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Probate - Sanity Check

including wills and probate
neversay
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Probate - Sanity Check

#192386

Postby neversay » January 10th, 2019, 1:38 pm

My father passed away in December and left his estate to my mother who along with my brother and I are executors. Looking at the probate paperwork it seems relatively straightforward; his assets come to below £250k which includes his half of the property (joint tenants), savings/ISAs, bonds, current accounts and chattels. Once all the exact valuations are in, I expect to just fill in the forms but would be grateful for a sanity check on anything I may be missing...

- Is there anything else I need to consider? (e.g. transfer of his IHT allowance to my mother?) (their combined estate still comes well below the joint threshold).

- Am I ok to just go ahead and remove his name on the deeds with Land Registry?

- Given his estate is well below the IHT threshold, is a Zoopla property valuation enough or do we still need to get formal estate agent valuations?

- As of right now, should we be doing anything else finacially for the long term? (e.g. small annual gifts to limit future care liabilities, etc.)

My brother and I are seeking LPA for health and finance to be prepared for the future and take the pressure of managing the home off her hands. She will have pension income and adequate savings so she won't struggle.

N.

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Re: Probate - Sanity Check

#192394

Postby Lootman » January 10th, 2019, 1:53 pm

Are you sure you even need probate? If his assets were held jointly with your mother then there may not be any need for a grant of probate. And inheritance tax isn't usually an issue upon the first death of a married couple even if the value exceeds the nil-rate band.

I'd be very tempted to not bother with all the fuss of probate in a very straightforward case like this.

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Re: Probate - Sanity Check

#192419

Postby staffordian » January 10th, 2019, 2:34 pm

Lootman wrote:Are you sure you even need probate? If his assets were held jointly with your mother then there may not be any need for a grant of probate. And inheritance tax isn't usually an issue upon the first death of a married couple even if the value exceeds the nil-rate band.

I'd be very tempted to not bother with all the fuss of probate in a very straightforward case like this.


The ISAs if nothing else might preclude this approach as they clearly won't be in joint names.

I realise that many institutions will release relatively small sums on sight of the will and relevent identification, but if the ISA(s) are of any size, I doubt this approach will work.

neversay
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Re: Probate - Sanity Check

#192424

Postby neversay » January 10th, 2019, 2:48 pm

Lootman wrote:Are you sure you even need probate? If his assets were held jointly with your mother then there may not be any need for a grant of probate. And inheritance tax isn't usually an issue upon the first death of a married couple even if the value exceeds the nil-rate band.

I'd be very tempted to not bother with all the fuss of probate in a very straightforward case like this.


Thanks @lootman. I was wondering the same. He had about £80k of the assets like cash and share ISAs in his own name though. Hargreaves Lansdown and his building society seem to be requesting it too. As I read it, that means (even with a will) we need probate... or am I wrong?

Thanks,

N.

NB I see that there's nothing to do in regards to transferring IHT allowance, so that question is crossed off my list.

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Re: Probate - Sanity Check

#192433

Postby staffordian » January 10th, 2019, 3:23 pm

From my recent (but limited) experience, Lloyds were happy to release c£15k without probate but I think this was pretty close to their limit.

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Re: Probate - Sanity Check

#192435

Postby Clitheroekid » January 10th, 2019, 3:25 pm

neversay wrote:- Is there anything else I need to consider? (e.g. transfer of his IHT allowance to my mother?) (their combined estate still comes well below the joint threshold).

As you've already discovered, this happens automatically. One thing you might consider is just to have one of you act as executor. In a simple estate there's usually no need for more than one acting executor, and it saves the hassle of having to get three signatures on documents.

- Am I ok to just go ahead and remove his name on the deeds with Land Registry?

Yes, the acting executor just needs to fill in a DJP form - https://assets.publishing.service.gov.u ... 05-25_.pdf

- Given his estate is well below the IHT threshold, is a Zoopla property valuation enough or do we still need to get formal estate agent valuations?/

A Zoopla valuation is fine.

- As of right now, should we be doing anything else financially for the long term? (e.g. small annual gifts to limit future care liabilities, etc.)

Firstly, make Wills (and LPA's are also a good idea) if you haven't already done so. Trying to avoid liability for care home fees is a highly contentious subject, but bear in mind that if you get yourself into a position where you're reliant on the state to provide care you have to take whatever you're given, and some care homes that rely on state funded residents are pretty grim. One would hope that your children (if you have any) would help pay for a better standard of care in gratitude for the lifetime gifts they've received from you, but in my experience this is not at all a safe assumption!

Are you sure you even need probate? If his assets were held jointly with your mother then there may not be any need for a grant of probate. And inheritance tax isn't usually an issue upon the first death of a married couple even if the value exceeds the nil-rate band.

