Private Client Private Client
At Protopapas LLP our team is able to offer expert advice, guidance and understanding towards individual private client issues and matters relating Wills, Probate & Administration of Estates along with Estate & Tax Planning matters.
It is often a daunting task to consider and deal with private client matters, such as the preparation of Wills, Probate & Administration of estates and especially when you are dealing with the passing of a loved one. We realise and appreciate that certain matters can amount to the most stressful and important experience in one’s life. Our approachable and experienced team is on hand to offer our clients a compassionate and comforting approach to all private client matters so as to ensure our clients are as comfortable and secure as possible.
- HOW CAN WE HELP YOU?
We can advise you on:
- Making a will
- Mutual or mirror wills
- Executing wills and codicils
- Tax planning
- WHAT IS A WILL?
A will is a formal document which sets out your specific wishes as to how your property and assets are distributed upon death. When a man makes a will, he is known as the ‘Testator’ and a woman, the ‘Testatrix’. Making a will can save your family time, grief and money and also provide you with peace of mind that your affairs will be dealt with according to your wishes following your passing. The most common type of will is called a self-proving or testamentary will. This is a document which is formally prepared and signed in the presence of witnesses; this is quite important and many a will has failed because the correct signing procedure had not been followed. The absence of a will often results in bitter family squabbles and increased inheritance tax liability.
- A Will Must be Valid
In order to be legally valid, a will must be made voluntarily in writing by someone aged 18 or over and who is of sound mind. It must be signed in the presence of two witnesses, who must also sign the document in the presence of the testator. The witnesses should not be members of your family and they and their spouses cannot be people who benefit under the will. The witnesses should be aged 18 or over and should be people who you believe could give evidence about witnessing the execution of the will if asked in future (although this rarely happens). In addition, the witnesses should not be the executors or trustees of the will.
- Simple or Complicated?
Most people like to keep their will as simple as possible and normally leave most of their property and assets to one or two people; their spouse / civil partner or children. Having said this, it is not uncommon for people to go into great depth in their will leaving specific items to specific people. In many cases, making a will is straightforward. However, there are a number of areas of potential confusion where taking legal advice can prevent future potential problems. For example, things to take into consideration include whether you own a business or share property with someone you are not married to, or have been married more than once and have children with different partners.
- When to Update a Will
It is a good idea to update your will every five years or so, or whenever circumstances in your life change, such as you divorce or if one of the beneficiaries of your will dies. It is also essential to keep your will in a safe place at home, or with your solicitor, accountant or bank. Make sure you inform your executor(s) where it is.
- WHO ARE THE EXECUTORS?
In order for your property to be distributed in accordance with your wishes, you must appoint ‘executors’. These are the people who will administer your Will after your death. The executor can be any person you choose, but they must have reached the age of 18 at your death. You can appoint up to four executors under your will.
The executors will find out exactly what assets you have, including all your investments, bank balances, safe deposit boxes etc. They will have to take care of items such as your funeral, paying off your debts and bills, paying the appropriate taxes, distributing your assets and much more. Therefore it is essential that your executor is trustworthy, reliable and capable. It is often the case that testators appoint solicitors or accountants as executors. Where no professional executors are appointed it is highly recommended that solicitors are instructed by the executors to apply for probate. Solicitors will guide the executors as to their duties, thus taking away much of the burden away from executors.
A codicil is a document that amends a previously executed will. Amendments made by way of a codicil may be small or may change the will significantly. A codicil must comply with the same legal requirements and be executed in the same way as a will. You may want to add a codicil to your will if your circumstances have changed and you want to allocate items or money not mentioned in the original document to new or existing beneficiaries. Codicils are useful because you do not have to re-draft the entire will.
Generally, making a codicil should be used when you want to make straightforward changes. If the changes you want to make are complex, it is usually better to make a new will. If you want to make a new will, it is essential that you make it clear the new document cancels any previous wills or codicils you have made, and you should burn or otherwise destroy your previous will.
