Providing for a pet in your will

Your pets are an important part of your family, but providing for them in your will is not as straightforward as providing for other family members,’ says Nigel Miller, Head of the wills and probate team. ‘Whilst a cat or dog might be relatively easy to care for, pets such as tortoises, llamas, or horses will likely require specialist care by someone who has sufficient time, knowledge and property to give your pet the care they need.’

Pets do not have a distinct legal personality and are technically belongings, but they sit in their own category between possessions and dependants and need to be considered carefully.

This means that you need to leave instructions about them in your will, and any financial provision you want to make for them cannot be a gift to the pet.

Livestock or pet?

There is a distinction between pets and livestock for the purpose of a will. You might, for example, have two pigs or llamas that you keep as pets, which would be treated as any other pet would in your will. However, if you have, for example, a rolling stock of 20 pigs that are used for breeding, or sold for their meat, this would likely be considered livestock and a business asset. Leaving livestock as a business asset under your will should be dealt with very differently and you should seek specific advice on this point to consider any pre-existing business agreements, as well as the most tax effective options for disposal on your death.

Leaving instructions about a pet in your will

First, you will need to consider what you wish to happen to your pet.

The most straightforward way is to leave your pet directly in the care of another person. This could be an existing owner of the pet, such as your partner or children, or it could be another family member or friend who does not currently share ownership of your pet. As with any gift in your will, you can leave your pets to whomever you wish and they do not need to know, or pre-approve, your intentions. However, a beneficiary of your will is not obliged to accept their gift and it can, therefore, be worth checking in advance that they are happy to take on responsibility for your pet.

Alternatively, you may prefer to leave your pet to a person or organisation for them to find the pet a suitable new home. This could be an animal charity, a family member, a trusted friend, or an executor, for example. You can state your wishes in regard to rehoming, but you should bear in mind that these would not be legally binding and the person or organisation would be ultimately responsible for deciding where your pet should end up going.

At the time of your death, it is possible that an individual may not be best placed to take on the responsibility of rehoming your pet, (for example, if ill or in unsuitable housing), and you should also consider the possibility that they may decide to pass the responsibility on by involving an animal charity.

In the case of a larger animal, for example, a horse, it may be that they can be sold by the estate and the sale proceeds paid to your beneficiaries. Your executors will have the authority to sell the pet, and it can be useful to leave a separate letter of wishes to guide your executors as to how, where, when, and to whom you would like the pet to be sold.

A professional can help you to decide the best approach for your circumstances.

Practical factors to consider

If your pet requires unusual care, or extensive facilities or land, this may need extra consideration when it comes to deciding who the best person is to care for your pet.

If you are leaving your pet to a charity to be rehomed, you should consider any specific wishes you might have about the type of home you would like them to go to and any particular way in which you would like them to be cared for. If you have more than one pet, you might also wish to request that they are not separated. As well as a will, a solicitor can draft a detailed letter of wishes for you so that your executor, and the person or charity to whom the pet is left, is aware of your wishes.

Financial considerations

If you opt to leave your pet to an existing owner, it is less likely that they would require a pot of money for your pet’s upkeep. However, another individual might need some financial assistance in this regard.

Whilst an animal charity is unlikely to need funds specifically for your individual pet, as they will already have their own general funding, a monetary gift to them in recognition of the fact that you are leaving your pet in their care might be appropriate.

Whilst you cannot leave money to a pet, you can leave money to the person who will become responsible for looking after your pet. Any such gift should be by way of a bare trust, to allow the person or charity to use the funds for your pet’s benefit, including food, vet bills, and other such essential costs.

You should think about an appropriate level of funds, as well as how flexible you want to be with the terms under which it can be spent, including any additional wishes you would like known.

Any money left in a bare trust for your pet’s upkeep will need to include a provision about what would happen to any remaining funds if your pet is no longer in need of the trust money. You might want this to revert to your family or friends, or you might want it to be passed to a charity of your choosing.

How we can help

Pets must be considered carefully within a will, and a well-drafted will, prepared by an expert, will ensure that all eventualities are covered.

For further information, please contact Nigel in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Later life and the various bodies you might encounter

If you are helping a loved one who is ill or vulnerable in their later life, whether formally or informally, there are various bodies that you might encounter with whom you will need to liaise to assist you with your loved one’s affairs.

Nigel Miller, Head of Wills and Probate highlights the main organisations and outlines why you may need to deal with them.

Whilst some organisations might be happy to liaise with you on an informal basis, many will not. Even those bodies which are willing to discuss your loved one’s affairs will require proper authority before allowing you to make any decisions for them.

In addition to your loved one’s solicitor, the main organisations that you might need to contact during this stage include, the Office of the Public Guardian and the Official Solicitor. You may also have to deal with the NHS, and your local authority.

Making sure you have the right authority

If you know that your loved one has planned ahead by making a power of attorney, you will need to locate the original. This might be stored with their papers at home, but it is more likely that their solicitor will be holding it for safekeeping. If so, they will need identification from you to release the original. Some solicitors will also require either your loved one’s authority or, if they no longer have mental capacity, some form of medical proof of such lack of capacity.

Office of the Public Guardian

The Office of the Public Guardian is responsible for registering powers of attorney and maintaining records of all the registered powers of attorney in England and Wales.