I'd be very tempted to not bother with all the fuss of probate in a very straightforward case like this.

This is perfectly viable where the assets are only small (by which I mean around £10k-20k or so per asset). Most financial institutions will release the asset without probate subject to a maximum value (which varies) and provided the recipient signs an indemnity form. However, if even one asset is above their threshold you will need probate.

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Re: Probate - Sanity Check

#192450

Postby PinkDalek » January 10th, 2019, 4:00 pm

neversay wrote:My father passed away in December ...


Condolences. I hope your break in London (as reported elsewhere) was of some comfort.

Clitheroekid wrote:
neversay wrote:- Is there anything else I need to consider? (e.g. transfer of his IHT allowance to my mother?) (their combined estate still comes well below the joint threshold).

As you've already discovered, this happens automatically.


I'm unsure what is meant by this happens automatically. Maybe I've misunderstood.

This (current) form may need to be completed on the second death:

Claim to transfer unused nil rate band Schedule IHT402
https://assets.publishing.service.gov.u ... IHT402.pdf

Isn't it therefore advisable to keep good records of what happens to the late Father's Estate, such that the percentage of the late Father's unused nil rate band (ignoring any Unused additional threshold as, from the figures presented, this is unlikely to be of relevance) is known for the future and the relevant documents will be available for the Mother's Executors for when they make the claim?

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Re: Probate - Sanity Check

#192494

Postby neversay » January 10th, 2019, 5:10 pm

@Clitheroekid - many thanks for your helpful answers. I have been doing the reading/research but having this reassurance is very comforting.

@PinkDalek - thanks for your comment and kind wishes. Yes, I didn't mention in the London thread but this is the reason December was awful. To be honest, before the London break it felt like a burden (all I wanted to do was rest at home) but, in the end, it actually did me a power of good.

I'm very grateful to you both (and to @Lootman, @staffordian) and all the humble heroes here in LF for your wonderful support.

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Re: Probate - Sanity Check

#192520

Postby Raptor » January 10th, 2019, 6:32 pm

Just a thought. Last week I attended an Uncle's funeral and my aunt reminded me that I was the Executor of the will.Thought that after 18 years they would have had another one written, anyway, on checking there did not seem to be any reasons to do probate. She had already got her bank and savings accounts changed into single name with the "death" certificate and "will" along with all the utilities. The house was "joint" so no problem there. There was nothing in his name, everything was joint. Her son wanted to involve a "lawyer" friend, but then again that was the reason why he was not the executor of the estate.

I would contact the companies where he had accounts in his name and see what they require just in case they do not need probate documents.

Raptor.

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Re: Probate - Sanity Check

#192535

Postby neversay » January 10th, 2019, 7:46 pm

Raptor wrote:Just a thought. Last week I attended an Uncle's funeral and my aunt reminded me that I was the Executor of the will. Thought that after 18 years they would have had another one written, anyway, on checking there did not seem to be any reasons to do probate. She had already got her bank and savings accounts changed into single name with the "death" certificate and "will" along with all the utilities. The house was "joint" so no problem there. There was nothing in his name, everything was joint. Her son wanted to involve a "lawyer" friend, but then again that was the reason why he was not the executor of the estate.

I would contact the companies where he had accounts in his name and see what they require just in case they do not need probate documents.

Raptor.


Thanks @Raptor. Sadly it seems probate is triggered with Hargreaves Lansdown, NS&I Premium Bonds and their building society. It's good for others to know though and merging or transferring accounts 'ahead of time' is a sensible idea.

The whole 'end of life' experience has made me think about tidying up my financial affairs to make life easy for my family when I go*. Likewise I must start on that Swedish Death Cleaning to reduce the amount of physical (and virtual) junk I have accumulated.

N.

(*I'm in my early 40s so hopefully no time soon!)

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Re: Probate - Sanity Check

#192571

Postby Clitheroekid » January 10th, 2019, 9:16 pm

PinkDalek wrote:
Clitheroekid wrote:
neversay wrote:- Is there anything else I need to consider? (e.g. transfer of his IHT allowance to my mother?) (their combined estate still comes well below the joint threshold).

As you've already discovered, this happens automatically.


I'm unsure what is meant by this happens automatically. Maybe I've misunderstood.

Perhaps I didn't express myself clearly. When I said the nil rate band allowance is transferred to the surviving spouse `automatically' I meant that the executor of an estate doesn't need to take any action to transfer it. The question of its transfer is dealt with on the second death.

Isn't it therefore advisable to keep good records of what happens to the late Father's Estate, such that the percentage of the late Father's unused nil rate band (ignoring any Unused additional threshold as, from the figures presented, this is unlikely to be of relevance) is known for the future and the relevant documents will be available for the Mother's Executors for when they make the claim?

