bank accounts will be frozen, which will help preserve and protect any funds.  However, this will obviously also mean that any direct debits or standing orders will not be paid, so it is important that you ensure that all affected companies are informed.

 

Whether the deceased owned or rented a property, it is crucially important that steps are taken to preserve both the property itself and the assets and personal possessions kept inside the property:

  • If the property is owned, make sure that adequate insurance is in place for the building and its contents. If the property is unoccupied, make sure the insurance policy provides cover for this.
  • Ensure that all door locks and windows are secure.
  • Make sure that keys are kept in a secure place and that you are in possession of any other sets of keys or at least aware of who else may has a set of keys to the property.
  • Do not allow anyone to enter or remove anything from the property without consent.
  • Make note of any valuable items at the property (remove these or store these in a secure place if possible)
  • Gather all relevant paperwork together which will assist you in contacting the relevant companies and organisations to inform them of the death.
  • Also gather all original documents such as birth certificates, death certificates, marriage certificates, divorce papers and any Deed poll documents.
  • In Winter months ensure that heating is left on low or the system is drained down to prevent water damage and comply with insurance.

Once you have done all of this, you will have the relevant paperwork and information to allow you to begin dealing with the administration process for the deceased’s estate.

Information that an executor will need to collect

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Collating financial information when someone dies

 

It is the executor’s responsibility to collate all information relating to the deceased’s person’s asset and liabilities. If the deceased left property, a large amount of cash or investments then the executor will need to apply for a Grant of Probate. This will provide the executor with the necessary legal authority to deal with the deceased’s assets and, if relevant, sale of the property.

Before the Grant of Probate can be applied for the executor will need to complete a financial inventory of all the deceased’s assets and liabilities to include: –

  • Property – was this owned jointly with another person? It may be that the deceased owned a share of the property (tenants in common). The value of the property/share must be established by way of an estate agent’s valuation.
  • Bank accounts – obtain a statement that shows the balance at the date of death
  • Shareholdings – obtain the share price for the date of death and multiply this by the number of shares held. If you are unsure how to do this you can speak to a stockbroker.
  • Investments – write to the organisation holding the investment and request a valuation for the date of death
  • Chattels (personal items) of a high value – arrange a written valuation
  • Vehicles – a local garage may value the vehicle or you can use an online valuations website
  • Cash found – if cash is found it must be recorded and held safely by the executor
  • If any utilities have been overpaid by the deceased you will need to record these in the financial inventory as a credit at the date of death

Liabilities

 

When collating financial information, you will need to ensure that you are aware of all liabilities for example: –

  • Utility bills – gas, electric, water, telephone and Council Tax
  • Credit Cards, Store Cards
  • Loans and finance
  • Mortgages
  • Overpayment of pensions and benefits

 

Once you have ascertained all assets and liabilities you are now able to complete either the IHT 205 or IHT 400 form. For more information please contact admin@swwtrust.co.uk

Arranging a funeral

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Arranging your loved one funeral

A funeral may only take place after the death has been registered. There are countless decisions that have to be made by the organiser during one of the most upsetting times of their lives. Often people describe organising a funeral as baffling, terrifying, weird, overwhelming and devastating but many of these emotions can be alleviated if there was a funeral plan in place.

Not everyone wishes to have a traditional funeral, some may choose a humanist funeral, green burial or even direct cremation. So, how do you find your loved one’s directions? If they had a Will they would have provided their funeral wishes or they may have indicated they had a funeral plan and if not, you will have to make these emotional decisions.

Below, you will find a useful checklist for arranging a funeral:-

  • Does the Will/funeral plan provide directions for burial/cremation?
  • Are ashes to be scattered or interred at a specific place?
  • Contact the funeral director, the GP or hospital may provide these details or, you may be aware of a reputable local company. This is a very distressing and emotional part of dealing with the death of a loved one. There are so many decisions to be made for example, where the service will take place and what time, how many cars will be required, will the coffin be pine or oak, chrome handles or gold-painted ones, what music will be played, arrangement for visiting your loved one in the chapel of rest. It may be beneficial to have a family meeting prior to meeting the funeral director so that the above areas can be discussed.
  • How many attendees and organisation of this
  • Order of Service
  • Flowers
  • Newspaper announcement
  • Where will the Wake be held – food, drink and accessibility for attendees

Payment of the Funeral

According to latest research* a funeral arranged in the usual way costs, on average £3,675 and in London, the price of a funeral is almost double the national average.

If your loved one had available funds in their bank account then arrangements can be made for the funeral account to be paid direct from these available funds. Ask the funeral director for a full account and take this to the bank – they will arrange payment direct to the funeral director.

In certain circumstances, you can apply for Bereavement Support Payment – to see if you are eligible call the Bereavement Service helpline or pick up a form from your local JobCentre Plus Bereavement Service Helpline Telephone: 0345 606 0265.

However, you choose to arrange a funeral, you should set a budget that you stick to.

 

 

Type of funeral Average cost* Includes
Direct cremation £1,600.00 Collection of the deceased, a simple coffin, and return of the ashes
Cremation using a funeral director £3,214.00 Collection and care of the deceased, a basic coffin, hearse and managing a simple service; but does not include an elaborate ceremony
Burial using a funeral director £4,136.00 Collection and care of the deceased, a basic coffin, hearse ad managing a simple service; but does not include an elaborate ceremony