Probate Costs
Many firms will appoint themselves as Executors or Reserve Executors, and commonly they would get the job on the second death.
I was reviewing (FREE) a pair of Wills today, a fairly normal estate, nothing extravagant, with a £300,000 property and around £150,000 in investments. The firm’s letter clearly (to me) stated that they would charge:
- their fully hourly rate with maybe 12 hours at £300 and hour = £3600 + £720 VAT = £4,320.
- PLUS 0.75% of the value of the property = £22,500 + £4,500 VAT = £27,000
- PLUS 1.5% of the other assets = £2,250 + £450 VAT = £2,700
So revising their Wills at my modest fees could save their beneficiaries the best part of £30,000!
Children
I often see Wills where the children are specifically named, which means that every time a new one appears (before they discover why ;-), both Wills need to be changed every time. Of course, it could be the right thing to do, but when you have young children every £ counts, so why not say “the children of the marriage of” and save (forgetting) a few crucial amendments?
SEN & Disabled Children and other beneficiaries
Many SEN or less able children grow up to manage their affairs perfectly well. But if there is doubt, it is often better to add a special Trust to your Will. This allows whoever you appoint as Trustees to look after their finances (if it turns out they can’t) and as a potential by product often means that they retain the right to benefits which would have been lost if they inherited direct.
Family Fall Outs
These vary from minor tiffs, which may sort themselves out to catastrophic and permanent breaks. Probate Disputes can be HORRENDOUSLY expensive £200,000 of legal bills in total, not being unusual. Bigger disputes can run into 7 figures, often leaving nothing for the other beneficiaries. I very much try to keep the peace, but that is not always possible, and the results of Court cases are never predictable. There are things that can be done in advance to minimise the damage, but as ever, your planning needs to be kept under review. I recommend every 3 years unless something significant happens in the meanwhile.
Marriage
Marriage cancels any previous Will unless it was clearly and specifically made as preparation for that marriage, which followed fairly swiftly. So if you made Wills while living together, then got married, you may not have Wills that will work!
Divorce
If you are going to divorce, the FIRST thing to do is amend your Will, and possibly change how your home is owned. A Decree Nisi is NOT a divorce, and many people fail to get the Decree Absolute, which is the divorce, and until that is done, you are still married!
Blended Families
With many people now being married several times in their lives, perhaps with several sets of children, the possibility of the death of one partner and the remarriage of the survivor must be considered. Fraudsters also practice grooming well-off single people, too – “precatory marriage.” So talk to me and we can set up plans which are fair to everyone.
Common Law Spouse and Living Together
Of course, legally, there is no such thing as common law marriage; it is just 2 single people living together. There is a possibility that Court action (if you can afford it) will give the survivor something, but the love of your life might be kicked out by relatives who are entitled under the Rules of Intestacy (which govern what happens if there is no valid Will). Equally, house shares could prudently have an agreement that that is just what they are, not dependents.
Giving the House to the Kids – to INCREASE Tax
This is a cunning plan which will generally be considered fraud, and potentially increase and not reduce tax. If you want to try it, then you can give your house to your kids, though there may be a tax charge for more valuable properties, and then pay a FULL market rent, which is professionally agreed annually. Of course, the rent is someone’s income and therefore taxable.
Fail to get the right advice and the property will potentially be subject to tax in your estate and the children’s, and the Principal Private Residence relief won’t apply, and the property could be subject to Capital Gains Tax when the kids sell it.
And it gets worse – if your kids get divorced or take out loans against “your” home or become bankrupt “your” home could be sold to pay their debts or divorce settlement.
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