Lessons from widow’s fight for digital memories

A judge this week ordered Apple to give a widow access to her late husband’s online accounts which contained thousands of treasured family photographs and videos.

Unfortunately, her husband had not made a Will, and without consent regarding access to the account, the tech giant said it would release the content only under a court order. It took the widow three years and thousands of pounds in her fight to access her husband’s Apple account. It would have cost a great deal more had the lawyers not offered to work for free.

The case highlights not just the importance of making a Will but of the need to make sure your loved ones are aware of how digital accounts might be accessed if you die. “In this digital age, online accounts should be considered in the same way as savings, house deeds and heirlooms,” said Karen Starkey, private client solicitor at KWW. 

When thinking about Wills and Lasting Powers of Attorney, everyone should consider preparing a list of their usernames and passwords for their online accounts. But a word of caution: Karen points out that the terms and conditions of most internet service providers (ISPs) prohibit the transmission of such information by the account holder, and they will want to see proof of authority (such as death certificate or grant of probate) before access is permitted.

While everyone will be keen to stop bills mounting up for a dead person’s online shopping, or on their electricity or gas accounts, which are often managed online, a delay in notifying the ISPs may be advisable to prevent an automatic shutdown and deletion of some online accounts.

Popular social media channels such as Facebook, Twitter and Instagram are hard to delete without the right access, and their continued presence could prove distressing to relatives and friends. “Most of us have so many online accounts and passwords it’s difficult to remember them all,” said Karen. “Write a dossier and keep it a secure place like a locked desk or safe. That way, you not only help yourself in a moment of forgetfulness but you spare family members a major hassle trying to unravel your digital life after you’ve gone.”

Karen recommends keeping separate dossiers of usernames, e-mail addresses and passwords which can be handed to executors or attorneys as part of that person’s estate. Passwords should not be included in the Will itself, because its contents are made public after it passes probate. 

The probate process and our role

This quick-reference table explains the role of your solicitor at each of the various stages of obtaining probate. We hope this helps you to understand the process and how our expert lawyers can support you at every step of the way.

You need to…Your solicitor will…
Register the death with the local
register office.


Obtain the death certificate from
the local register office and a few
certified copies.
Locate the Will if there is one
Instruct our probate solicitor to
handle the legal work.

Provide proof of your identity.

Provide the Will and copies of
the death certificate.





Verify your identity.

Explain the probate process to you
depending on whether there is a Will,
or, if not, how the intestacy rules
apply.
Identify the executor(s) appointed
in the Will. If there is no Will, we
identify the next of kin legally
entitled to administer the estate.
Provide contact details of all
known beneficiaries.

Identify the beneficiaries entitled
under the Will or the beneficiaries
entitled under the intestacy rules.
Provide:
* details of properties
* all bank and building society
account details
* share certificates
* investments
* premium bonds
* National Savings certificates
* life insurance policies
* pension and annuity details
* details of other assets of value,
eg: antiques, paintings,
jewellery and collectables

Provide details of any debts and
liabilities.

Provide details of any lifetime
gains made by the deceased
within the past seven years.
Identify whether we will apply for
a grant of probate or letters of
administration to deal with the
estate/grant.

Contact relevant establishments for
a final valuation of bank accounts,
shares, investments etc.

Obtain valuations of property and
any valuable items as at the date
of death.

Calculate an initial value of
all assets and liabilities.
Swear a legal oath or make a
statement of truth that the
information provided is true
and correct.




Calculate any inheritance tax due.

Complete appropriate HMRC tax
forms and pay inheritance tax.

Send the probate application with the
sworn oath or statement of truth and
probate fee to the probate registry.
Place statutory notices in the
London Gazette and local papers to
alert potential creditors of our
intention to distribute the estate to
the beneficiaries.
We will give you two copies of the
grant.

Send the grant to the financial
institutions and other asset holders
and request full payment to the
assets.

Place the money into a dedicated
executor’s bank account.

