The burden of being an Executor

An Executor is the person you choose to carry out your wishes as stated in your Will. Executors can be beneficiaries under your Will and often people choose their spouse, partner and or children as Executors. Please check with your proposed Executors that they are willing to take on this role before naming them. as it can involve considerable responsibility.

  • Being an Executor is a difficult and time consuming job.
  • The role carries personal legal liability.
  • Relatives may be too distressed to perform the role.
  • Decisions could make them unpopular with beneficiaries.

Consider naming more than one Executor in case one dies before you. Also, it will be an easier task if there is more than one person so they may share the task and responsibility.

If the Estate is large or complicated there may be advantages in appointing a Professional Executor such as Solicitors, Accountants etc, but be warned they can charge between 3% and 5% of the value of the estate, and sometimes an hourly rate in addition to this.

For our clients when making a Will if they choose to appoint ourselves as Executors we only charge 1.5% of the estate and VAT, and disbursements.

You should take into account the following:

  • Availability & suitability
  • Willingness to act
  • Any possibility of conflict or dispute
  • The possibility of them predeceasing you
  • The size, nature and location of the estate, the assets and the beneficiaries
  • The costs involved

Where professionals are chosen as Executors they may be appointed as individually named persons or as a firm. Executors like Trustees, are in a fiduciary relationship so they cannot make a profit out of their office. They may only claim out of pocket expenses. Therefore, a charging clause must be included authorising them to charge for all work done by the Executors of their firm in administering the estate.

There is no legal objection to a beneficiary being appointed as an Executor where he or she is the sole beneficiary.

Understanding the role of an Executor:

An Executor has to carry out certain tasks and duties in order to legally fulfil the obligations of the task. As an Executor, you should therefore:

  • Obtain a copy of the medical certificate indicating cause of death.
  • Register the death at the Local Registry of Births Deaths and Marriages. The death must be registered in order to obtain the Death Certificate. NB. it is advisable to get more than one copy as it will be needed when dealing with Insurance Companies, Pension Providers, Banks etc.
  • Ensure any last wishes such as organ donations are carried out. The job might also include planning for the Funeral or Cremation and arranging for payments for the services provided.
  • Make sure you have the last original will of the deceased, hopefully the Testator should have notified you as to the location of the Will.
  • Locate all the heirs, this might seem like an easy task and if there are just a couple of children and they are the only ones named in the Will, it maybe be easy. If there are numerous heirs and they are named in the Will either collectively or individually, the Executor must locate each everyone.
  • Make an exhaustive list of all the assets of the estate, from personal possessions, property, bank accounts, investments, Premium Bonds etc. all debts including credit cards, utility bills, loans etc, they must all be accounted for.
  • Open a separate estate bank account into which all money collected can be paid into. This will prevent estate monies being confused with personal finances.
  • Notify all businesses of the death e.g. Utility companies, Credit Card companies, Banks, Council Tax Offices, Social Security etc.
  • Make sure all the deceased’s debts are settled before the estate is distributed to the beneficiaries.
  • If there are minor or dependent children, the Executor could be responsible for arranging for their care and placement. The deceased might have their wishes stated in the Will. but if not, the Courts may need to be involved in the placement. If there are pets, the Executor will need to care for them and make arrangements for their continued care.
  • Pay any Inheritance Tax necessary.
  • Calculate and declare the value of the estate to HMRC on an Inheritance Tax return, within 12 months of the death.
  • Pay the deceased’s Tax. PLEASE NOTE, this is your personal responsibility. Failure to submit an accurate account to HMRC may leave you open to personal liability or penalties.
  • Complete the relevant forms and submit them to the Local Probate Registry to obtain the Grant of Probate.
  • Distribute the contents of the Will, making sure that if anything is to be left to minors a Trustee has been named.
  • After you have completed all of your tasks, you the administrator need to produce a full set of accounts for the beneficiaries showing the estate assets and liabilities, administration income and expenses and how the estate has been distributed.

A key consideration for you will be the extent to which you wish to involve professionals to help and support you in this role.

If you are considering asking someone to serve as the Executor of your estate, be sure you understand the duties and responsibilities of being an Executor.

Remember being an Executor of an estate is not really an honour, it’s difficult, and time consuming and carries personal legal liability.

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MAKING PLANS TODAY FOR TOMORROW

Why risk everything you’ve worked for?

Most good chess players rely on having a strong strategy in place to increase their chances of beating their opponent and winning the tournament. In life, the same rules apply and those who take the time to plan ahead succeed. All your hard earned assets could be lost if you don’t make the time today to put some simple planning in place.

Wills – Many people put off making a Will for a variety of reasons, but the harsh truth is that you can put off making a Will until it’s too late, causing all kinds of problems for the people you leave behind and end up giving some, or all of your inheritance, to the wrong people or even the State!