If you are uncertain about whether your loved one has made a power of attorney, it is possible to request a search of the Office of the Public Guardian’s records. This requires a specific form, which our solicitors can assist you to complete.

If you already know that a power of attorney exists, then you might need to liaise with the Office of the Public Guardian to register it. Again, this is a process with which our solicitors can assist. The process is dependent on the type of power of attorney:

  • if your loved one made an enduring power of attorney, then it will be up to you to register this; or
  • if they made a lasting power of attorney then this may already be registered.

You should check the position with a solicitor to ensure you are fully aware of what is required of you.

The Official Solicitor

The Official Solicitor’s Office is a governmental body which acts on behalf of those who are vulnerable and unable to instruct a solicitor of their own volition.

If the Official Solicitor is appointed, they will be appointed on behalf of your loved one, rather than you, but you will need to liaise and negotiate with them, and our solicitors can assist you with this. The Official Solicitor’s Office is an independent government body.  If the appointment of the Official Solicitor is deemed necessary, the cost of this service will be met from your loved one’s funds.

Acting for your loved one once authority is established

If you are appointed as your loved one’s attorney or deputy, you would then need to deal with various organisations to ensure their affairs continue to run smoothly and that their needs are taken care of. This would include financial institutions, such as their existing banks and any investment companies, as well as potentially the Land Registry and conveyancing solicitor if they have a property that needs to be sold, and a financial advisor who specialises in later life clients to ensure that your loved one’s funds are securely and appropriately invested in a risk-averse way that will yield the best possible returns.

Whilst your loved one’s financial position is important to ensure that they have access to suitable care, if a loved one is ill or vulnerable you may also be concerned about the health organisations you need to contact.

Local authority – social services

Depending upon their financial circumstances, your loved one’s local authority may be involved in ensuring that they are placed in a suitable care home or that suitable at-home care is provided. The local authority will also be key in establishing whether funding for your loved one’s care is available.

Provided you have the relevant authority, you are entitled to attend any meetings with the local authority when financial support is discussed. Before attending any care funding meetings, you should seek advice from a solicitor so that you are fully aware of your loved one’s rights and options. If required, you are also entitled to request that your solicitor attends the meeting with you.

National Health Service (NHS)

Similarly, the NHS may be involved in discussions and decisions surrounding care funding. NHS care funding is available in limited circumstances, but you should obtain legal advice and explore whether this applies to your loved one. You may also be required to attend meetings with NHS doctors, or other medical staff, to discuss aspects of your loved one’s care and how this should be managed.

If you are making decisions on their behalf, it is important that you ensure you are involved in the process all the way along so that you can make decisions on a fully informed basis and one that is in the best interests of your loved one.

How we can help

Acting for a loved one when they are ill or vulnerable can be very rewarding, but it can also be an onerous responsibility. Our solicitors can help you to ensure that your duties as an attorney or deputy are adhered to properly and fully, and that your loved one is cared for in the best possible manner.

For further information, please contact Nigel in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

The perils of a DIY will

The perils of a DIY will

Many people who opt to make a home-made will do so because they think they will save money on legal fees. Unfortunately, this can lead to problems and unexpected costs later down the line for the family who may be left to unravel problems at a difficult time,’ says Nigel Miller, head of the wills and probate team.. ‘DIY wills are sometimes declared invalid, or they can result in problems that require court intervention far more commonly than wills that have been professionally drafted.’

What can go wrong with a DIY will

The worst-case scenario with a home-made will is that the entire document is declared invalid. If this is the case, then your estate will not pass in accordance with your wishes and assets could end up in the hands of someone who you do not wish to inherit.

Alternatively, a home-made will might cause problems in relation to certain aspects of the contents, typically due to not fully understanding the legal requirements for a will. For example:

  • ExecutorsSome home-made wills fail to appoint an executor because the person who has made it incorrectly thought it was only necessary to state who they wish their estate to pass to. An executor appointment is a vital part of the will. Without naming an executor, the remainder of the will may be valid, but pre-existing laws will determine who deals with the estate administration. This could, therefore, be someone who you would not wish to be involved. The same issue can occur if you appoint an executor without thinking about a replacement who could step in if your first choice is unavailable.
  • TrusteesIf your will requires trustees and you do not include the correct legal provision for this, it may result in an expensive and time-consuming court process for suitable trustees to be appointed after your death. The costs of such a process would be taken from the trust assets, leaving less for your beneficiaries.
  • ChildrenIn the case of young children, a will should always appoint a suitable guardian. If the will fails to do so and you die leaving children who are under the age of 18, someone will need to apply to the court to gain legal responsibility for them. Not only could this end up being someone who you do not necessarily trust to raise your children, it would involve lengthy court proceedings which may use up a large amount of your children’s inheritance.
  • GiftsAside from issues with the people who should be named in the will but are not, a DIY will might result in issues with the gifts listed. Beneficiaries of a will should be carefully named or defined. The items to be gifted should also be clearly defined. If there is any doubt as to who the intended beneficiary is, or what the gift is, it can end up being a decision for the court to determine. Again, this is likely to prove costly and time-consuming, reducing the inheritance ultimately available and delaying the time by which this will be paid to your beneficiaries. The court could also rule that the intended beneficiary was someone different to the person you intended.
  • BeneficiariesIt may also be the case that a DIY will does not contain a default provision, which will mean that if the first intended beneficiary has died the estate will end up passing by intestacy instead. Sometimes, a home-made will may also seek to leave a gift to a beneficiary that is not a valid legal entity for the purpose of receiving gifts, which again could result in the intestacy rules applying instead. These may not be in accordance with your wishes.
  • Taxes and costsCertain gifts might require some consideration in terms of specific requirements, such as who should pay any associated costs involved (for example costs of sale or taxes), or the age at which the gift should be inherited. If the will does not specify these aspects, then the law will determine them, and this may end up causing costs to beneficiaries unfairly or against your wishes. It could also result in higher taxes having to be paid, which a solicitor could have advised on and drafted the will to mitigate.