The only time this would be advisable is if the estate was being left to anyone apart from the surviving spouse. In the large majority of cases (and in this case) the whole of the spouse's estate goes to the surviving spouse, so there's no need to keep details of the figures involved.

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Re: Probate - Sanity Check

#192598

Postby PinkDalek » January 10th, 2019, 11:51 pm

I wasn’t talking merely about “details of figures”, having mentioned documents.

From the IHT 402:

Where most or all of an estate passes to someone’s surviving spouse or civil partner, those assets are generally exempt from Inheritance Tax. This means that most or all of the nil rate band available on the first death is not used. ... Since the transfer does not happen automatically, you must fill in this form and make a claim to transfer it. The claim must be made when the second spouse or civil partner dies.

My limited experience is it is a good idea to record whatever will be needed in advance. In that way future legal fees may be reduced, of which I know you’d approve.

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Re: Probate - Sanity Check

#192700

Postby Tempi » January 11th, 2019, 12:07 pm

PinkDalek wrote:My limited experience is it is a good idea to record whatever will be needed in advance. In that way future legal fees may be reduced, of which I know you’d approve.


Being prepared is never wasted time, but I think in the instance where the whole estate passes to the surviving spouse, there is no need to record any values at the time of the first to die. On second death, the first (fully) unused nil rate band is then claimed, to be set against the subsequent values in the estate on second death, along with that person's own nil rate band.

It is my understanding that at this point in time, the 'first death' value of any inherited assets have no bearing on the tax due on second death, after the application of the combined nil rate bands.

It is only, as Clitheroekid mentions, if the nil rate band on first death gets partially used by a gift to a non- exempt beneficiary, do you have to record the value of the gift, so that the balance of the first nil rate band gets claimed on second death.

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Re: Probate - Sanity Check

#192747

Postby PinkDalek » January 11th, 2019, 2:31 pm

Tempi wrote:
PinkDalek wrote:My limited experience is it is a good idea to record whatever will be needed in advance. In that way future legal fees may be reduced, of which I know you’d approve.


Being prepared is never wasted time, but I think in the instance where the whole estate passes to the surviving spouse, there is no need to record any values at the time of the first to die. ...

I'm struggling to make my point and initially I was talking more generally about the need to claim.

I am not talking specifically about the claim for a full unused nil rate band being anything other than 100%, although we have insufficient detail to conclude that it will be 100% unused. There may have been some failed Pets or other gifts/chargeable transfers, Gifts with Reservation or they may even enter into a Deed of Variation but, I agree, it is unlikely from what we've been told so far.

The point I am trying to make is, for instance, the IHT402 asks for "Documents to be sent with this form".
See top right https://assets.publishing.service.gov.u ... IHT402.pdf

There is other information that could probably be collated in the next few months, rather than in (hopefully) what may be many years' time.

Anyway, that's what we did and enabled us to give a complete pack to the solicitors on the second death (although in our case it was nowhere near a full 100%).


On second death, the first (fully) unused nil rate band is then claimed ... so that the balance of the first nil rate band gets claimed on second death.

If I may and to be clear, it is not the balance in monetary terms. You use the percentage unused and apply that to the then existing IHT nil rate band on the second death.

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Re: Probate - Sanity Check

#192761

Postby Jabd2001 » January 11th, 2019, 3:03 pm

I have just dealt with a second parental death, 12 years after the first. I was surprised at the information I was asked for in relation to the first death - probate certificate, death certificate, marriage certificate, but also details of the values of property etc disposed of after the first death, in order to establish how much nil rate band could be transferred.
So yes, keep records. I had kind of assumed that my mother’s death was done and dusted, but not at all.

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Re: Probate - Sanity Check

#193225

Postby Pipsmum » January 13th, 2019, 1:57 pm

Sorry for your dear losses to everyone here. Loss is hard enough to deal with anyway, let alone then have paperwork problems to solve whilst grieving.

I am helping both aging parents at the moment and have POA of both health and financial activated for my mother who has advanced parkinsons. It strikes me that this forum, and particularly this thread, is very helpful for any little nuggets of experience and resulting wisdom relating to the financial protection of our families.

It is difficult to watch our parents careful plans for their futures dissolve because the ability to administer financial matters gets increasingly diminished with dementia. My dad for instance, sees money matters as a mans private responsibility to look after his family. He has never seen fit to discuss money matters with my mother much, and so doesn't see it as appropriate to discuss such things now with my sister and I. He still just about manages everything himself, but he won't be able to for much longer at his current rate of forgetfulness. We are finding it difficult to help him without wanting to seem to be interfering in such 'man matters' nor stripping him of his pride. Both of us are honest and trustworthy luckily, and don't keep any secrets from each other.

