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Are Scottish Wills Different?

You will often notice that when anything is talked about in legal terms, including probate and will writing, that Scotland is kept separate from England and Wales. This is because there are different laws governing the country. However, even if the laws are different, there will still be some cases wherein people have properties in both Scotland and England or Wales – and this is where confusion can lie.

The type of will you write should depend on where you are living. So if you live in Scotland, it is best to write one in line with the Scottish rules. If in England and Wales, choose to work on the English and Welsh rules. This is the case even if you have property in another country – the will you write should be connected to where you are living. Probate will be different too.

Scottish wills are different

There are some big differences between Scottish wills and English and Welsh wills. One of the biggest is that marriage does not invalidate a previous will in Scotland. Therefore, it is essential that you make a new will if you are living in Scotland and have re-married, otherwise your original will will still be valid and your ex-spouse may inherit everything when you die, even if you divorced many years ago.

In Scotland, the testator has to sign every page of the will, rather than only once at the end. And witnesses need to include their name, address, and occupation. However, unlike in the rest of the UK, it is possible for a will to be written and signed by the testator without any witnesses, or if the witnesses are also beneficiaries, using a special handwritten statement. If you choose to do this, then it is imperative that you have expert advice, as failing to adhere to the rules could make your will invalid.

The spouse and children have ‘prior rights’ under Scottish law so that they cannot be deliberately excluded from inheriting. The spouse would be entitled to the house to the value of £65,000, furnishings to £12,000 plus cash to £21,000 if there are children or £35,000 if there are no children.

Deed of Variation

Deed of Variation

After the death of a person, a deed of variation can be created to alter the distribution of that persons estate. There are several reasons why people would enter into a deed of variation not least to save inheritance tax, especially if a person passes away intestate.

If a person died intestate it is possible that because of the strict inheritance tax rules, their whole estate does not necessarily pass to a spouse who would be exempt from paying inheritance tax. If the adult children agree, they could sign a deed of variation to divert the whole estate back to the surviving spouse. This is just one example of why people would use a deed of variation. There are many others including of course using a deed of variation to change the terms of the persons will.

Deed of Variation form

There is no set form that can be used for a deed of variation, this is because the wording of nearly all deeds of variation is bespoke, deeds of variation are bespoke legal documents. This means they are written for a specific scenario.  There is especially no do it yourself deed of variation document available. We will explore the do it yourself deed later in this page.

HMRC deed of variation checklist

As with the above question with regards a deed of variation form there is no HMRC checklist for the deed of variation.  In most scenario’s when entering a into a deed of variation HMRC need not be involved.  The variation document would only be sent to HMRC if it affects the current tax position. Noting that the document may also be required if the person who was agrees to enter into the variation dies within seven years or perhaps 14 years if they had made use of other inheritance tax gifts.  Another reason HMRC would also need to see the deed of variation would be when any surviving spouse passes away. If do wish to ensure your deed would be accepted and you are worried that no checklist exists then contact us for further advice.

Deed of variation cost

As we previously outlined this type of document is bespoke thus the deed of variation cost can also be variable. The cost of a deed of variation, if it was quite simple is around £250 plus VAT however, deeds that transfer estates to a trust can vary on cost considerably.  If you are unhappy with the cost of a deed of variation that you have been quoted call us to see if we care able to offer a most cost effective approach.

Do it yourself deed of variation

The DIY market for legal documents is not really something we would advocate as such the do it yourself deed of variation is one example of a document that we would not be able to supply. If you `are looking to enter into a deed of variation it is likely that you are looking to alter the inheritance tax position of either the deceased estate or perhaps the beneficiaries of that persons estate. HMRC may well be interested in viewing the document, although they do not supply a checklist, they may wish to check the document conforms with the legal position.  A Do it yourself deed of variation could be a ticking time bomb, in other words you may not even know the do it yourself deed of variation is even invalid until many years later.  Considering, that if the deed of variation effects any tax position, it must be entered into within two years.  In other words, unlike some legal documents, it cannot be corrected years later.

Deed of Variation

Deed of Variation created to alter the distribution of an estate

Who signs a deed of variation

The person who signs a deed of variation is any person that is affected by the money that is going to be redirected. For example, if an estate is being left to five people and one of them does not wish to receive his or her inheritance then he or she would be the person who signs a deed of variation. The other beneficiaries need not sign the document and in fact not only do the others not sign the deed of variation they do not even have to know that the deed was effected.  Only the person or people affected by the deed of variation signs the deed.