The benefit of using a solicitor to draft your will

Solicitors undergo rigorous training and receive regular updates on case law to ensure that they are fully aware of the correct legal terminology to use in a will so as to give effect to your wishes. They are also familiar with common issues and how to avoid these, as well as relevant tax laws and the appropriate ways in which to structure a will to make the most of any tax allowances.

A solicitor will discuss all of your family and financial circumstances with you to help you make an informed decision about the exact terms of your will so that you can ensure you and your loved ones are protected.

When choosing a firm of solicitors, it is advisable to seek a firm with appropriate accreditations. Solicitors are regulated by the Solicitors Regulation Authority and may have belong to other professional bodies, such as STEP or SFE which demonstrate a greater level of knowledge or experience.

As well as the benefit of solicitors being regulated, individual solicitors and their firms are also required to obtain professional indemnity insurance, giving you a route to redress if anything were to go wrong.

How we can help

Preparing your own will at home may seem like a good idea, but the cost-saving could backfire on your loved ones after your death. It is usually worth spending a small amount upfront to protect your assets and your family in the long term. Our solicitors can help you to ensure that your will is fit for purpose and achieves your desires. For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Wrapping up the administration of an estate after probate

Carrying out the duties of an executor is both a privilege and a burden.  You have been tasked with ensuring that someone’s wishes are carried out after their death, and this can often be more complex and take longer than you imagine.  Some people prepare well for their death and leave their affairs in good order with clear instructions – but this is not always the case, and problems can come from a multitude of directions.

‘Before the administration of an estate can be completed, there are several important final steps to take,’ says Nigel Miller, Head of the wills and probate team. ‘Wrapping up the estate administration involves finalising distributions, as well as dealing with final taxes and preparing the accounts. Taking care with all the last steps thoroughly will help to prevent any last-minute niggles.’

Distributing remaining assets

At this point it is likely that you have distributed any legacies, whether specific items or monetary gifts, and that you are left with the residual pot of assets to allocate to one or more beneficiaries.

As an executor, you must be satisfied that any final distributions are:

  • in accordance with the will or intestacy; and
  • appropriate and in line with the estate assets available.

If there is a will, this sets out the shares each beneficiary is to receive. If there is no will, the intestacy rules must be followed. If you are unclear on the will’s interpretation or you are uncertain what the intestacy rules entail, you should seek advice before making any distributions to ensure you do so correctly.

Paying out too much from an estate could see you personally liable if you are left with insufficient funds to pay creditors or other beneficiaries. It is important to make sure that the figures add up by preparing draft estate accounts and ensuring these are updated throughout the administration, taking into account all of the known liabilities and estate expenses. Only once you are satisfied that all relevant liabilities and expenses can and have been paid should you make the final distributions.

Not paying the beneficiaries enough from estate funds can be equally tricky. In some instances, you will have no choice but to hold on to funds. For example, certain types of investments can take a long time to liquidise, or you may still be trying to establish contact with a beneficiary. If you find yourself holding onto funds that are no longer required for the estate administration, for example if you have retained too much for the payment of liabilities or tax, you will need to account to all the beneficiaries again for the small sums held. This is not only time-consuming but could also prove costly to the estate if you end up requiring legal advice at this late stage.

Paying tax liabilities

Where any estate assets generate income, such as a rental property or shareholdings, it will usually fall to you as executor to calculate and pay any income tax due.

You will also need to consider capital gains tax if assets have been sold for more than their probate value, for example property or shares.

If you fail to deal with the income or capital gains taxes before distributing the estate, it will be your responsibility to pay the tax due if you cannot reclaim it from beneficiaries. If the beneficiaries do not agree to paying funds back to the estate for this purpose, it could become necessary to issue court proceedings which can easily become a protracted and costly exercise.

There may be circumstances where it is more beneficial to appropriate assets to beneficiaries so that they become responsible for the income tax and capital gains tax arising on those assets. Appropriation is similar to transferring an asset however you, as the executor, remain as the legal owner and the beneficiary only receives the beneficial interest in the asset. Appropriation can be done at any point, and can be a useful tax-saving tool, but you should seek advice on this point early to ensure that you are dealing with the estate in the most tax-efficient way for everyone concerned as soon as possible during the estate administration.

If assets are appropriated, then it is important to make sure that everyone is clear about who is responsible for which taxes and that all beneficiaries are fully advised and aware of their responsibilities. If you fail to make a beneficiary aware of the implications of appropriation, you could find yourself personally liable for resulting tax payments.