Settle outstanding estate expenses,
debts and liabilities, including any
final inheritance tax due.
Advise if varying any will save
inheritance tax or otherwise benefit
the beneficiaries.
Make a bankruptcy search of the
Land Charges Register against
beneficiaries.

If a beneficiary has been declared
bankrupt, we will contact the trustee
in bankruptcy about where the
beneficiary’s inheritance should be
paid into.
If there are no challenges to the
estate, we will distribute the net
estate to the beneficiaries entitled
under the Will or intestacy rules and
obtain receipt.

If any challenges to the Will are
expected, we will advise you on the
implications.
You will approve and sign off
the final estate accounts.
Complete and file all paperwork

Divorce: Sharing the pension pot

As part of any discussion regarding family finances following divorce, it is important to consider pensions. As David Anstee, KWW’s family law expert, explains, this is particularly so if – compared to your former spouse -you only have a very modest pension of your own or perhaps no pension at all.

“In many cases it may be possible to obtain a share of your former spouse’s pension pot in order to address any inequality in entitlement,” says David, “but it is important to seek legal advice early to determine whether an application to the court is appropriate and, if it is, to ensure any order made is fair.”

When can a pension be shared?

The court can make a pension sharing order where legal proceedings are issued to resolve the financial aspects of your divorce. For an order to be implemented, however, your divorce must have first been finalised; in other words, you must have received your decree absolute. Pension sharing orders cannot be made where you have chosen to officially separate from your former spouse but for personal reasons have decided not to formalise this through divorce.

Your solicitor will be able to help you assess the value of your former spouse’s pension to determine whether it is worth trying to obtain a share. They can also help you to assess a claim for entitlement made against your own pension.

How is a pension valued?

To determine how much a pension is worth, the court will require from the relevant pension company a basic valuation which gives a cash equivalent value for the retirement benefits. However, a cash equivalent valuation will not always be appropriate, for example with final salary pension schemes or pension policies taken out on behalf of public service workers, where a cash equivalent approach may not reflect the true value of the benefits available. Whatever valuation method is adopted, it is important to ensure the valuation obtained is up to date.

Factors to consider when pension sharing

The aim will be to try to make financial arrangements after divorce as fair as possible, taking into account the money available and the needs of you, your former spouse and any children who are still financially dependent. To arrive at a fair result, the court will consider the value of everything you and your former spouse own, or have the right to, and assess this against your respective needs and those of any dependent children, whose needs will take priority.  

Because the value locked up in a pension may not be readily available, particularly where you or your former spouse are some years away from retiring, it may be that a pension sharing order is not appropriate. This may be the case, for example, if what you and your children really need is immediate access to cash to enable you to buy a new house and to tide you over while you look for a job or retrain. In these circumstances it may be more appropriate to make an order giving you full or partial entitlement to the money raised from the sale of the family home, together with regular payments to help support you and your children.

Your solicitor will be able to help explain whether there is anything about your circumstances that make a pension sharing order appropriate where perhaps that may not initially appear to be the case. For example, if your former spouse has a personal pension and is approaching 55 years of age, it may be possible for them to access a lump sum from their pension and to pay this over to you, even though neither of you have yet reached retirement age. This, though, is not possible if you have a public-sector pension.

What paperwork will my solicitor need to see?

Every case is different and the paperwork your solicitor will need to see to advise you on your pension rights will depend on your circumstances.  However, as a minimum it would be helpful if at your first meeting you could hand over:

  • bank statements for all accounts you are named on for the past 12 months;
  • copies of all your credit card statements for the past 12 months;
  • details of all outstanding loans (including bank overdrafts) and the amount owed;
  • copies of your payslips for the past three months;
  • the latest P60 tax certificate given to you by your employer;
  • your last three years of accounts, if you are self-employed;
  • written confirmation of any benefits you receive, whether state benefits such as universal credit or benefits (other than salary) received from your employer;
  • a breakdown of all your income and outgoings; and
  • details of any pensions you have and an up-to-date cash equivalent valuation for each, which you can request from your pension provider and which will either be supplied free of charge or for a small fee.  