We barely have a clue what either parent has or doesn't have, nor with whom. It is a bit like a Sherlock Holmes game trying to find out what is where and belonging to whom, when neither of them can either remember, nor perhaps want to share, that information. We are about to need to know everything presumably, for all the health questionnaires we will have to fill in for their future care assessments.

It is very helpful to be prepared for problems you didn't even know existed before you get landed in them. Please do post any advice and experienced wisdom here for the likes of me who has yet to go through it all.

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Re: Probate - Sanity Check

#193230

Postby Raptor » January 13th, 2019, 2:27 pm

I had LPOA for finances on my Mum, it was only when she started having problems with her cards that I got involved. Taking control of her bank etc. She was diagnosed with early stage dementia but we managed the finances side, but the experience of this and the probate opened my eyes.
Every year I write a detailed letter to my daughter, highlighting all my accounts and my portfolio, with advice with what to do. I also "run" a hyp for her but she has no time, at the moment, to get more involved, although she is interested in how it is going, dripping money in from time to time.
I am also in the process of setting up LPOAs (both sent off to the guardians office, just waiting for them to finish them off).
As this is my 65th year, have decided to sit down with her and actually go through everything with her. I look back at when my dad died with no will and how long it took for probate, fortunately it was not hard,. My mums probate was complicated as although we had a copy of the will, my sister had managed to lose the original and there was a lot more to sort out.
The board on TMF helped along the way so hope this can help others.

Raptor.

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Re: Probate - Sanity Check

#193291

Postby Pipsmum » January 13th, 2019, 7:31 pm

neversay wrote:- As of right now, should we be doing anything else finacially for the long term? (e.g. small annual gifts to limit future care liabilities, etc.)


My brother in law is a tax accountant. He said (if I remember it correctly) that gifts can be £250 a year as personal gifts per person/child and a one off wedding present of £3k. Paying towards student costs is allowable (need to double check what type). I haven't looked into anything else yet, nor double checked what he said, nor looked at where these sorts of gifts could be put. My sister and I were looking at ways these could be perhaps unmentioned and totally governed by ourselves, so they could remain as potentially returnable gifts in the remote case that mum needed it back for any reason but remain as legacy gifts if she didn't. We're also at the beginning of this rather strange journey so any advice is welcome.

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Re: Probate - Sanity Check

#193304

Postby Lootman » January 13th, 2019, 9:18 pm

Pipsmum wrote:
neversay wrote:As of right now, should we be doing anything else finacially for the long term? (e.g. small annual gifts to limit future care liabilities, etc.)

My brother in law is a tax accountant. He said (if I remember it correctly) that gifts can be £250 a year as personal gifts per person/child and a one off wedding present of £3k. Paying towards student costs is allowable (need to double check what type). I haven't looked into anything else yet, nor double checked what he said, nor looked at where these sorts of gifts could be put.

The rules about the amounts of gifts that can given do exist. However to my knowledge those rules are about implications for inheritance tax and not eligibility for a local council to cover care costs. The tax rules are as follows:

You can give away £3,000 worth of gifts each tax year (6 April to 5 April) without them being added to the value of your estate. This is known as your ‘annual exemption’. You can carry any unused annual exemption forward to the next year - but only for one year. Each tax year, you can also give away:

Wedding or civil ceremony gifts of up to £1,000 per person (£2,500 for a grandchild or great-grandchild, £5,000 for a child)
normal gifts out of your income, for example Christmas or birthday presents - you must be able to maintain your standard of living after making the gift

Payments to help with another person’s living costs, such as an elderly relative or a child under 18

Gifts to charities and political parties

You can use more than one of these exemptions on the same person - for example, you could give your grandchild gifts for her birthday and wedding in the same tax year.

Small gifts up to £250: You can give as many gifts of up to £250 per person as you want during the tax year as long as you have not used another exemption on the same person.

https://www.gov.uk/inheritance-tax/gifts

What I don't know is if local authorities use similar numbers when attempting to determine if the care-receiver deliberately deprived themselves of assets that could otherwise have paid for their own care. Such a determination could lead to an application to have care home fees paid by the LA to be denied.

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Re: Probate - Sanity Check

#193315

Postby yorkshirelad1 » January 13th, 2019, 10:34 pm

Jabd2001 wrote:I have just dealt with a second parental death, 12 years after the first. I was surprised at the information I was asked for in relation to the first death - probate certificate, death certificate, marriage certificate, but also details of the values of property etc disposed of after the first death, in order to establish how much nil rate band could be transferred.
So yes, keep records. I had kind of assumed that my mother’s death was done and dusted, but not at all.


IANAL, but I believe there is a requirement for keep your own tax records for 7 years, and for an estate it's 12 years....


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