At A R K Lasting Powers & Wills we offer free initial advice after the loss of a loved one. Family members might think they understand what needs to happen, but sometimes aspects are overlooked or mis-understood.
Here are a couple of case studies highlighting the problems that can arise when estates
aren’t dealt with properly:
- Mrs S sadly passed away in 2019, having lost her husband a few years before. Her son and daughter delayed dealing with some of her estate until this year. They knew that ‘Probate’ would be needed before they could sell her house, but they found it all quite difficult – they buried their heads in the sand and didn’t do anything for 4 years.
Strictly, estates should be finalised within 2 years of the person dying, and if Inheritance Tax is due it needs to be paid within 6 months of death. If everything had been dealt with when it should have, their late father’s unused Inheritance Tax allowance could have been claimed. This isn’t possible now as more than 2 years has passed since they lost their Mum. The whole estate would have been tax-free if they had dealt with everything within 2 years. The delay has cost them dearly – Inheritance Tax is now due at 40% on £200,000!! That equates to £80,000, and there will also be interest and possible penalties to be paid as it is being paid late.
The moral of the story – don’t put things off for too long after you lose a loved one. Understandably, it’s a really difficult time, but delaying for too long can have massive financial implications!
- Mrs H asked us to help her make a new Will recently. She lost her husband in 2005 and showed us her old Will that was made before he died. There was a Trust in it, and we assumed her late husband’s Will would have contained the same sort of Trust. We asked if this had all been dealt with after he passed away; had Probate been obtained and had his share of their home been put into Trustee names on Land Registry records? They were Tenants in Common – meaning that the ownership was 50/50 and Probate would be needed to do anything with Mr H’s share of the property. Mrs H said no, she hadn’t realised that work was needed.
We offered to help sort this out for her, and asked for Mr H’s Will – unfortunately despite a thorough search it can’t be found. This means that the Law of Intestacy will apply (dying without a Will). The levels of money etc that a spouse could inherit in 2005 means that Mrs H should never have inherited everything!
What a can of worms, and a lot of worry and stress for Mrs H. Luckily there are no tax implications, but still it’s made everything more complicated, and the time- delay has meant that the all-important Will has been lost!
Contact us if you have any concerns about dealing with the estate of a loved one. Hopefully we can just provide reassurance that you have understood everything correctly, but if not, we can explain the way forward. Call us on 01438 746977 or email info@arkpowers.com.