For a confidential discussion about pension sharing, or any other family law matter, please contact David Anstee via the Contact Form on our website www.kww.co.uk

Indemnity policies explained

If you’re selling a property, you may find the buyer’s solicitors and the mortgage lenders insist on an indemnity policy being in place before the sale can go ahead. If you’re buying a property, your conveyancing solicitor may advise that a policy should be purchased before you proceed. In this article, property specialist Eve Crampsie looks at the different types of indemnity insurance policies and what they do.

A Legal Indemnity Policy protects the buyer when a problem in the title of the property cannot be resolved. Under this policy, the insured party is indemnified by the insurer against any specified costs or losses which may occur in the future. The premium for a legal insurance policy needs to be paid only once and is usually transferred to successors in title.

Indemnity policies basically cover valuable losses of any property and legal costs. Indemnity insurance will cover most title defects as well as some other issues.

Common types of indemnity policies

1) Absence of Easement Indemnity Insurance

The Absence of Easement Indemnity Insurance is an insurance policy used when part of the property or private land abutting the property does not have the necessary legal rights over private land abutting the property so the purchaser cannot enjoy the rights necessary to occupy the land. An example might be where there are no rights of access to get to the property over private land abutting the property, or where services which are private or cross private land serve the property.

For at least 12 months before the policy is put on risk, the right must have been exercised unchallenged. It may also be necessary to obtain a statutory declaration from the seller confirming the position throughout their period of ownership. Once the policy is put on risk, any financial losses which occur during the time that the use of right was being challenged, the policy provides compensation.

2) Adverse Possession Indemnity Insurance

In some cases, the owner of the property may have claimed ownership of some land but they are unable to provide required evidence to Land Registry to prove they are true owners. Here, the owner will only have possessory title. This is called adverse possession. In such situations, it is necessary for anyone purchasing the land to have indemnity insurance. The insurance will cover financial losses suffered by the purchases if someone tries to claim the land.

3) Breach of Covenant Indemnity Insurance (Freehold)

In cases where there is a breach of covenant relating to a freehold title, indemnity insurance can be of great help if the breach is less than 20 years old. The Breach of Covenant Indemnity Insurance can be offered as an alternative so the beneficiary’s consent can be obtained. The cover will have a condition that the breach should at least be 12 months old and that the person obtaining the insurance knows of no attempt by the beneficiary of the covenant to take action.

4) Flying Freehold Indemnity Insurance

When a part of the freehold property overhangs that of a different freehold property, a flying freehold is said to occur. This usually happens when a property is divided into many freeholds.

5) Good Leasehold Title Indemnity Insurance

If the Land Registry doesn’t receive necessary proof of the superior title for a given property, a good leasehold title is usually used to register the property. The Good Leasehold Title Indemnity Insurance will offer compensation if the claim to the title is successfully challenged. For this policy, the cover will have the condition that no challenge should have been made when indemnity policy was taken out.

6) Lack of Planning Permission or Building Regulations Approval Indemnity Insurance

At places where property has been built, altered or extended without proper permissions and approvals, this insurance comes into effect. If the owner loses money because the local authorities took action on breach of regulations, the policy will cover it. This insurance is usually available only for work that was carried out at least 12 months ago.

7) Unknown Easements, Rights and Covenants Indemnity Insurance

This indemnity policy might be used where there are documents which are either known to affect the title to a property or which might affect the title but the documents themselves, or details of their contents, cannot be produced. These documents may also contain covenants or restrictions which are in conflict with the current use of the land. Even though an indemnity policy cannot prevent enforcement of covenants, it can provide financial compensation if any.

COMMON QUESTIONS

What is building regulations indemnity insurance?