Estate accounts

Finalising the estate accounts is a vital part of any estate administration. It forms part of your executor’s duties to prepare accounts to be presented to the court on demand. Estate accounts set out:

  • the estate summary, which details the value of the assets and liabilities at the date of death;
  • the capital accounts, which details administration costs, inheritance tax liabilities, and all other capital income and expenses during the administration period;
  • the income account, which details all of the income received and tax due during the administration period; and
  • the distribution accounts, which set out how the net value after expenses is distributed.

To calculate the net value after taxes, you will need to account for:

  • any capital received since death, such as a refund of care fees or council tax;
  • any income received since death, such as interest on bank account or dividends on shares; and
  • executor expenses, such as any valuation fees or the probate application fee and professional costs – such as legal fees, accountants’ fees, conveyancing costs and searches.

As executor, it is for you to approve and sign off the draft estate accounts. Once signed, the final estate accounts should be sent to all the residual beneficiaries for their agreement before distributions are made. Beneficiaries are not required to approve the estate accounts, but it is courteous to seek their agreement to the final accounts.

Unallocated assets

In the event that there are any assets that you have been unable to deal with, or payments that you have been unable to finalise, you should discuss these with the beneficiaries. Ideally you will be able to plan together how best to resolve the situation, including any necessary contingencies for additional payments that might fall due or additional assets that might later be realised by the estate. For example, sometimes foreign shareholdings can prove difficult to access and to sell. If the shares only represent a very small portion of the overall estate, you and the beneficiaries may choose not to pursue the sums, instead agreeing that the shareholders should donate them to a local charity. If there is a beneficiary who cannot be located, you and the other beneficiaries will need to decide who holds on to their share. This could be you, the court, or the other beneficiaries on the proviso that they repay this should the missing beneficiary later appear.

Retaining paperwork

Once the estate accounts have been finalised and the estate can be wound up, it is important to ensure that a copy of the accounts is retained by you and any other executors in case these are required in the future, either by creditors, beneficiaries, or the court.

You should keep the accounts ready for presentation for as long as possible, but in any event for at least six years.

How we can help

Before finalising an estate and making final distribution payments to beneficiaries, it is important to ensure that all final matters are fully concluded, including payment of all tax liabilities, and the preparation of estate accounts.

Even if you have dealt with the estate administration yourself, it can be beneficial to instruct a solicitor for these important final steps, especially if there is any risk of a future dispute. You may still find yourself personally liable if you simply failed to seek appropriate advice.

Our solicitors can help you to ensure that your tax and accounting duties are adhered to properly and fully. For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk 

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Distributing the gifts in an estate after probate

When dealing with the administration of an estate, distributing the gifts is one of the final stages. It is important that executors do not make distributions too soon, to protect themselves and the estate against debts or claims. Executors are advised not to pay out gifts before obtaining the Grant of Probate as time limits for claims against an estate usually run from the date of the grant, rather than the date of death.

‘Often executors and beneficiaries alike do not realise exactly how many different steps are required to administer an estate, but there are several parts of the process before distribution will be possible,’ says Nigel Miller, Head of Wills and Probate with Kidd & Spoor Solicitors in Whitley Bay. ‘Once you are in a position to make distributions from the estate, there are various considerations that will need to be made.’

Beneficiaries

Even though you will not be able to distribute the estate until late in the process, you should already have located all the beneficiaries and notified them that they are due to receive items or money from the estate. You should, at this stage, check that their contact details remain the same and check their bank details in readiness for payment of the sums due to them.

If you have not yet attempted to locate any beneficiaries, now is the time to do so. If you have been unable to locate any beneficiaries, or you are now unable to re-establish contact with them, you will need to hold onto any items or money due to them until they are found, or until you have taken satisfactory alternative steps.

You must take all reasonable steps to locate beneficiaries. If you cannot locate a beneficiary yourself, you should seek help from a reputable tracing agent. If the tracing agent is also unable to locate the beneficiary, there are options available to you to ensure that you are not forced to hold on to that beneficiary’s share of the estate forevermore. Some of these options involve reaching an agreement with other beneficiaries, some will involve making an application to court. A solicitor can help you to identify the most suitable option for your circumstances and help facilitate the process.

Communications

Beneficiaries often do not understand why things take so long, so proactive communication with beneficiaries is key to the prevention of frustration.

You should let them know as soon as the grant of probate has been received and when they can expect to receive their gift.

No beneficiary is obliged to accept a gift left to them in a will. It is always worth checking with beneficiaries if they actually want what has been gifted to them, especially if it is a particular item.

Before distributing gifts to beneficiaries, make sure you check how they would like to receive the gift. For example, if the beneficiary is due to receive shares, they might prefer to receive the shares themselves so that they can retain these as an investment. Alternatively, they may not wish to deal with the complexities of shareholdings and simply prefer for the estate to sell the shares and then to receive the monetary value instead. You should always be led by the beneficiary’s preferences and wishes. If a beneficiary has no preference as to whether they receive a gift of shares as shares or as money, you should consider whether selling would be disadvantageous. For example, if the shares have recently dropped significantly in value but they may well go back up, it might be more advantageous to transfer the shares to the beneficiary so that they can retain them until they increase in value.

Unwanted gifts

If the beneficiary does not wish to receive it, they can disclaim their gift, which could then leave the item available for another beneficiary who does wish to receive it as part of their share.

Disclaiming a gift requires a formal written document, which a solicitor can help you to arrange.