Trusts – Using Trusts are an important part of any estate planning strategy and not only for the very wealthy if you want to protect your hard earned assets after you are gone, for future generations against attack from, Remarriage, Divorce, Bankruptcy, Long Term Care and Inheritance Tax.

Lasting Powers of Attorney – Managing your own affairs can be difficult later in life, or you could become seriously ill or even have an accident. Who would look after your financial affairs then? Who would make decisions for you regarding your medical treatment, living arrangements or care? Creating Lasting Powers of Attorney in advance, ensures that if the worst were to happen both your financial affairs and personal welfare are in safe hands.

Funeral Plans – Free your loved ones from the financial and emotional burdens of paying for and organising your Funeral after you are gone. Act now to ensure that your wishes are carried out exactly as you would want, and also freeze the cost of your funeral at todays prices.

Probate – Many people choose relatives or close friends as their Executors but this can be a difficult and time consuming job, at a time when they may not feel up to the task. Appointing a professional Executor in your Will ensures that your estate is dealt with as quickly and efficiently as possible. Fixed costs at the outset, along with a dedicated team of sympathetic and expert case handlers on hand ensures that the entire process is stress free.

Prepare for the game ahead with us and ensure that you and your loved ones are protected, for more information please call us on 0161 771 2056 or email us at help@FinanceNorthEPS.co.uk, or simply enter your details below and one of our consultants will contact you.

Finance North Estate Planning Services
Cheshire Office – 0161 771 2056
Staffordshire Office 01782 963 303

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Making Sense of Wills – The Jargon

When it comes to sorting out a Will, there’s an awful lot of jargon to try to make sense of. Here are some of the most common terms you’ll come across, and what they really mean.

  • Assets: These are the valuable items you own and cover your possessions, property, cash, etc.
  • Attestation: This is the signing and witnessing of a will.
  • Beneficiary: This is a person or organisation to whom you leave something in your Will.
  • Bequest: This is the term for a gift that you have left to someone in your Will. There are several different kinds, for example a specific bequest is a particular named item, such as a piece of furniture or jewellery.
  • Capital Gains Tax: Changing a solely owned property to Tenantsin Common is a transfer of equity from the sole owner. Technically they are gifting an asset which could give rise to Capital Gains Tax (CGT). However their is a releif against CGT if the property is the main residence. Additionally CGT is not applicable for transfers between spouses.
  • Codicil: This is a document that can be used to change a Will which has already been written.
  • Crown: This is essentially the Government and it is where your money will go if you die without writing a Will.
  • Estate: This is the total of your assets minus the value of any liabilities you owe.
  • Executor: When you write a Will, you need to name an executor. This is the person who is responsible for ensuring your wishes are carried out.
  • Family Interest in Possession Trust: This is for a married couple with an estate value in excess of two “Nil Rate Bands” and benefits from “Spousal Exemption”.
  • Family Probate Preservation Plus Trust: This is used where you wish to pass all or part of your main residence to be controlled and managed by Trustees whilst you are still alive. This requires a Conveyance transferring the asset to the Trustees.
  • Family Probate Trust: This is a discretionary trust with the main feature being that the Settlor can also be a potential beneficiary.
  • Family Trust: To protect the inheritance from various threats rather than the Will directing the assets absolutely to the beneficiaries it is best to direct these assets via a Family Trust. this is a Discretionary Trust where the Trustees decide who and by how much the beneficiaries benefit.
  • Guardian: A person who is responsible for children until they reach the age of 18.
  • Inheritance Tax: This is a tax which is paid on the portion of your estate which is above the nil-rate threshold. Currently, this stands at £325,000 for individuals, though you can now pass on a further £100,000 (rising to £175,000 by 2020) if you are leaving your primary residence to family.
  • Intestate: This is when someone dies without leaving a Will.
  • Legacy: This is another word for a gift or bequest left in your Will.
  • Mirror Will: As a couple it is very common that the content of each individual’s Will mirrors the other.
  • Probate: This proves the Will is valid and gives the executor the authority to administer the estate.
  • Residue: This is the word for what is left of your estate after debts, taxes and certain bequests have been handed out to beneficiaries.
  • Severance of Tenancy: Most couples own their property as “Joint Tenants” which means that on death of one of them, the property passes to the survivor automatically. It will not pass according to your Will. This is similar to how most joint bank accounts and other jointly owned assets are held. By severing the tenancy of a joint property, it is declared that the owners in fact each own a proportion of the property which their wills can direct accordingly on their death. The ownership of the property when this is done is called “Tenants in Common”.
  • Testator: This is the name for the person who has made a Will
  • Trust: You can set up a trust to administer some of your assets after you die.
  • Trustees: These are the people that manage a trust.
  • Witness: A Will must be signed in the presence of two witnesses, who also need to sign the Will.