You’re most likely to come across indemnity insurance for building regulations during a house sale or purchase.It’s a type of policy that’s sometimes recommended by conveyancing solicitors because work has been done to the property – an extension has been built, for example – but there’s a concern from the local authority over lack of evidence that building regulation consent was granted.

Indemnity insurance for planning permission is available too if you lack the documents to prove planning permission was granted.

Do you need a ‘lack of building regulations approval’ indemnity policy?

While the paperwork is being checked for the house sale, if there’s no completion certificate showing the appropriate building regulations process has been followed, an indemnity insurance policy is often requested by the buyers’ solicitors. The indemnity insurance is designed to protect the new homeowners (and subsequent owners) against legal action if the local authority serves a building regulation enforcement notice. Basically, the local authority can force the owner to alter or remove any work that doesn’t comply with building regulations. The insurance can cover the legal costs or fees associated with this.

In practice, building regulations indemnity insurance is very rarely claimed on, and some people question how useful it really is (it wouldn’t, for example, cover the cost of putting any work right). But many people agree to buy a policy so the house sale can progress.

Depending on the insurer, indemnity policies can be arranged through the post or online. KWW has an account with a selection of insurance companies. The cost or premiums for indemnity policies depend on the value of the property as well as the risk insured. Accordingly, the premiums are charged on a sliding scale, ranging from as little as £20 to as much as £300. KWW charges a fee to negotiate and put on risk an indemnity policy.

You need to be aware the legal indemnity insurance merely offers financial compensation. It does not cure the insured defect. It is also a condition for indemnity policies that their existence not be divulged to a third party.

Tax planning for your inheritance

Planning how to deal with your assets in a tax-efficient manner is an important but potentially complex task. An increasing number of estates will be liable to inheritance tax (IHT) on the owner’s death, so it is vital to consider how your Will can be drafted to reduce the amount of tax that will be taken from your estate after you die. You can also consider whether to make gifts during your lifetime to minimise your IHT liability but this raises other tax considerations. Karen Starkey, one of our specialist Wills, trusts and estate planning solicitors, explains what you need to think about when planning for your inheritance if you wish to minimise your tax bill.

Why should I think about tax now?
The IHT threshold for an individual is £325,000 (also known as the Nil-Rate Band), so if your estate is worth more than that on your death, the value of your estate in excess of £325,000 could be taxed at 40%. Many estates in our pricey part of the world here in Surrey and the south-east will exceed this threshold, particularly given the steep rise in property prices over recent years. 

How can my Will reduce IHT?
You can utilise various available tax reliefs and exemptions in your Will to reduce the tax bill on your death, including:

  • Spouses and civil partners: Gifts made to your spouse or civil partner are exempt from IHT, so the value of any property or share in a property left to your spouse or civil partner will not be taken into account for the purposes of IHT
  • The Transferable Nil-Rate Band: If you survive your spouse or civil partner, the basic threshold available for your estate can be increased by the percentage of the threshold unused when they died. For example, John died leaving an £600,000 estate. He left £130,000 to his son and John’s wife inherits the balance. Only £130,000 out of the £325,000 threshold was utilised, so the unused 60% (£130,000 is 40% of £325,000) is transferrable to the wife’s estate. On her death, her total IHT threshold will be £520,000 (£325,000 plus £195,000)
  • The Residential Nil-Rate Band: An additional allowance is available if you leave one residential property to your direct blood descendants, such as your natural children and grandchildren. This is currently £125,000 rising £25,000 each year to £175,000 in 2020/2021. If you own more than one residential property your executors will nominate which one will qualify
  • Charities: Gifts made under your will to UK charities and political parties are also exempt from IHT; and
  • Will trusts: A carefully structured will trust can protect an inheritance from tax charges. You can leave money or property on trust for your beneficiaries in accordance with your specified wishes, for example, to fund their university education or a deposit for a property.