Practical distribution of gifts

Where specific items are to be shipped to a beneficiary, the will should specify who is to pay the cost of the shipping. This is particularly important if the beneficiary is based overseas or when the shipping would be more expensive than usual for any other reason.

Until gifts can be distributed, the executor should keep these somewhere safe and should insure items of significant monetary value.

For gifts of shares, the cost of selling or transferring these would be borne according to the terms of the will. If the will does not specify who should pay the costs, it will be for the beneficiary of the shares to bear the burden.

Timing

If some assets are taking a long time to realise, you may be under pressure from beneficiaries to distribute whatever you can. Specific gifts, such as jewellery or artwork, can be passed on to the recipients as soon as it is available, so long as the gift is not under dispute. You can also make interim distributions to those beneficiaries who are due to receive the residue of the estate whilst you are awaiting receipt of any remaining assets.

How can we help?

As with all stages of estate administration, any distribution must be in accordance with the will (or intestacy rules) and in the best interest of all the beneficiaries. If you are unsure about what you are allowed to distribute, or if you find yourself dealing with any difficult beneficiaries, our solicitors can help.

For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

When should a lay trustee consult a solicitor?

‘Trusts are typically used to preserve assets for loved ones in private client estate planning, and many trusts are fairly inactive a lot of the time,’ says Nigel Miller, Head of the Wills and Probate team. ‘Often action is only required when the trust is first set up, when assets are distributed, or when the trust needs to be wound up. These events involve strict legal requirements, and you must fulfil your obligations as a trustee, so obtaining advice from a solicitor at key times will help you to ensure full compliance with these duties.’

Requirements during the trust period

When a trust is set up, or if changes are made to it during its term, you must register the trust or update the trust registration. The Trust Registration Service is a legal requirement and it is the trustees’ duty to register the trust, failing which you may have to pay a fine for which you would be personally liable. If you have been appointed as a trustee for a new trust, or if you are a trustee of an existing trust which has not yet been registered, you should contact a solicitor to help you navigate the Trust Registration Service.

If the trust is subject to income or capital gains tax, you will need to submit an annual tax return to report the tax due to HMRC. Tax returns should be completed carefully, and you should seek advice as to any tax mitigation that might apply to the specific trust for which you are acting as trustee. It may be that the type of trust or the assets held within it have special tax benefits, and you could find yourself personally liable to beneficiaries if tax is overpaid as a result of failing to obtain legal advice.

Inheritance tax should also be considered when setting up a trust, paying in further monies, or paying money out. Our solicitors can help to ensure that inheritance tax is fully considered and reported.

Whenever you make a decision as a trustee, for example deciding to distribute assets, to add discretionary beneficiaries, or to change the trustees, that decision must be recorded. This might take the format of straightforward trustees’ minutes, or it may require a formal legal document.

Once a decision has been reached, and recorded, the implementation of that decision will usually require a deed. A deed is a specific formal legal document, and it needs approval from and signature by all relevant parties. The trustees will need to sign, and in certain circumstances so will beneficiaries and/or the person who originally set up the trust, as well as any new parties who are being added. A solicitor can help to draft the deed and ensure that it is legally compliant.

Requirements when the trust ends

When a trust ends, the Trust Registration Service needs to be notified and any final tax return submitted to HMRC. This will probably be the time when further inheritance tax is triggered, which again must be separately reported to HMRC.

Much like when a key decision is made during the trust period, a deed is required to formally wind up the trust and bring it to an end, so it is advisable to consult a solicitor on this final step.

How can we help?

It is relatively straightforward to be a trustee while the trust is simply accumulating income, but when action is required matters become far more complex. As a trustee, you are obligated to adhere to certain rules and requirements, and your decisions should be recorded and actioned appropriately.

Our solicitors can help you to ensure compliance in your role, to accurately draft relevant documentation, and to liaise with relevant organisations. For further information, please contact Nigel in the Wills and Probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Making a best interests decision under an LPA

If you have been asked to be an attorney for someone under their power of attorney, whether for finances or health and welfare, then they have placed their trust in you to act in their best interests at all times. This will also be the case if they did not have a power of attorney and the Court of Protection has appointed you as a deputy.

‘In practice, this can be easier said than done with difficult decisions such as whether the person should be cared for at home or in a nursing home setting, whether they should receive specific medication, or whether their house should be sold,’ says Nigel Miller, Head of Wills and Probate at Kidd & Spoor.

Fortunately the Mental Capacity Act provides guidance and sets out various factors that you must consider when deciding what is in another person’s best interest. It is important to follow what the Act says, and a solicitor can help you to understand your obligations under the law.

Mental Capacity Act factors

The key things to consider when making a best interests decision are:

  • whether the person is likely to regain capacity to make the decision at some point in the future;
  • the person’s general beliefs and values;
  • the person’s past and present wishes and feelings;
  • whether the person has made any written statement about their wishes;
  • as far as is possible, you must also permit and encourage the person to participate in their own decision making; and
  • you must also take into account the views of anyone who is involved in the person’s care.

If the person is likely to regain capacity, then you should factor this into any decisions you make, ensuring that they are as temporary as is suitable for the circumstances. Depending on the decision to be made, and the surrounding circumstances, it may also be appropriate to delay the decision if the decision cannot be temporary, or would be significantly life-changing, and it is not urgent.