- SOME USEFUL INFORMATION:
Although a will can be a rather straight forward document, there are many instances which can affect your will. Below is some useful information:
- There is currently no inheritance tax on transfers (gifts) of whatever value made between married couples or civil partners or gifts left to registered charities.
- The first £325,000 of your estate is free from inheritance tax. This can be multiplied by two if your spouse or civil partner has not used up their allowance.
- There is an additional Main Residents Nil Rate Band which can be applied towards someone’s estate on death. It relates to interests in a residential property which has been the individual’s residence at some point and which is included within their estate. It can only be applied on death to one property provided it is left to one or more direct descendants.
- Generally if you have given gifts to people in the 7 years prior to your death, and those gifts were in excess of your yearly annual exemption (£3000 per tax year), then those gifts may become ‘chargeable gifts’; i.e. a gift on which inheritance tax may be payable. There is a sliding scale discount after the third year.
- You can cancel your will at any time by either making a new will or by tearing up or burning your old will. This is called revocation by destruction.
- If you get married or enter into a civil partnership then your will is automatically cancelled, unless you have specifically stated otherwise. If you divorce or your civil partnership is annulled then any gifts to your former spouse or civil partner will no longer be valid for the avoidance of inheritance tax, again, unless you have specifically stated otherwise.
- If you do not leave a will or if some of your property and assets are not accounted for then they may be subject to the Intestacy Rules – England & Wales.
- You can create trusts under your Will to help provide for your children if they have not reached a certain age, disabled family members, groups of people or simply your loved upon your death.
- Trusts are a good way to ensure that property and assets are managed properly and the beneficiaries receive their correct entitlement.
- THINKING OF MAKING A WILL?
If you are thinking of making a will then below are some crucial questions to determine the complexity of your will:
- Consider and choose the executors that you wish to name under the will (maximum of four). You should obtain their agreement before appointing them.
- Do you have any assets (property, cash or other) outside the UK?
- Do you have any wills in any jurisdictions outside of the UK?
- Do you have any property held in joint names as ‘tenants –in-common’ (if so then your share needs to be accounted for individually)? We would be able to establish this for you by carrying out searches against any properties you own.
- Do you want to leave any specific legacies (gifts) to your family and friends? If so, what and to whom?
- Do you have any life insurance policies?
- Do you have a private or workplace pension?
- Do you have children? If so and you wish to leave anything to your children, it is possible to take advantage of the inheritance tax nil rate band.
- Do you have any children who are under 18 years old or disabled?
- Have you made any gifts in excess of £3000 per year in the last seven years? If so these might attract inheritance tax upon your death.
- List the names and shares of those you wish to benefit from your estate.
If you want to make a will, the best way forward is to have a preliminary meeting with one of our solicitors to discuss the above in more detail and discuss the best way forward. At the same time we would ask you to bring with you a list of your assets which should include details of real property, bank accounts, safe deposit boxes, private accounts, personal belongings of high value, motor vehicles, golf clubs etc; if you do not wish to disclose details of your assets, that is fine with us; you must however provide us with the total value of your assets and liabilities. We require this in order to enable us to advise you as to how best to structure your will so as to limit your estate’s inheritance tax liability.
If you are thinking of making a will, or need advice then please contact one of our dedicated solicitors today; do not delay.
- Intestacy Rules
An individual dies intestate when they have not left a valid will or have not disposed of their entire estate by will. Where it appears that someone who has died did not make a will, do not assume that they died intestate. It is imperative that the close relatives and friends of the deceased thoroughly search for a will.
Please click here to be directed to the government’s “Intestacy – who inherits if someone dies without a will?” questionnaire so as to find out who is entitled to a share of someone’s money, property and possessions if they die without making a will.
- HOW CAN WE HELP YOU?
