At what cost an inheritance?

With the continual increase in property values more and more family inheritances are being delayed in Probate.

 

More importantly, because of the overall increase in joint estate values it is not uncommon for Probate to be needed on both first and second death and as a result the process is fast becoming a very expensive and time consuming issue for middle England – in some cases creating a large financial burden rather than leaving a simple bequest.

On death your liability to Inheritance Tax is calculated however the overall tax due may change between the date of death and Grant of Probate because assets may increase or decrease in value.

Your Personal Representatives (PRs), who are often your beneficiaries, are responsible for settling any IHT and possibility Capital Gains Tax before they can settle your estate and HMRC would expect them to consider all assets - including their own - as a potential source from which to pay the tax. 

Often PRs do not have sufficient personal funds to pay the tax, or unencumbered property against which to secure a probate loan which often causes anxiety, stress and lengthy delays.

As a result of being your beneficiary how much of an additional financial commitment might your PRs be inheriting alongside their bequest?

It is frequently said that people are remembered for what they left, rather than for what they did.

Probate, unlike other taxes, does not have a year of assessment but can carry a very big unintentional sting in its tail that can take years to resolve.

How would you like to be remembered?

Helen Wilson

Consultant

Telephone:  +44 (0)20 7893 3456

Email:  getintouch [@] broadstoneltd.co.uk

Would the right people inherit from your estate?



For the first time ever, the number of people living together in the UK exceeds the number of married couples; and around half the number of new-born children are born outside marriage.

 

This situation is giving rise to an increasing number of property disputes, particularly where one party dies without having made a will. It appears that many unmarried couples do not realise that the concept of “common law marriage” does not exist, and that their partners are not necessarily entitled to assets which they may currently share.

 

The situation becomes even more complicated in the case of older couples who are living together but have property or children from previous relationships.

 

The main problems result from intestacy and can be avoided by each party executing a will, and ensuring that this is kept up-to-date as circumstances change. Whilst there is the option of standard wills online, our experience has shown that in the majority of cases these are drafted in such a way that leave them open to challenge/interpretation, or worse, in a way that means the wrong people receive inheritances. 

 

We believe that the most effective solution in such cases is to combine the services of a solicitor (especially for larger estates where tax efficiency is all-important) with the services of an independent financial planner to ensure that your assets are managed in the best way while you are alive, and so that the right people benefit from hard earned money at the right time and in the most efficient manner from the perspective of mitigating inheritance tax.

 

Our Private Client Team have a wealth of experience in working in collaboration with your solicitor to ensure that all your affairs are arranged in such a way that there is minimal fuss in dealing with inheritances, and that as much money is passed to your beneficiaries in the way you would wish it to be.

 

Duncan Wilson

Private Client Partner

 

Telephone: +44 (0)20 7893 3456

Email:  getintouch [@] broadstoneltd.co.uk