How else can I reduce my tax liability?
If funds allow, consider making gifts during your lifetime to reduce the value of your estate and the potential IHT liability on death. You can make as many gifts of £250 to anyone you like without them being liable for IHT. You also have an annual exemption of £3,000, so you can give up to £3,000 to someone without incurring IHT (or £1,000 each to three people). You could also consider making a gift known as a ‘chargeable transfer’. Although IHT may be payable if you die within seven years of making the gift, the potential tax decreases each year until it falls outside of your estate after seven years. 

Further reliefs and exemptions may be available via business or agricultural property relief and shared property relief.

Are there other tax implications?
Tax planning for inheritance must include consideration of other taxes, notably capital gains tax (CGT) which can be a trap for the unwary. Importantly, CGT liability dies with the individual but it may arise if you make lifetime gifts.

A gift of property (other than your main home) or an expensive work of art could, for example, give rise to CGT on the increase in value since you acquired it. This means that while a lifetime gift would reduce your IHT liability on death, it could incur an immediate CGT bill when the gift is made. You need to carefully consider whether it makes more financial sense to make a lifetime gift and pay a CGT bill now, or deal with it in your will and save IHT on your death.

Finally, there may also be income tax considerations if you create a trust, as the income from a trust fund is liable to income tax.

This is a highly complex area of law, and to find out about how best to navigate the tax implications you should see a specialist solicitor who specialises in inheritance tax planning.

Help To Buy: Everything you need to know

The Help to Buy scheme was originally introduced in April 2013. Since then, it has helped nearly 170,000 households onto the property ladder. However, as with any such scheme, over time a few issues have started to emerge which buyers need to be aware of. Here, Sarah Trickey, our head of Residential Conveyancing, considers recent research about the Help to Buy scheme, its pros and cons, and what you should look out for.

How Help to Buy works
A Help to Buy equity loan from the Government could help you fund the purchase of your new home. To qualify for the current scheme, you do not need to be a first-time buyer. The home you are buying must be for your own use. It must be a new build and it must cost less than £600,000. You provide at least a 5% deposit, and the Government lends you up to 20% of the property’s value. The balance of the purchase price is then financed with a mortgage from an approved lender. Slightly different rules apply to properties in London.

You must repay the loan when you sell your home, or after 25 years if later. However, unlike a conventional mortgage, the amount you repay is not a fixed amount. Instead, it reflects the ratio of the loan to the value of the property when you first borrowed. So, if your Help to Buy loan was for 20% of the value of your home when you bought it, you must repay 20% of the price you sell it for.

For example, if you are buying a home for £200,000, you must provide at least a £10,000 deposit yourself. The Government will provide up to £40,000 by way of an equity loan, representing 20% of the property’s value, and you fund the balance of £150,000 with a mortgage. If in five years, you sell your home for £250,000, after repaying your mortgage, you are left with £100,000. However, you also have to repay your Help to Buy loan. Instead of repaying the original £40,000, you will have to repay £50,000. This represents 20% of the value of the property when you sell.

The loan is interest-free for the first five years, although there is a monthly management fee of £1. After five years, you pay an additional fee as interest of 1.75%, which will then rise annually by the Retail Price Index plus one per cent. 

Although the principle behind the scheme is very simple, the detail and processes involved can appear complicated. For example, you will need formal confirmation of your eligibility to proceed. Choosing a solicitor like KWW Solicitors which has lots of experience in these types of equity loan will help you avoid delays and potential pitfalls. 

Pros and cons
Almost £9 billion has been advanced under Help to Buy, and the Government considers it a great success. There are certainly several benefits to the scheme:

  • If you only have limited savings and a relatively small deposit, Help to Buy can make it easier to get a mortgage and to buy your own home
  • As you will be borrowing less of the property’s value from your mortgage lender, you may also be able to get a more competitive deal
  • The initial interest-free period can ease financial pressure in the early years of home ownership, when you most need help.