Deed of variation letter template

If you are a Solicitor or other legal professional looking for a deed of variation letter template then although we would not supply a complete letter template we would be pleased to help you with some standard clauses. If you are a member of the public looking for the deed of variation letter template then although it is possible to sign a deed of variation in this way we would not advocate such a template letter, this is because HMRC may need to know that the beneficiaries signed a deed of variation form and without the correct advice and correct legal clauses it may not be valid and comply with HMRC deed of variation checklist.

Deed of variation example wording

We cannot supply the deed of variation example wording but are happy to supply basic example wording to any legal professional.  In our opinion this type of document should not be created on do it yourself deed of variation basis. Call us for a quote, we will be happy to let you know the deed of variation cost. We need not visit you at home to create the document, instead we can simple email you our basic instruction form to begin the process.

 

 

Is It Possible To Avoid Probate?

The big truth about probate is that it takes a long time. Even the simplest of estates have to wait for months in most cases for probate to be completed. This is not ideal, and if probate is not required for your estate, your beneficiaries will receive their inheritance much more quickly. There are some ways to ensure that probate does not have to happen.

A Living Trust

A living trust is an alternative to a will, with one major difference. The living trust is executed whilst you are still alive. Everything included in it is placed into a trust so that when you die it can immediately be distributed to your beneficiaries. The trust will be managed by a trustee until the time comes to divide it. This avoids probate since, to all intents and purposes, there is no estate to deal with. However, this is not always an ideal solution since, if your property and assets are in trust, you cannot sell them should you need to.

Name Bank Account Beneficiaries

A living trust can be a complicated and time-consuming process, unlike writing a will which is usually fairly straight-forward. Therefore, it is not the right thing for everyone. If you don’t like the idea of a living trust, there are other methods you can use for avoiding probate. One is to look at your bank account, retirement fund, stocks and shares and so on, and see if it is possible to name beneficiaries on them. In many cases, this is exactly what you can do. Why is this useful? It’s because, if a beneficiary is named on a bank account, for example, when the account owner dies, the account immediately passes to the person named. This bypasses the need for probate entirely.

Joint Tenancy

Finally, you may wish to consider holding any property you own in joint tenancy, if you don’t already. Owning a property jointly means that it will automatically pass to the other owner on your death. No probate will be required. You don’t have to be married for this to occur either, as long as both names are on the deeds.

Chain of Representation

Chain of Representation

The chain of representation is as simple as the name suggests, when named as an Executor under a Grant of Probate or an Administrator under Letters of Administration you are the person who is representing the Estate of the deceased person.  Thus representation is granted to you. If something happens to you then you need to have something in place that continues that representation i.e the chain of representation. This has to be a Will.  If you not have a Will in place, you die intestate, then you break the Chain of Representation.

Once the chain of representation has been broken administration of the first estate passes back to the next of kin to the original estate .  This means that even when probate, or letters of administration, has been granted on your own estate the person named as the administrator on your estate has no legal standing to finish the administration of the first estate.

Grant De Bonis Non

When administration has been passed back to the next of kin of the first to die, that person cannot just take over and sign papers. They would need to go back to Probate court to apply for a Grant De Bonis Non.  This is the title of the document that new administrator would need to apply for.  If the original person had died testate as opposed to intestate, in other words they had made a will themselves, then the Grant becomes known as the Grant De Bonis Non with Will Annexed.

When it comes to making a will, many people who are appointed as an Executor or Administrator do not want to think about there own mortality. But they must do. If not it could be that the family of the first to die were excluded from the Will of that person, if all of a sudden that family is required in order to apply for the grant de bonis non all sorts of complications can arise.

Will Annexed

A simple term meaning the Will is also attached to the Court Order. In the terms of a Grant De Bonis Non with Will Annexed, this means the Grant De Bonis Non is the main court order but because the named Executor in the will died Intestate tis new court order has the original Will annexed to it.

What Does Probate A Will Mean?

Probate happens after someone has died, and it means the legal transference of the title of property from the deceased to the heirs and beneficiaries of the deceased. The entire process is supervised by a court to ensure that everything goes smoothly and there is nothing untoward happening. Probate isn’t just about making sure that possessions are given to the right people; it can also include confirming that the estate can pay off all debts and taxes, confirming the validity of the will, and settling any disputes that may have arisen.

It is much easier (although not necessarily easy) to complete probate if the deceased has written a will. There will be an executor, and that person will have the task of dealing with the will and everything in it. They will need to pay the debts and taxes, and they will need to distribute the deceased’s assets. If there is no executor named, one can be appointed after the testator’s death – family members can do this, or the court can appoint one. Once the executor is in place, they must submit the will to the probate court. Assuming the will is not disputed and the estate is a simple one then probate can begin.

