Probate requirements re jointly held property

[richfool]

Could anyone clarify the situation/my understanding re the following:

Am I right in thinking:

1. Where a property is held by two people as joint tenants, that upon first death, probate is not required, as the property simply passes to the survivor? Though presumably someone (such as the Executor) will need need to notify the land registry, as title will need to be amended?

2. However, if the property is held jointly, by husband and wife, as tenants in common (50% each), then upon first death, would 50% of the property's value need to be declared for probate purposes? And what would need to happen in terms of the land registry, would there need to be a conveyancing transaction?

An additional question, in the above scenarios, IF a solicitor was assisting the Executor and was charging fees based on a percentage of the value of the estate, would I be right in thinking that the value of the property would not be counted in the fee calculation in the first case/scenario? But in the second case, the fee calculation would likely include the 50% value of the property figure?

[Clitheroekid]

Could anyone clarify the situation/my understanding re the following:

Am I right in thinking:

1. Where a property is held by two people as joint tenants, that upon first death, probate is not required, as the property simply passes to the survivor? Though presumably someone (such as the Executor) will need need to notify the land registry, as title will need to be amended?

Correct. Probate is not required (at least not for this asset) and the surviving owner can notify LR by using form DJP - https://www.gov.uk/government/publicati ... rietor-djp

2. However, if the property is held jointly, by husband and wife, as tenants in common (50% each), then upon first death, would 50% of the property's value need to be declared for probate purposes? And what would need to happen in terms of the land registry, would there need to be a conveyancing transaction?

50% of the value needs to be declared for inheritance tax purposes whether the property was held as joint tenants or tenants-in-common, though if the estate (including the share in the house) is being left to the surviving spouse there would be no IHT to pay.

If there are no other assets of significant value, and the share in the house is left to the surviving spouse it may be possible to avoid applying for probate, as the property can still be sold without probate. However, if the share is left to someone else probate would be needed, and there would also have to be an `assent', so that the property would be transferred into the names of the surviving spouse and whoever inherited the share. This would involve having to re-register the title to the property at LR.

An additional question, in the above scenarios, IF a solicitor was assisting the Executor and was charging fees based on a percentage of the value of the estate, would I be right in thinking that the value of the property would not be counted in the fee calculation in the first case/scenario? But in the second case, the fee calculation would likely include the 50% value of the property figure?

The first thing to say is that these days solicitors should not be charging a percentage of the value of the estate if it results in a significantly higher bill. Although the value of the estate is a factor that can be taken into account when assessing the charges a mechanical percentage is hardly ever appropriate, and can often lead to an extortionate charge, particularly when, as is often the case, it's charged on top of an hourly rate.

If the solicitor has nevertheless managed to con the executors into paying a value charge then whether or not it should be applied to the share in the house would depend on the terms of the individual agreement.

[richfool]

Thank you for that clarification, Clitheroekid.

It would be my aim to, if possible, have my wife negotiate a flat fee for whatever work the solicitor does to assist her in dealing with my estate.

It's a shame that holding one's property as joint tenants (and savings accounts in joint names) will obviate the need for probate, but then as ISA's have to be in one's sole name, one has to go through probate to deal with them.

[DrFfybes]

Thank you for that clarification, Clitheroekid.

It would be my aim to, if possible, have my wife negotiate a flat fee for whatever work the solicitor does to assist her in dealing with my estate.

May I suggest a fewf things here....
1) make sure you both have an up to date list of all your assets, account numbers, approx value, etc. The solicitor will use this info to work out their fee, and if you have everything up front it saves them a LOT of work.
2) Simplify your assets as much as possible, no point in having 10 accounts with £1000 in each when the sols will charge £50/account to collect the moneys.
3) talk to a couple of local firms beforehand and find ones with a good Wills and Probate section and ask for rough prices if they were to act now.

and 4), when it comes to it you still need to check their workings, especially if there is IHT to pay and the value of investments fall between death and encashment.

Paul

[Lootman]

1) make sure you both have an up to date list of all your assets, account numbers, approx value, etc. The solicitor will use this info to work out their fee, and if you have everything up front it saves them a LOT of work.