However, the scheme has its critics, and it is important to consider the possible disadvantages:

  • Help to Buy applies only to selected new build homes, which tend to sell for a premium over comparable pre-owned homes. In addition, recent research suggests first time buyers using Help to Buy pay on average 8% more than those buying new homes independently.
  • The amount you must repay depends on the value of your home when you come to sell. This could be good news if property prices go down but if prices go up then you may have to repay significantly more than you borrowed. This could mean having less cash to fund your next purchase.
  • After the initial interest-free period has expired, the cost of borrowing will increase. You may end up paying more than you would under a conventional mortgage. While remortgaging remains an option, you may find fewer lenders willing to provide finance if you are buying with a Help to Buy loan.

You should also be aware that the current Help to Buy scheme ends in March 2021. A replacement scheme will be limited to first time buyers and the properties they can buy will then be subject to regional caps.

Getting the right advice
Help to Buy is not right for everyone, and it is important you consider how suitable the scheme, and any particular property, is for you. Speak to your solicitor early on, as Help to Buy involves some additional steps in the conveyancing process and they can advise you on any risks.

Benefits of a clean-break agreement on divorce

You may feel overwhelmed with the changes you are facing as you go through a divorce, and quite often going from a household with two incomes to one can be a struggle. If you do not own a house or have other assets, it can be tempting to cut costs and ignore seeking advice from a solicitor in relation to a financial agreement. Our family law expert David Anstee explains why this could be a costly mistake.

“A divorce does not stop all financial obligations between spouses. I have met people who come into money years after a divorce, only to face an unexpected claim from their former spouse. You may be on amicable terms now but relations can sour over time, especially if one of you enters a new relationship or comes into new found wealth. You can prevent an unexpected claim at a later date by obtaining a financial agreement known as a clean break order.”

A clean break order is a financial settlement between you and your former spouse that has been approved by the court.  It will severe your financial ties and protect you from a claim over any future assets you acquire.

There are a number of legal cases that highlight the importance of obtaining a clean break order. One extreme example is the case of Nigel Page who won £56 million in the Euro Millions Lottery 10 years after he had divorced. At the time of his divorce he had relatively modest assets and did not obtain a clean break order. His former wife capitalised on this omission and negotiated a reported settlement of £2m.

Another example is the case of Dale Vance. In 2015, Kathleen Wyatt successfully argued she was entitled to apply for maintenance from him even though they had been divorced for more than 20 years. He had not obtained a clean break order at the time of divorce, leaving the door open for Kathleen to bring a claim later when her husband had built up a hugely successful business and had accumulated a vast wealth. 

While the chances may seem small that you will have the luck of a windfall to the extent of Nigel’s, you could still be at risk from losing your future pension provision, future inheritance or future earnings. Nigel and Dale could not have anticipated at the time of their divorce how costly their oversight would be.

David Anstee says: “Obtaining a clean break order is a small investment in time and money now to have that piece of mind for your future. It is a relatively straightforward process and normally does not involve you having to go to court.”

For a clean break order to be made, the court must be satisfied that each person entered the agreement in full knowledge of the other’s financial position. This means  both parties to the marriage must provide a full and frank disclosure of their assets and liabilities. David Anstee has a wealth of experience in clean break orders and can represent you throughout the process, advising you on the terms that should be included to ensure your future assets are fully protected.

This article is for general information only and does not constitute legal or professional advice. Please note the law may have changed since this article was published.


Controversy over new Probate fees schedule

From April 2019, some estates in England and Wales could be required to pay almost £6,000 for a service that currently costs less than 4% of that amount. This is because of a proposed change to the fees families must pay to administer the estate of someone who has died. This process, more generally referred to as probate, involves gathering the assets of the deceased, valuing the estate, paying any tax and bills, and distributing the estate according to the Will.

At the time of writing (Feb 2019), obtaining the document needed to carry out these tasks – called a grant of probate in England and Wales – costs £215, or £155 if you apply through a solicitor but there’s no fee if the estate is under £5,000. However, the Government has announced plans to restructure the way the fees work, which would see some estates paying significantly more than they do now.

