FAQs about Wills & Probate

EAST LONDON SOLICITORS WILLS & PROBATE FAQS

What are typical examples of the use of a discretionary trust in a will ?

You may wish to give your estate to people who may not be able to fully control their money e.g. a disabled person, someone with mental problems, or a child. With a discretionary trust, where control of the funds for that beneficiary is retained by trustees who will give money to that beneficiary as and when they consider appropriate. This also may have the advantage of enabling the beneficiary to retain State means-tested benefits, as any payment to them is at the absolute discretion of the Trustees. Other common examples of use of a discretionary trust include where there has been a second marriage,  where there are step-children or where children are independently wealthy and it would be sensible to plan to mitigate the Inheritance Tax on their estates.

What happens to a gift if the beneficiary dies?

If a chosen beneficiary predeceases you or does not reach the age of entitlement you select in your will, then you can make provision in the will for who would receive the gift in their place. For example, you may wish your estate to be divided equally between all of your children but wish that the share of any who predecease you is re-divided amongst the survivors. Alternatively you may wish for the spouse or children of your deceased child to inherit his or her share instead.

What happens if we are living together but not married ?

As regards wills, there is no law providing for a long term partner to benefit if his or her partner dies without leaving a will, so it is essential that you both have a Will otherwise on the death of one partner the survivor is unlikely to inherit anything.

Can I cut out members of my immediate family from my Will?

The law provides both your spouse and your children have statutory rights to your estate based on financial dependency, which can to some extent override a will, but the content of the will would be taken into account in any application made by family members you do not wish to benefit, so you may wish to state your reasons in the will.

What’s the difference between an Executor and a Trustee ?

With most wills, it is common to also appoint the Executors as Trustees. The main difference is that a trustee is a role which only applies if the will makes provisions for assets to be held on trust  for the beneficiaries.  The role of executor is to generally deal with the deceased’s persons affairs, distributing assets, paying liabilities and so forth.

Can age limits be set on gifts in a will before they can be received ?

Yes, this is what Trustees are for – to see that the gifts you leave are preserved as best as possible until they should be given at the time you have specified.

What is Probate, or a Grant of probate ?

When people refer to probate they are typically referring to the entire process of managing a deceased’s persons estate, which broadly encompasses all of their outstanding liabilities, assets, and going concerns.  Generally, in order to deal with a deceased’s persons legal matters, a grant of probate is required, which is a form of court order stating that the executor(s) have power to deal with the deceased’s persons assets and liabilities and to administer the estate.

Typical examples of when a  grant of probate is needed are :-

  • The deceased has investments in their sole name such as Stocks, Shares or Insurance Policies. Financial institutions, banks, building societies typically holding such assets ask for a Grant of Probate to be produced before they will release funds.
  • The deceased owned Property in their sole name and a Transfer of Property is required or it is to be sold.

What will happen to the house I own with my wife on my death?

  • Where you and your partner have a joint legal interest in a property your share passes to them on your death. Where a property is owned by more than 2 owners, the death of one joint owner causes that share to pass equally to the remaining joint owners automatically (not withstanding what the Will says)
  • Joint assets are still subject to Inheritance Tax (IHT).

How do executors need to deal with any outstanding debts of the decaesed ?

  • All debts (including loans to family members) must be identified.
  • All creditors must be informed in writing of the following:-
    • Full details of the executor or administrator
    • when the Grant is expected to be issued
    • when repayment is expected to be made.

How are assets distributed distributed?

Once a Grant of Representation has been granted, all bank accounts have been closed, all property has been sold or transferred, all debts & taxes have been paid and Estate Accounts finalised, then the estate may be distributed to the Beneficiaries in accordance with the Will or intestacy rules (if there is no will in place). If any Beneficiary is an undischarged bankrupt it must be considered before funds are distributed to that beneficiary.

Does  Capital Gain Tax need to be paid for a  deceased person ?

There may be Capital Gains Tax arising during a person’s lifetime or the period of Administration of the estate.

What happens when probate has been granted?

Once the grant has been issued, the executor needs to contact all the companies and organisations that the deceased had dealings with  providing them with an official copy of the grant. At this point, bank accounts can be closed, investments cashed in and bills, funeral expenses and debts can be paid. Once all the assets are identified and all liabilities and any tax paid, the executors can pay any legacies specified in the Will

Does an executor need to keep accounts?

Yes. Before making payments to beneficiaries, there must be proper accounts, showing the figures at the date of death and all the payments and receipts since then. When these accounts have been approved, all the funds can be paid out and property can be transferred to the people entitled under the Will.

How long should probate take?

It is almost impossible to predict at the start of dealing with an estate how long it is going to take. Traditionally, people talk about the “executor’s year” as usually everything will be wound up within 12 months, although often it will take much less time than this. For estates where there is no inheritance tax to pay, we would suggest that 6 months would be the average timescale. For larger, more complicated estates it could be longer than this – in some extreme cases (usually involving complicated trusts or very valuable estates), it can take several years.

You might typically be ready to apply for the grant of probate (or letters of administration) after 6-8 weeks of starting to deal with the estate. When they receive your application for the grant, the Probate Registry usually send it out within 2 weeks.

If there is a house to be sold or a trust to be set up then the final stage of the administration of the estate could take several weeks or even months before all the funds can be distributed.

FURTHER HELP ?