It is a more difficult matter to deal with if there is no will. Probate will take a lot longer, for example. The first thing that needs to happen is that there will be an administrator appointed by the court – this person is instead of an executor. This person will need to deal with debts and taxes and then distribute what is left of the estate according to intestacy laws. If there is no family, then the remainder of the estate will need to be passed instead to the Treasury.

How Long Will It Take For An Estate To Be Settled?

Every estate is different, and every estate will take its own time to be settled. A hard working and efficient executor, however, can really move things along, and ensure that there are no lags or delays, where possible. If the executor manages the estate properly, then it will be much easier for it to be settled quickly – and if he or she manages it improperly, then it will, obviously, take longer. But more than that, they might be liable for any costs incurred. So having the right executor can make all the difference.

There will be deadlines imposed via the probate court, and so there will not be a never-ending probate process. It will have to be completed at some point. It does depend, however, how complicated the estate is, and how much time the executor has to deal with it.

To begin with, the executor must apply for a grant of probate, without which they won’t be able to carry out any of the work asked of them. If this is done quickly, the rest of the probate process can also be done with speed. The longer this first part takes, the longer the entire process will take. This is why it can often be best to employ an executor who is not emotionally involved in the estate, as grief can delay the beginning of the process.

The estate will also need to be valued, and the assets listed. Everything needs to be included within the list of assets, including property, belongings, stocks and shares, vehicles, and debts. Ideally this will be an easy thing to do, with everything being listed out in the will. Sometimes, however, things are forgotten, and missed out of the will. This is often the savings accounts that have barely anything in it, for example. No matter how little is in the account, it will still need to be accounted for. This can take a lot of time if the deceased was not an organised kind of person.

Creditors also need to be informed of the death. How they are informed will depend on their own protocol, and many will require the grant of probate to be obtained before they will speak to anyone about the debt that is owed. And some will only work on the basis that any requests etc are sent through the post (taking yet more time). Once it is clarified, the estate will need to pay this debt before any beneficiaries receive anything. However, some debtors may reduce the debt or write it off – it all depends, so it will take time to go through everything (assuming there are many debtors to satisfy).

Inheritance tax is another thing that can take time to organise, but which must be done in some cases. Not every estate will be subject to inheritance tax – there are thresholds (currently £325,000 or £650,000 – this depends on whether there were two estate owners and one has pre-deceased the other) and if the total value of the estate is less than the threshold, no IHT will be payable. If it is payable, this again will need to be paid before the estate can be paid out. This may involve the executor taking out a temporary loan to cover the cost until the property is sold and they can have their money back.

How Much Does A Grant of Probate Cost In England and Wales?

Asking how much anything costs when it comes to legal matters can often seem like a losing battle; there are so many variations and ‘it depends’ factors to take into account, that it can something of an impossibility to find any kind of answer. It’s no different when asking about a grant of probate. But this blog post aims to at least give you a budget idea.

The grant of probate (or grant of representation) is required if there is a valid will. It is a legal document that confirms the executor’s identity and authority, allowing them to deal with the deceased’s bank accounts, property, and other assets. The grant of probate is often needed before any access to these kinds of accounts can be given.

The cost of getting the grant of probate that you need (and bear in mind, it is not always required – each bank has its own limits on how much money an account needs to have in it before they need to see this document) depends on whether you choose to apply yourself, or whether you have professional help to do it. The standard court fee for a grant of probate is currently £215, but if the estate is worth less than £5000, there is no need to pay for the grant.

Additional costs will involve administration charges, and this will depend on the solicitor that you choose to use. It is entirely your choice whether you work through probate yourself, but remember that it can take many months, it is hard work, and if you make any mistakes you will be personally liable. Although it costs more, hiring a professional can be the best move in the end.

And again, it depends on which type of professional advice you take as to how much you will need to pay. Solicitors often charge by the hour, and sometimes they charge on a percentage rate on the total value of the estate (this can be anywhere between 1.5% and 5%). This can obviously take a large amount out of the estate, but you may consider if worth doing. Remember to check whether VAT is included, or whether it will be added to the final bill.

Facts About Probate

When it comes to probate, there are very few people who really understand all the ins and outs of it. These people are the ones who work in a role that means they come into contact with the issues of probate on a daily basis. For most people, however, their dealings with probate are very limited – and some people may never need to have much to do with it at all. And that’s why it can feel so alien and so complicated when they do suddenly have to contend with it.