If they have some capacity to participate, you should make sure that they are given the opportunity to do so as far as possible. For example, somebody may have capacity to decide what they want to eat for their dinner but not what medication they should take.

How to gauge a person’s wishes and feelings

Ideally, if you are appointed as someone’s attorney, you should discuss with them in advance what they would like to happen in various situations. However, this is not always possible (for example, if you are appointed as a deputy, the person will have already lost capacity and you may no longer be able to have certain conversations). Circumstances can change over time, and questions may arise which you have not considered.

Whilst any previously discussed wishes and feelings (or any that the person has recorded in writing) would be the most important factor, some useful guidance from previous cases in this area of law is that the following should be considered:

  • what was the person like before they lost capacity?
  • what was their job or their hobbies?
  • what was important to them?
  • what were their likes or dislikes?
  • did they have any specific religious, spiritual, or ethical beliefs?

Involving others in a best interests decision

If you have co-attorneys, you should ideally all come to a best interests decision unanimously. Even if you are acting alone, it is useful to consider the thoughts of the person’s family and friends.

Where the decision to be made is one of a medical nature, you should also bear in mind the views of medical staff involved in the person’s care. Key questions to ask the medical professionals are what the risks and benefits of each possible option are, the likelihood of those risks or benefits occurring, and the seriousness of each risk and benefit.

If you are concerned that the correct decision may not be made, you should request a best interests meeting with medical staff. This can greatly assist with the decision making process and help to reduce the pressure you may feel around having to make such a decision on someone else’s behalf.

What if there is a disagreement?

Best interest decisions should be taken carefully and with consideration of all the relevant circumstances. One person’s best interest may not mirror another’s, even if they are a couple or they are closely related or otherwise heavily involved in one another’s lives.

If there is more than one attorney and you cannot agree on something; whether one can make a decision without the other(s) will depend on the way the Power of Attorney was set up. If attorneys are appointed jointly and severally, one may make decisions and authorise actions without the others necessarily agreeing. Practically, this is likely to cause upset, and you should always seek to agree in the first instance or opt for some third-party input or mediation if agreement cannot be reached.

If you are appointed under a Health and Welfare Lasting Power of Attorney, the final decision lies with the attorney(s). This does not, however, prevent any person from contesting your decision if they believe it is not in the best interests of the person you are acting for.

In the case of continuing disagreement, an application can be made to the Court of Protection to intervene and make a ruling.

How can we help?

If you are struggling with making a best interest decision or you wish to understand the law in this area a little more clearly, our solicitors can help. If you have concerns about the actions of another attorney, or any decision they have made, our litigation team can assist.

For further information, please contact Nigel in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk

Best practice when acting as an executor

‘Being an executor is an important role and a serious responsibility,’ says Nigel Miller, a Head of wills and probate with Kidd & Spoor in. ‘Even a simple estate can be more difficult than many people realise and you should ensure that you understand the role and are willing to take on the responsibility before starting to act.’

Seeking advice at the outset from an experienced solicitor is the best way to understand exactly what being an executor entails and to help you reduce the chances of anything going wrong along the way.

How to ensure a smooth estate administration process

Good organisation helps things to run smoothly from the outset. You should think about the steps that will be required and ensure that you are prepared for each part of the process. Professionals can help to guide you.

Solicitors know how to run an estate and instructing a solicitor to deal with the day to day administration can relieve a lot of pressure. Involving a solicitor can also be useful for facilitating introductions to other reputable professionals that you may need along the way, such as estate agents, valuers, auctioneers, or tradespeople.

It is important to make sure that you have the correct will and any other relevant legal documents. You should undertake a thorough search of all the person’s paperwork to ensure you are working from the most recent legal documents. In addition, a solicitor can help you to search the records of local solicitors or other companies that may hold original testamentary documents.

Once you have established that you have the correct will, you need to be clear as to its terms and the relevant laws for dealing with the will. Ignorance is not a defence to mistakes made by an executor if they could have sought advice. As such, you could be personally liable if the law is misinterpreted or misapplied.

Communication is key and you should talk openly to others involved in the estate from the outset. This may include co-executors, beneficiaries, or other family members. Being open and honest can help to prevent, or at least minimise, disputes. However, if any dispute does arise it is important that you remain impartial whilst still communicating clearly with all parties. A solicitor can help you to navigate the legal and practical difficulties of an estate dispute.

Keeping a list of all the assets and liabilities from the beginning of the estate administration (and adding to that list as and when you become aware of any additional financial details) will not only mean that you have a clear record of the assets that exist and their values, but it will also allow you to report to the beneficiaries with ease.

You should obtain a professional valuation for any personal items (such as jewellery) as soon as you can. For probate and inheritance tax, it is important that valuations are accurate for the date of death. The sooner a valuation is obtained, the easier it will be for the valuer to accurately assess this. A solicitor can recommend a reputable valuer. Once valued, personal items should be insured and stored safely until they can be passed to the beneficiaries. Again, keeping a list is a useful tool. Once you are ready to pass items on to the beneficiaries, you should do so in person wherever possible. If it is not possible to personally hand over items, you should send them via secure postage or courier. If items are lost and you have not done your utmost to keep them secure, you could find yourself personally liable for the beneficiary’s loss.