What’s changing?
Instead of the current flat rate, the proposed system sets fees on a sliding scale based on the value of the estate, as shown in the following table:

Value of estate before inheritance tax Fee
Up to £50,000 or exempt from requiring a grant of probate £0
£50,000 – £300,000 £250
£300,000 – £500,000 £750
£500,000 – £1m £2,500
£1m – £1.6m £4,000
£1.6m – £2m £5,000
Above £2m £6,000
Source: Secondary Legislation Scrutiny Committee, 21/11/2018

This seems like a large increase to fees for larger estates but the costs are considerably lower than similar proposals put forward in 2017, which would have raised fees to as much as £20,000. The earlier proposals did not pass through Parliament before the General Election in June 2017, and were withdrawn as a result. The current version of the proposals, with lower fees, was then announced in 2018. It has been approved by the House of Lords and is now set to go before the House of Commons before potentially becoming law in April 2019.

Stealth tax or necessary reform?
The Government has said the banded structure is fairer than the current system, arguing that those who can afford to pay more should pay more. As the threshold at which no probate fees are due would be raised from £5,000 to £50,000, it also means an extra 25,000 households a year won’t have to pay any fees at all. The Government said the money raised by this change would provide funding for other parts of the courts and tribunals system, and “ensure an efficient and effective service”. However, as fees at the top end of the scale are much higher than the cost of funding the probate service, some have questioned whether this is an acceptable use of the Government’s powers to raise fees. This point was raised by a House of Lords committee in November 2018, which said “to charge a fee so far above the actual cost of the service arguably amounts to a stealth tax and, therefore, a misuse of the fee-levying power”.

The probate process explained
Karen Starkey
, private client solicitor at KWW, says that fees aside, probate can be a lengthy and often complicated process if you’re carrying it out alone. “If you’ve been named as the executor in someone’s Will, there are a number of stages to complete even before you apply for a grant of probate, and several more after you’ve obtained one,” said Karen. “Appointing a professional to act on your behalf can make this process easier and ensure it is completed accurately. If you’re dealing with a particularly complex estate, specialist expertise can save you a lot of money.”

Alternatively, if you choose to administer the estate yourself, you’ll need to carry out the following steps:

STEP ONE: Find out if probate is needed
Before you begin, make sure you’re clear on what you’re required to do. Not every estate has to go through the probate process, so this is the first thing to check. You may not need probate if the person who died only had savings or premium bonds, or if their property and money was all jointly owned – this will automatically pass to the surviving owners.

STEP TWO: Value the estate and report it to HMRC
One of the main duties of an executor is to work out and report the value of the estate. This can be a significant task but it’s important to complete it accurately to avoid facing a fine from HMRC. First, you’ll need to find out about the assets and debts the person had by contacting organisations such as banks, pension providers, utility companies, mortgage lenders and credit card provider. You’ll also need to know the value of the person’s home and possessions, as well as any life insurance payments and certain gifts they made in their lifetime. According to HMRC, valuing an estate usually takes between six and nine months for an individual to complete but it can take even longer if the estate is large or complicated.

STEP THREE: Apply for probate
Once you’ve estimated and reported the estate’s value to the Revenue, you can apply for probate. You can do this online if you’re the executor, and you have the original will and death certificate.

STEP FOUR: Pay inheritance tax
If inheritance tax is due on the estate, the forms relating to it need to be sent within a year of the person’s death, and you’ll need to pay all tax within six months of the death. You can request paying inheritance tax on certain assets in instalments but you must settle the bill in full once the asset in question is sold.  You can start paying this before you finish valuing the estate. It’s best to do this as soon as possible as HMRC will start charging you interest if you don’t pay by the deadline.

STEP FIVE: Collect the estate’s assets
To access financial assets of the person who has died, send a copy of the grant of probate to the organisations that hold them. You can ask for them to be transferred to an agreed executorship account.