There are some facts about probate – and wills – that it may be useful to remember if and when the times comes for needing to be more involved in the probate process.

If you have no will, then your assets won’t necessarily go straight to your spouse, even if that’s what you assume will happen. Without a will, you will have been deemed to have died intestate, and if that happens then there are strict rules about who will inherit what. This is true whether you are legally married, or whether your partner is considered your common law spouse. Stepchildren won’t automatically inherit either. And that’s another reason why you should update your will regularly. If, for example, you divorce and remarry, you may need to revise your will otherwise your estate could be passed to people you would rather it didn’t go to.

Care home fees… this is something that many people worry about. However, you can actually protect your estate from having to be used to pay for a care home. This is when it is useful to speak to an expert in wills who will be able to ensure that the right caveats and legal inclusions are in the right places.

Remember, even if you want a relative to inherit your assets, if they are jointly owned by both you and someone else, the surviving owner will receive the entire asset, no matter what it says in your will.

You can leave assets to children in your will, but they won’t be able to receive the asset until they are 18 (or older if you stipulate a higher age in your will). The asset will need to go into trust until that time.

If you have no blood relatives, your estate may instead go to the government if you have not made a will. In order to make friends or charities as beneficiaries, you will need to ensure that you have a will that states this.

Finally, everything that goes to a spouse or civil partner, or to a charity, from your estate does so tax free. For everyone else, there is potentially inheritance tax to pay. This depends on how much the estate is worth.

Don’t Get Caught With A Bill for Inheritance Tax

There is a lot of work that goes into being the executor of someone’s estate. And it will take you a lot of time to get everything done, which is particularly hard if you also have a full time job. But did you know it could also cost you a lot of money too?

That’s because executors can end up being the ones that have to pay the inheritance tax bill due to HMRC’s time limits on payments. Although it would be great to use money from the estate to pay this potentially large bill, the time limit may not allow for this, which is when the executor has to put their hand in their own pocket.

The insurer Royal London looked into the kinds of financial difficulties that arise when someone dies, and this catch 22 situation was unearthed many times. The big problem is that the tax needs to be paid, but the money from the estate isn’t available until the property is sold. The executor is therefore liable for the tax bill. The Royal London, as well as other companies, are asking for more time for the IHT to be paid – preferably until after the assets are released or the property is sold. This is especially important when the estate is a complicated one.

The time limit in place at the moment is six months. So, by the end of the sixth money after the death, the bill must be paid. If it is not, interest will be charged. This is not so much a problem with a simple estate, which generally can be completed within three to six months, but probate for a complex estate can take as much as a year – or even more – which is obviously outside of the time limit set by the government. So in this case, the executor has to pay, and reclaim the money later, from the estate.

One way around this problem is an installment system. HRMC offers this for some estates and some assets. The tax can be paid in installments over 10 years – but interest will be charged. However, once the asset is sold, the full amount will be due.

Does Everything Go Through Probate?

The simple answer is no, not everything will automatically go through probate. Anything that has only the deceased’s name in the title will need to be probated, and that will include bank accounts, property, vehicles, investments and so on. The probate court is the only body that can take the deceased’s name off a deed and put the beneficiary’s name on it.

However, if anything is jointly owned, then it is unlikely to have to go through probate. They will instead transfer automatically to the surviving owner. Assets that are in a trust also often avoid going through probate. This is not always the case, though, and will need to be checked by the appropriate authorities, just in case.

If both owners of a jointly owned asset die at the same time, then the asset will need to be probated before it can be given to the beneficiary. Transfer of ownership will happen automatically when the first owner dies if the asset is jointly owned, so even if your will states that someone else should inherit, the asset is legally not yours to give away. The surviving owner can choose to either follow your wishes or keep the asset themselves – it is their decision to make, and what is written in the will makes no difference in this instance.

Being tenants-in-common is a different type of joint ownership. If you die first, your share is distributed exactly as your will dictates – if there is no will then it will be distributed as per the rules of intestacy. So the deceased has control of what happens with their share, but it will need to go through probate before it can be distributed.

In some cases, assets such as insurance policies and bank accounts allow you to name a beneficiary when you set them up. When you die, those assets will be paid directly to your beneficiary without needing to go through probate. There are some circumstances when that does not happen including when the beneficiary has died first or is incapacitated, if the beneficiary is a minor, or if you choose to simply list ‘my estate’ (or similar) rather than naming an individual.

Trust assets avoid probate, unless it is a testamentary trust. This kind of trust will need to go through probate.

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