As well as small personal items of value, you should also make sure that any property or vehicles are insured and secure so that if any damage occurs you will not be personally liable for this. Property should also be checked regularly by you to ensure that no damage or loss has occurred. It is likely to be a strict term of the insurance policy that the property is checked at regular intervals.

Finally, remember that you may need to be patient. Estate administration often takes longer than you might think, not least of all because you are reliant on other institutions whose timescales are out of your control. It is far more important that you do a thorough and accurate job than it is to have the matter dealt with quickly. Rushing can cause things to be overlooked and, if you have finalised and distributed an estate too soon, you could find yourself facing disappointed creditors or beneficiaries whose money must be paid somehow.

How can we help?

As an executor, it is imperative that you know the rules you must adhere to and that you are able to commit fully to the role. If you are unsure about taking on the role in the first place, or you would like some help dealing with the administration of the estate, our solicitors can help you to ensure that the estate is administered properly and that you are protected from personal liability.

For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email nm@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Avoiding common problems with beneficiaries

Whether the beneficiary of an estate is entitled to inherit a small personal item, a share or even the majority of the assets of the person who died, it can be a stressful time for them while they wait for probate to come through. Delays at the probate office are outside your control, but if you are an executor there are steps that you can take to avoid some common problems which can arise when dealing with beneficiaries.

Nigel Miller, a Head of  wills and probate team with Kidd & Spoor Solicitors explains, ‘No matter how large or small a beneficiary’s entitlement, problems can sometimes occur if assets are lost, if a will is unclear or has been poorly drafted, or if communications and trust break down. In such cases, it is a good idea to instruct a solicitor from the outset, as they can help to correctly interpret the will and can act as an intermediary between you and the beneficiaries.’

Nigel looks at some of the common problems and how to avoid them.

Be clear about your legal duties

The first thing to do is to read the will carefully to make sure that you are aware of its terms and understand these. If there is no will, then you should familiarise yourself with the intestacy rules and seek legal advice if at all unsure.

Executors have many very strict duties and ignorance is not a defence against potential personal liability if these duties are not adhered to.

Communications

Executors have a duty to administer the estate in accordance with the interests of the beneficiaries. It is good practice to keep beneficiaries informed of progress, so that they think things are not being held up due to inefficiency, unnecessary delays, or anything more sinister.

You should communicate with the beneficiaries as early as possible in the process. Beneficiaries are entitled to be told that they are due to receive a share of the estate, as well as exactly what that share entails.

Avoid a conflict of interest

Appointing someone who is a beneficiary of a will as the executor is common and does not in itself give rise to a conflict of interest. However, any actions you take and decisions you make in respect of the estate as executor must be in the interests of the estate and all beneficiaries.

If you are aware of existing issues between yourself and any of the beneficiaries, then you should address these early to avoid being accused of any wrongdoing along the way. For example, if you have had any personal disagreements with another beneficiary in the past, you could reach out to ensure that person that you take your role as executor seriously and that you intend to act in accordance with the will and for the benefit of all beneficiaries.

If you are appointed as executor alongside someone else, you may wish to ask your co-executor to take the lead in any communications with the difficult beneficiary to ensure that your personal issues do not get in the way of the estate administration. Alternatively, if you are the sole executor and you do not feel comfortable dealing with the beneficiary in question, you may appoint a professional to act on your behalf. This could simply be a case of the professional being appointed to deal with day-to-day matters relating to the estate administration, or you could appoint them as your attorney to act in your place.

Missing items

If you are the executor of a will that includes gifts of personal items then, you will need to deal with those items according to the specific terms of the will.

It is important to ensure that any property is not cleared too hastily. You, as executor, are responsible for searching for all personal items mentioned in the will, so you should not let others go through belongings until you are confident that you have read, and understood, the terms of the will and that you have secured all personal items mentioned.

If an item is cleared, or taken by another person, you could find yourself personally liable to the beneficiary for whom the item was intended.

Problems can arise if any items have been lost or given away during the testator’s lifetime. If you cannot locate any items mentioned in the will, what happens with that beneficiary’s entitlement is dependent on the exact wording of the gift. Whilst some types of gift would simply fail, others might have to be honoured in some other way instead, such as a monetary equivalent. If you have taken all reasonable steps to locate the item and cannot, then a legal professional can help you to determine the appropriate next steps according to how the gift is worded. If you mistakenly deem that a gift has failed when it should in fact have been substituted with a monetary equivalent, you would be personally liable for the beneficiary’s loss.

Interpreting the will

Problems can arise if a will was poorly drafted or homemade, especially if the terms of the will are unclear and you may struggle to decipher exactly who gets what from the estate.

Alternatively, a will that was well drafted and perfectly clear could be based on misunderstood instructions. Perhaps, the testator made promises to family members or friends during their lifetime which have not been honoured in the will.

Either way, you may end up dealing with a potential beneficiary who is disgruntled and you will need to tread very carefully to avoid things escalating into a legal dispute.

As executor, it is up to you to ensure that the will is correctly interpreted. If you are aware of any potential dispute, you should speak with everyone concerned to ascertain all the different positions. If you do not have the appropriate legal expertise, you should seek advice. If you distribute the estate incorrectly, lack of knowledge will not constitute a valid defence in any claim against you if you failed to obtain advice,

Exclusions

It could be that certain family members or friends were deliberately left out of the will, or perhaps there is no will and certain people are upset because intestacy laws do not provide for them.