STEP SIX: Pay off any debts
As well as any tax due, you’ll need to ensure any remaining debts are paid.To protect yourself from unclaimed debts arising later on, you can place a notice informing creditors of the death in The Gazette.

STEP SEVEN: Keep estate accounts
Throughout the process, keep a thorough record of the property, money and possessions owned by the person who has died and how they will be split. This must then be approved and signed by you and the main beneficiaries.

STEP EIGHT: Distribute the assets
Once all the debts and taxes have been paid, you can distribute the estate according to the person’s Will. It’s a good idea to obtain a signed receipt from each beneficiary of the estate when they receive their inheritance, to include in the estate accounts. Be aware that beneficiaries might have to pay income tax if they inherit assets that generate income for them, while the estate may also have to complete a trust and estate tax return to report any income it receives while it is being administered.

Changing a Will after someone has died

Sometimes the generosity of a friend or relative leaving you a gift in their Will can backfire if it turns out your estate will need to pay tax on it or if there is a chance it could be swallowed up in future care costs or in satisfying some other type of claim. It may also be the case that a Will prepared many years ago does not take advantage of new tax allowances on death, such as that which now applies when you leave a share of your home to your children or other descendants. To cater for these sorts of situations it may be possible for the provisions of a Will to be varied to better suit your needs or to ensure tax efficiency where possible.

Karen Starkey, Wills and probate lawyer with KWW Solicitors, explains: “If you have been left a gift in someone’s Will and you are worried that as a result the value of your own assets when you die may be pushed above the rate at which inheritance tax becomes payable, then it is a good idea to talk to a solicitor about the possibility of varying the Will to divert your inheritance to someone else.

“It is also advisable to seek advice if you are starting a new relationship and are anxious to protect your inheritance in case the relationship breaks down, or if you and others named in the will are keen to make provision for people not currently provided for, such as grandchildren of the deceased who were born after the will was prepared.”

How can a Will be varied? 
To bring about some changes, such as to benefit someone who is not currently named in the Will, you can simply give away some of your inheritance. However, before doing this you will need to consider whether there could be any adverse tax consequences, such as liability for inheritance tax arising under the potentially exempt transfer rules if you die within seven years of the gift being made. The other option to effect a change is via a formal legal document, known as a deed of variation. Which option is right for you will depend on the circumstances but there are formalities that need to be complied with for a deed of variation to be effective. To avoid any adverse inheritance or capital gains tax implications, a variation Will need to: 

  • Be made within two years of the deceased person’s death
  • Be recorded in writing
  • Make it clear how the Will is being varied, ie the nature of the gift you are foregoing and who you are passing it on to
  • Be signed by you, as the original beneficiary 
  • Not involve any reward from your point of you, ie not be made in return for you receiving some other benefit in lieu of you giving up some of your inheritance. 

It is important to take legal advice to ensure all formalities are complied with, particularly where the variation is to be made by deed given that arrangements cannot subsequently be changed. 

Who can make a variation? 
It is possible for anyone who stands to benefit under the terms of a Will to seek a variation. It is also possible in some situations for the executors or personal representatives of the deceased person to suggest a variation is made. There are additional requirements where the variation being considered will increase the estate’s tax liability or where beneficiaries under the age of 18 will be affected. 

What about intestate estates? 
If you stand to inherit under the intestacy rules because your relative failed to make a Will, then it is still possible for you to make a deed of variation to give away some or all of your inheritance to someone else. 

If you have received an inheritance which you are not sure you want to accept, or if you have some other reason for wanting to vary the terms of a will or the rules of intestacy, please contact Karen Starkey for advice on your options.

Can I just refuse to accept my inheritance?
Whether you have been left an inheritance through a Will or the rules of intestacy you are entitled to decline to accept it but if you do this you will have no right to then dictate who should benefit instead. If you are uncomfortable about this then it might not be the way to proceed. 

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice.The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.