2) Simplify your assets as much as possible, no point in having 10 accounts with £1000 in each when the sols will charge £50/account to collect the moneys.

3) talk to a couple of local firms beforehand and find ones with a good Wills and Probate section and ask for rough prices if they were to act now and

4), when it comes to it you still need to check their workings, especially if there is IHT to pay and the value of investments fall between death and encashment.

I agree with all that. Although if I am doing (1) and (4) myself anyway then I am probably not going to use a solicitor at all, since those are typically the most work. And I can discover and document the assets better and quicker than anyone not familiar with the estate anyway.

[scrumpyjack]

I got the solicitor to quote me an up front fixed fee on the basis that I would provide all the information, they would fill in the IHT forms and obtain probate and I would take it from there. It worked very well. The fee was £1,950 plus VAT on an estate of £2.5 m.

[richfool]

Points noted re solicitors fees and record keeping, thanks.

I do have a proforma listing my key accounts, though it quickly gets out of date, partly because I tend to open new fixed rate savings accounts at regular intervals. Yes, I must reduce the number of accounts I hold with different organisations to make that easier. Things that may be more difficult for my wife to deal with, could be accounts with the likes of Wise, and online savings accounts.

Also, I think my wife will need some help explaining and dealing with the transfer of my ISA allowance to her.

I believe some savings organisations will allow smaller balance accounts to be dealt with (withdrawn and distributed), without the need to produce probate, even when probate is being obtained for other purposes.

[Lootman]

I do have a proforma listing my key accounts, though it quickly gets out of date, partly because I tend to open new fixed rate savings accounts at regular intervals. Yes, I must reduce the number of accounts I hold with different organisations to make that easier. Things that may be more difficult for my wife to deal with, could be accounts with the likes of Wise, and online savings accounts.

Also, I think my wife will need some help explaining and dealing with the transfer of my ISA allowance to her.

Could some of those accounts be converted to joint accounts, in the same way that your property is? Then there would be no need for probate on those accounts, which would pass seamlessly to your wife immediately upon your demise. (And no IHT issue there of course). You might want notes of PINs and passwords, and your phone may need to be available for 2FA.

I have also simplified my accounts and wherever possible have converted them to joint accounts. The only slight drawback is that you would both be liable for any income tax or CGT due annually.

That won't solve the ISA issue however, since they cannot be held jointly. Nor premium bonds, but most other types of non-pension accounts can be held jointly.

[richfool]

I do have a proforma listing my key accounts, though it quickly gets out of date, partly because I tend to open new fixed rate savings accounts at regular intervals. Yes, I must reduce the number of accounts I hold with different organisations to make that easier. Things that may be more difficult for my wife to deal with, could be accounts with the likes of Wise, and online savings accounts.

Also, I think my wife will need some help explaining and dealing with the transfer of my ISA allowance to her.

Could some of those accounts be converted to joint accounts, in the same way that your property is? Then there would be no need for probate on those accounts, which would pass seamlessly to your wife immediately upon your demise. (And no IHT issue there of course). You might want notes of PINs and passwords, and your phone may need to be available for 2FA.

I have also simplified my accounts and wherever possible have converted them to joint accounts. The only slight drawback is that you would both be liable for any income tax or CGT due annually.

That won't solve the ISA issue however, since they cannot be held jointly. Nor premium bonds, but most other types of non-pension accounts can be held jointly.

Re your first paragraph, yes some of those accounts are joint accounts (which has been and is my preferred route). We have online savings accounts with Marcus, but they make life difficult by only allowing you to have one of each type of account. So for example, once we had opened a joint fixed term account and a joint instant access account, they won't allow you to open another of those. Thus we both moved to opening another one (fixed rate/term account) in our sole names. My wife doesn't want us to have many accounts with many organisations, (to keep things simpler for her when I'm gone), so that has restricted us from opening more with other savings institutions, apart from our main bank, which doesn't offer such attractive interest rates. Obviously one can add more to instant access joint accounts, but we have been trying to capitalise on and lock in the improved interest rates on fixed rate accounts. Yes, ISA's give the protection from tax on the interest, but have to be in one's sole name.