You should listen to any concerns that beneficiaries or potential claimants may have, but avoid taking sides or making any statements about your views on their claim. If a case is brought forward, your words could be used against you or another beneficiary.

Aside from disappointed beneficiaries, a claim could be made that the will is invalid due to the testator not having had the requisite capacity when it was made, or being placed under undue pressure to make the will. In such a case, whilst it is important to communicate openly and to share what information you can about the will, you should ensure that you are only providing factual information and not opinions. If a claim is anticipated, it is important that you remain impartial between the existing beneficiaries and those seeking to make the claim.

Calculations and distribution

Towards the end of the estate administration process, beneficiaries should be provided with estate accounts. Keeping beneficiaries informed throughout goes a long way to help prevent disagreements.

A beneficiary may disagree with the valuations you have included for certain items, for example. Whilst it may not be practical to discuss every single estate asset with each beneficiary and to ensure their agreement to valuations obtained, you should make sure that you obtain professional valuations of all items in case of a later dispute arising.

How can we help?

The role of executor is a serious one that attracts strict requirements.

Professional legal advice will help you to ensure that you are aware of the legalities and that you deal with the estate, including liaising with beneficiaries, correctly and fully. Our solicitors can help you to be sure you have completed all steps required and to navigate any disputes.

Contentious probate is increasingly common and is tricky to deal with. If you receive any indication that someone may make a claim against the estate, you should contact us immediately.

For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email nm@kiddspoorlaw.co.uk.

Could your digital art or crypto assets be lost to obscurity?

Part of the success of TV shows like the BBC Antiques Roadshow is the thrill when a long-cherished family heirloom turns out to be surprisingly valuable, for example a piece of china that has been on display in the home for many years. Occasionally, a rare masterpiece hits the headlines in the art world, such as the Caravaggio painting found in an attic in Toulouse in 2014; but if your choice of art is NFTs (non-fungible tokens) or you invest in cryptocurrency, then these assets may never be found if you fail to take appropriate steps to protect this part of your legacy.

‘Cryptocurrency, NFTs and other digital financial assets have grown in popularity hugely over recent years,’ says Nigel Miller, Head of the Wills and Probate team with Kidd and Spoor Solicitors in Whitley Bay. ‘With some NFTs changing hands for eyewatering amounts of money, you do not want these assets to be lost to obscurity. It is important to ensure careful estate planning and a well-drafted will, so that everything passes according to your wishes.’

How are crypto assets lost?

If you die without making the existence of your cryptocurrency or NFTs known to your executors and loved ones, it can easily be overlooked. Problems can also arise if you lose mental capacity.

Digital financial assets are owned exclusively online, and the platforms that hold them are unregulated. There is no physical, tangible asset that can be realised in the way that you are able to withdraw cash from a bank account and each platform is entitled to operate by its own rules and systems. This makes it particularly tricky to trace and prove ownership of digital financial assets without the appropriate information.

Ownership of a digital financial asset is proven by what is referred to as a ‘private key’. This is, typically, a long series of randomly generated numbers, letters or words. If the key is lost, or you are unable to remember it or find it, then there is no way to access or transfer the asset as there is no password reset facility.

This can make things extremely challenging. If you are the executor of an estate that you believe includes digital financial assets, or an attorney under a power of attorney, a solicitor can help you to consider the practical steps to take.

Documenting your wishes

When making your will, you should include a reference to your digital investments. It is not necessary to specify the exact holdings, but you should refer to the type of holding and the company it is held with.

You then need to consider what you wish to happen with these assets.

  • If you intend for a specific person to receive those assets, you should name the asset and the person you wish to receive it in the will itself as a specific legacy. These types of gifts require particular wording to ensure legal validity.
  • If you simply intend for the value of your digital financial assets to pass to your residuary beneficiaries, then you need not reference them specifically in the will, but you should set them out in a separate document.

 

How to ensure your digital financial assets are not lost

Usually, it is inadvisable to write down passwords but, with cryptocurrency that can only be accessed via the private key, it will be imperative that you leave a full list of your private keys so that the assets can be called in and distributed. The security of these details remains paramount during your lifetime, so you should keep the list somewhere safe that only your executor knows about.

A will made by our solicitors will be stored securely on your behalf, and we can also store your list of private keys and pass this to your executor after you have died, or to your attorney in the event that you lose mental capacity.

What other steps should you take to secure your digital financial assets?

It is not just when you die that your crypto assets might need to be accessed. For example, if you lose mental capacity and require care then your attorney may need to sell some digital investments to help pay for this.

As well as making a will, you should ensure that your lasting power of attorney for financial affairs includes a reference to your digital financial assets, stating where they are held, and how they can be accessed so that your attorney can use these funds for your benefit.

How can we help?

When collecting in the assets of an estate, digital investments are much more easily overlooked and lost on death than traditional assets. To avoid this situation, you should make sure that their existence is mentioned in your will and any power of attorney, and that your private keys are safeguarded and stored for your attorney or executor. It can also be a good idea to discuss your assets with your executor and attorney ahead of time, verbally ensuring that they are aware that your estate includes digital financial assets.

Professional legal advice and a professionally drafted will protects your assets for your loved ones. For further information, please contact Nigel Miller in the wills and probate team on 0191 297 0011 or email wb@kiddspoorlaw.co.uk.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.