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Wills, probate and inheritance tax case studies

Our team of probate solicitors has a wealth of experience in this field, from drafting a will, estate planning for avoiding inheritance tax, preparing power of attorney, applying for probate when someone dies, and contesting a will, amongst others.

Claim against the estate

We were instructed by a client who had been appointed executor under his father’s will and, since a grant of probate was not required to close the bank accounts, he decided to distribute the estate without legal advice. Unfortunately the estate was distributed before the limitation period expired for a claim against the estate. A claim was issued for reasonable financial provision by the deceased`s partner. Since the claim had considerable merit, and the executor was aware that the partner had been omitted from the will, the executor was negligent for prematurely distributing the assets without obtaining indemnities from the beneficiaries or obtaining insurance.

Predictably, the beneficiaries had spent all the money and did not have the resources to refund the payments to the executor. This left the executor personally liable to meet the claim of £30,000 including the legal costs of the deceased`s partner, a sum which completely exhausted the estate.

By obtaining legal advice at an early stage, the bulk of these costs, and the litigation could have been avoided. Although the claim would still have succeeded, the partner’s claim could have been negotiated and funds left in the estate for distribution with the deceased`s children as the testator intended.

The vet’s bill

We were recently instructed to advise the executor on his late wife’s will and obtain the grant of probate. The deceased had written her will on the back of a vet’s bill whilst attending her hairdresser as this, apparently, was the only paper available and the will couldn’t wait.

The will contained the signatures of two witnesses (that were difficult to read) but without any contact details nor an attestation clause confirming compliance with the Wills Act. The will contained a large legacy in favour of a local charity. If the will could not be proved, the intestacy rules would apply and the spouse would inherit the whole estate and the charity would lose a substantial donation.

After instructing an enquiry agent, we were able to trace one of the attesting witnesses (who was due to emigrate the following month!) who provided an affidavit confirming the circumstances in which the will was signed and witnessed in the hair salon.

We applied to extract the will in the Birmingham Probate Registry supported by the affidavit. Thankfully, the vet’s-bill will has now been proved and the charity’s legacy remains intact, just as the will specified. Without this affidavit, the will may not have been proved.

To avoid the uncertainty of a will not being accepted by the Probate Registry contact our probate solicitors to draft a will on your behalf.

Inheritance Tax

When applying for probate the value of any property owned by the deceased has to be included in the estate tax return. The value of property is the open market value at the date of death commonly known as the “probate value” (although this is not a term accepted by HMRC). With a declining housing market, the value of property can decline between the estimated value at death and the actual sale price. If Inheritance Tax has been paid on the estate, this can result in the over-payment of tax.

Antony J Illsley was recently instructed by a client with this scenario. The executors were advised to claim relief since the sale occurred within 4 years of the date of death. HM Revenue & Customs accepted the claim and substituted the actual gross sale price for the estimated value originally supplied. This resulted in a tax repayment exceeding £10,000 much to the delight of the beneficiaries!

This relief can only be claimed by the executors. If the property had already been transferred to the beneficiaries and then sold at a loss, a tax claim cannot be made.

Case study examples:

  • Claim against the estate
  • The vet's bill
  • Inheritance tax

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