If you need to speak to a qualified professional about writing a Will or if you have a Will already and not sure if it’s achieving what you need it to, please contact Finance North Estate Planning Services today, on 01782 963 303 or email help@FinanceNorthEPS.co.uk.

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Offices in Cheshire and Staffordshsire
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The Cost Of Dying Is Increasing

The Government is introducing a new fee structure that will affect the cost of accessing an estate when someone dies.

Fees for Applications for Grant of Probate or Letters of Administration (for when someone dies intestate) will be changing and could eventually impact you and your family when you’re no longer around.

The new fees will take effect from May 2017. At the moment, the fees are set at either £155 if probate is applied for by a Solicitor or £215 if it is applied for by friends or family. There are no fees if the value of the estate is less than £5,000.

The first change is that estates below £50,000 will no longer have to pay any probate fee. This significantly increases the number of estates exempt from the fees. Unfortunately, everyone one else will see an increase, with those with the largest estates seeing fees of up to £20,000.

The fees are tiered depending on the value of the estate:

  • £50k – £300k = £300 fee
  • £300k – £500k = £1,000 fee
  • £500k – £1M = £4,000 fee
  • £1M – £1.6M = £8,000 fee
  • £1.6M – £2M = £12,000 fee
  • Above £2M = £20,000 fee

These fees are in addition to inheritance tax (IHT).

When somebody dies, the executors must apply for a Grant of Probate from the probate registry. This needs to be done to allow them to administer the estate according to the terms of the Will. These fees need to be paid up front. It may be difficult if the executor is not able to release cash from the deceased’s bank account and/or the executor is on a low wage or benefits.

Previously they may have been able to apply to get help with the fees. However, the Government is also removing probate applications from the general fees remissions scheme and financial help will no longer be available.

There are things to consider which may reduce the amount of probate needing to be paid. In particular, married couples or those in a civil partnership should consider the nature of any property ownership agreements they hold.

Another way to reduce the cost of probate is to consider setting up a Trust. This may lower the value of the estate (from a probate point of view) and drop it from a higher tier rate to a lower one.

Trust law is complex. You will need advice from a specialist to ensure you are setting one up in the most tax efficient way, so that it doesn’t end up costing you more than you hope to save.

For advice on this or any aspect of Estate Planning or Will Writing, please call Finance North Estate Planning Services on 0161 771 2056, or complete the enquiry form below for more information.

VIP R.I.P.

It’s been a grim year for everybody but the Grim Reaper. As we bid farewell to 2016, we ask why it’s been such a bumper year for celebrity deaths…

 “Why are so many celebrities dying in 2016?” asked the Daily Mirror, whilst people on Twitter expressed that their tolerance was subsiding, “Enough, 2016!”

 Other users of the site posted pictures under the tag line “Me at the beginning of 2016 versus me at the end of 2016” – the first an upbeat image of a character such as Kermit the Frog and the second showing the same figure beaten down by life; a bedraggled mess.

So why has 2016 been such a good year for the Grim Reaper when it comes to celebrities?

Experts have come up with a few reasons. Thanks to the proliferation of media over the past few decades, there are more stars around these days, for one. In the early part of the 20th Century, before television, the only celebrities were film stars. Social media also plays a role. As well as creating new stars, it also means that we hear about celebrity deaths far faster than in the past in addition to providing everyone with a platform to publicly share their grief. Then, there’s the fact that many of those who died in 2016 were baby boomers – people aged between 52 and 70. With so many born into that generation, it makes sense that lots of them went on to become famous.

One numerological theory is that 2016’s bad luck is due to its digits adding up to nine, the number commonly associated with completion and endings.

What is incontrovertible, however, is that 2016 was the year that reminded us that death is inevitable, regardless of how rich and famous they are. It also reminded us of the importance of writing a will. Whilst Alan Rickman left £100,000 to charity, David Bowie similarly planned sensibly, setting out 20 pages of instructions on how his estate should be divided. This included his wish to have his ashes scattered on Bali after a Buddhist ceremony. On the other hand, Prince died intestate, with drama ensuing over his £300m estate as various people claimed to be his blood relatives.

Although more famous faces will stay the course this year, January 2017 is still a good month to reflect on our own mortality and get our estates in order – even if they aren’t of A-list proportions.

Here at Finance North Estate Planning Services we are here to help you write your Will and we offer all our clients a red carpet service, so give us a call now on 0161 771 2056 or complete the enquiry form below.

Finance North Estate Planning Services
0161 771 2056