We can advise you on:
- What to do following the death of a family member, friend or loved one
- Completing the Inheritance Tax Account
- Applications for grants of representation
- Applications for limited grants of representation
- International probate matters and estates
- Re-sealing of grants of representation obtained in some foreign countries
- Deeds of Family Arrangements
- Administering estates
- Selling the assets of the deceased’s estate
- Disputed wills
- Claims under the Inheritance (Provision for Family and Dependants) Act 1975
Probate can have two meanings. Firstly, it can mean the document which confirms the will is valid and states who the executors are. It authorises the executors to deal with the deceased’s assets and access their personal accounts and property. This is known as Probate of the will, where there is a will or Letters of Administration where the is no will.
The second meaning of probate is slightly wider. This refers to the various laws and courts which deal with the wills, intestacy, succession, inheritance, administration and disputes over estates. Probate laws have developed carefully over many years. Their main aim is to protect the deceased’s estate, safeguard creditors, ensure the wishes of the deceased under a will are followed or distributed in accordance with the intestacy rules and to ensure that any inheritance tax is paid.
- PERSONAL REPRESENTATIVES
There are two types of personal representatives, those appointed by a will and those not appointed by a will. Personal representatives appointed by a will are called ‘executors’ (a female is often called an ‘executrix’) and those not appointed by a will are called ‘administrators’. The law provides rules on who can become the administrator of an estate if there is no executor named in the will or if the named person does not want to or cannot carry out the required duties. Where there is no valid appointment of an executor, the next-of-kin can apply to be the administrator in a strict order of priority, with spouse/civil partner at the head of the list, followed by child, grandchild, parent, sibling, nephew or niece and then other relatives not named above. Both executors and administrators have similar powers and duties and usually only one personal representative is required to administer an estate.
- APPLICATION FOR A GRANT
Once it has been decided who is entitled to become the personal representative(s), the prospective executor or administrator must make an application to the Probate Registry for the court’s written confirmation of their appointment, known as a grant of representation. The grant made to an executor appointed in the deceased’s will is called a ‘Grant of Probate’ while the grant to an administrator when there is an intestacy is a ‘Grant of Administration’. In addition, there is also a ‘Grant of Administration with the Will Annexed’ which covers the hybrid situation where there is a will but no executors appointed. Although these grants have different names, their effect is virtually the same i.e. to vest the deceased’s assets and liabilities in the personal representative(s). There are also various limited grants which can be applied for in certain circumstances. However, it is not always a requirement to make an application for a grant of representation, for example if the estate does not consist of any land, property or shares or if the value of the estate is less than £5,000.
- IHT ACCOUNT
Before applying for a grant of representation, usually the prospective executor or administrator must first complete an Inheritance Tax (“IHT”) Account which involves documenting all of the deceased’s assets, debts and liabilities in prescribed forms and calculating the gross and net value of the estate. The IHT Account will also show much (if any) IHT is payable by the estate which must be confirmed by Her Majesty’s Revenue and Customs; any IHT due must usually be paid before a grant of representation can be applied for.
- DISTRIBUTION OF THE ESTATE
Once a grant of representation has been granted by the court, subject to complying with the general rules and duties of general representatives, the estate can now be administered by the executor or administrator which will include: paying all the debts of the estate; informing all relevant persons of the death of the deceased; closing bank and other accounts if necessary; calling in all the cash and assets; distributing the estate to the beneficiaries; and generally dealing with all issues and enquiries relating to the estate . Where there is a will, the estate must be distributed strictly in accordance with the will. In certain cases, the will can however be varied by written agreement from all beneficiaries – this is known as a ‘Deed of Family Arrangement’ or ‘Deed of Variation’. Such a variation must be drawn up within two years of death. If there is no will, the administrator must distribute the estate in accordance with the intestacy rules.
Obviously, no two estates are the same however the procedures followed will nearly always be similar unless any problems, delays or complications are encountered, such as: not being able to locate the named executor(s) in a will; not having sufficient funds to pay any IHT which is due; if a will’s validity is disputed; if a claim is made against the estate by an aggrieved family member or any other dependant; etc. It is therefore important to ensure that if you wish to prepare a will, it is drafted properly to avoid uncertainty and that you appoint trustworthy executors. When a loved one dies, it is imperative that any prospective executor or administrator receives proper advice and guidance from the outset to ensure that the administration of the deceased’s estate is as smooth as possible. Any claims made against the estate must also be dealt with in a proper and timely manner.
