In situations where a person dies without a Will, that person is considered to have died ‘intestate’ which means the ‘intestacy rules‘ then take effect.

The intestacy rules are a statutory order as to who will benefit from your estate if you have not made such provision yourself by way of a Will. Following this statutory order, if you do not have any children then your spouse will inherit your estate entirely. If you do not have a spouse but you have children, then your children will inherit.

If you have both a spouse and children, your spouse will not inherit the entirety of your estate. In this situation your spouse will inherit the first £270,000 of your estate and all personal possessions. The rest will be shared as to one half for your spouse and one half equally between the children. There are other categories of beneficiaries depending on your family circumstance with ultimately the Crown being the beneficiary.

The only way in which you can therefore ensure that your wishes are carried out is by having a Will.

If you believe you have a valid inheritance dispute and want to contest probate it is important that you instruct contentious probate solicitors as soon as possible.

Alternative Dispute Resolution (ADR), particularly mediation, should always be considered in the first instance.

If the dispute cannot be resolved by ADR, your Will dispute solicitors will need to issue a claim form to court supported by a pleaded case, following which your opponent will serve a defence. The court will then lay down a directions timetable to trial, which will require each party to disclose documents and exchange witness evidence.

Upon the death of a person, any Inheritance Tax owed to HM Revenue & Customs is a debt of the Estate. As a liability of the Estate, the person dealing with the administration is responsible for ensuring the requisite amount is paid prior to distributing the proceeds of the Estate to beneficiaries.

Inheritance Tax is payable if the Estate exceeds the nil-rate band value of £325,000 and anything above that nil-rate band is then taxable at 40%. In cases where the second spouse of a married couple/civil partnership dies, the unused nil-rate band from the first death can be combined to give the Estate a tax free total of £650,000.

From 6 April 2017 a Residence Nil Rate Band was introduced, currently set at £175,000, which can be utilised if the deceased owned a residential property which passes directly to their lineal descendants on death.

A Lasting Power of Attorney (LPA) is a legal document which allows an individual, the ‘donor’, to appoint attorneys to manage their affairs and make decisions on the donor’s behalf. There are two different types of Lasting Power of Attorney.

The Lasting Power of Attorney for health and care decisions relates to matters such as decisions regarding treatment, medication, care homes and the decision to give your attorneys the right to refuse life-sustaining treatment on your behalf. The Lasting Power of Attorney for property and financial affairs relates to financial decisions such as opening bank accounts, dealing with direct debits, dealing with receipts of pension/benefits and also allows for the attorney to make decisions relating to property on behalf of the donor. The two Lasting Powers of Attorney are not mutually exclusive and you can register one without the other.

A Grant of Representation is a legal document issued by the Court which enables the Estate of the deceased to be administered. There are several different types of Grant of Representation. One is the Grant of Probate which is used when the deceased has left a Will and it enables the Executors named in the Will of the deceased to administer the Estate in accordance with the Will terms. If the deceased died without a Will then the deceased’s next of kin have to obtain Letters of Administration in order to administer the Estate of the deceased.

Trust Funds can be an effective way to provide for your family both now and in the future whilst ensuring that maximum use is made of the tax planning available. They are particularly useful when planning how assets should pass from one generation to another especially when family structures are complicated by divorces and second marriages. They can be used in a variety of ways which include:

• To support someone who is unable to manage their money, to ensure that they are looked after, even when you are no longer able to help them yourself.
• To benefit mentally or physically handicapped beneficiaries providing them with a secure future.
• To make sure that your own money is used to look after you if you are unable to look after yourself.
• Providing financial stability in the future for your loved ones by guaranteeing an income for them.
• To ensure your money and assets are passed on in the most tax efficient way and to help mitigate Inheritance Tax.
• For advance planning using your home and other assets with care home fees in mind.

New rules were introduced on 6 October 2020, as part of the UK’s implementation of the Fifth Money Laundering Directive (5MLD). The rules extend the scope of the trust register to all UK and some non-UK trusts for trusts that are currently open, whether or not the trust has to pay any tax, but with some specific exclusions. These rules extend to all new trusts that meet the registration criteria.

Trusts that need to be registered are broadly all UK express trusts, unless they are specifically excluded.

Certain trusts do not need to be registered unless they are liable to pay UK tax.

This can be a complex area and each trust would need to be considered under the HMRC criteria for trusts.

Trustees or their agents are required to register the trust online using the HMRC Trust Registration Service. Once the trust has been registered ongoing maintenance and compliance for the trust for tax purposes will be dealt with using the online Trust Registration Service.