We have dedicated English and Greek speaking solicitors on hand to deal with any issues you may have in relation to Probate & the Administration of Estates. We can clear any doubts which you may have and provide you with a clear step by step outline of what steps need to be taken following the death of a family member or friend. Please contact one of our solicitors today.
- Estate & Tax Planning
We can assist with various aspects of estate and tax and inheritance planning. However, we are not tax experts and therefore we always recommend that you also consult your accountant and/or a tax expert to provide detailed tax advice. We can then work with your expert to implement the tax structure which you choose to adopt.
Trusts can be complicated. Creating a trust involves more than simply drafting a trust document and arranging for it to be signed. There are many aspects to consider before creating a trust including what assets are going to form part of that trust and who will be the trustees. You will also need to consider the purpose of the trust and if there are going to be minor and/or disabled beneficiaries.
- The Settlor
The Settlor is the person who creates the trust. A trust can be created by either an individual or a company (if it is permitted to do so). Generally, a Settlor must:
- have mental capacity and
- be over 18
There are other factors which must be taken into account such as the Settlor’s financial status at the time of making the trust and the reasons for making the trust. The trust may be at risk of attack if the Settlor is creating the trust whilst going through financial or marital difficulties or if the Settlor does not actually intend on giving up control of the trust assets.
A trust can also be made by a will and come into force on the death of the testator (the person who made the will).
- Types of Trusts
There are various types of trusts and you must ensure that you establish the correct type. Some common types of trusts include:
- Life Interest Trusts
- Discretionary Trusts
- Relevant Property Trusts
- Disabled Person’s Trust
- The Beneficiaries
The Settlor will clearly need to identity the beneficiaries of the trust and they must be properly and adequately identified in the trust document.
- The Assets
The trust assets must be clearly described in the trust document. Furthermore, the Settlor must make appropriate arrangements for the assets to be transferred into the trust once it is established.
- The Trustees
The Settlor will have to carefully consider who will be responsible for day-to-day trust administration (such as dealing with income from a rental property). While trustees are responsible for managing a trust, they do not necessarily carry out all, or even any, of the trust administration tasks personally. Both corporate and individual trustees may want to employ trust administrators who may be in-house, as is common in the case of corporate trustees, or professionals such as solicitors or accountants.
- General Power of Attorney
A General Power of Attorney, often known as an Ordinary Power of Attorney, is where you give formal authority to one or more persons to act on your behalf generally. A General Power of Attorney can be used in a wide variety of scenarios and often when the donor cannot be physically present to carry out certain actions. For example, to give someone the power to sign documents on your behalf; or if given by a company, authority for the attorney to sign documents on behalf of the company outside of the UK.
- Special Power of Attorney
A Special Power of Attorney, also known as a Limited or Specific Power of Attorney, is similar to a General Power of Attorney; however, it gives the attorney power only to do things relating to a particular transaction. It essentially limits the power given to the attorney and usually ceases to exist once the particular transaction has finished.
- Lasting Power of Attorney
A Lasting Power of Attorney, previously known as Enduring Powers of Attorney, is the primary way to appoint an attorney or a decision maker to act on behalf of a person in the event that they lose mental capacity. General or Specific Powers of Attorney will not be valid once the donor has lost their mental capacity. On the other hand, a Lasting Power of Attorney will still be valid even when the donor has lost mental capacity. Lasting Powers of Attorney can be made to look after someones financial and property affairs; and for someone’s general personal welfare and healthcare. They can also provide detailed instructions to the attorneys dealing with how the donor wants their affairs to be managed.
Lasting Powers of Attorney must be registered with the Office of the Public Guardian in order to be valid. This can be done by the donor whilst they have mental capacity; or by the attorney once the donor has lost mental capacity.
- Must be executed correctly
Powers of Attorney must be prepared properly and made by deed. They must also be executed (signed) properly in order for to be valid. It is therefore very important to ensure that the correct document is used and that it is executed correctly.