Understanding Testamentary Capacity

The number of Wills being challenged over the past decade has risen consistently, and it is easy to see why.  The stakes are much higher given the increase in house prices, meaning that many peoples assets are now worth hundreds of thousands (if not millions) of pounds. Furthermore, the younger generation are struggling to get on the housing ladder, and are increasingly reliant and / or expecting to receive an inheritance to do so. At this point, you may be wondering what Will disputes have to do with testamentary capacity. The the answer is that if a Will is not entered into with full understanding, it may be challenged and be declared invalid. 

What is testamentary capacity, and how is it established?

The word ‘testamentary’, in this case, refers to the act of bequeathing through a Will.  ‘Capacity’ refers to the cognitive ability of the testator (the person making the Will) to enter into the Will in a way that they fully understand.  Hence if a Will is entered into by a person who lacks the mental capacity to comprehend the implications of what is being stated, this would be considered to be a lack of testamentary capacity and will likely render the Will invalid. 

If the last Will is declared invalid the estate will be administered under the terms of the previous Will (if one exists) or under the rules of intestacy. This is a formula sued to distribute an estate if there is no will.  

Solicitors and other legal practitioners specialising in Wills must check that they are satisfied someone has testamentary capacity when taking instructions for a Will for a client. By doing so, its validity is less likely to be challenged following death. 

The risk with online and DIY Wills is that, in addition to the lack of professional legal guidance to ensure the Will is drafted to reflect all of the necessary provisions and life scenarios for your situation, it will lack evidence that checks were undertaken to verify capacity.  A professional Wills Solicitor will go out of their way to secure the proof needed, including requesting contemporaneous medical opinion, asking a medical professional to witness the Will, and attaching any other proof of capacity to the Will.

There are two main tests used by the Courts to prove testamentary capacity:

Banks v Goodfellow Test (Case law test)

 This common law test relates to the case of Banks v Goodfellow (1870), which used the following criteria to test for the existence of testamentary capacity:

  • The testator must understand the nature of making a will and its effects.
  • The testator must understand the extent of the property of which they are disposing.
  • The testator must be able to understand and appreciate the claims to which they ought to give effect (i.e. who can bring a claim against the Will).
  • The testator must have no disorder of the mind that perverts their sense of right or prevents the exercise of their natural faculties in disposing of his property by Will.

Despite being over 150 years old, the Banks v Goodfellow test has stood the test of time due to its clarity, the fact it is based on case law principles going back three centuries, and because it covers the elements necessary to establish an all-round understanding of what is being entered into.

The Mental Capacity Act 2005 (MCA 2005)

 The MCA statutory test uses five core principles to establish mental capacity, as follows:

  1. A presumption of capacity – everyone has the right to make his or her own decisions and must be assumed to have capacity unless proved otherwise
  2. The right for individuals to be supported to make their own decisions – people should be given the necessary assistance before it can be concluded they are unable to make their own decisions
  3. Individuals have the right to make what might be seen as eccentric or unwise decisions
  4. Best interests – anything done for or on behalf of people without capacity must be in their best interests; and
  5. Least restrictive intervention – anything done for or on behalf of people without capacity should be the least restrictive of their basic rights and freedoms.

The MCA 2005 test for capacity was not intended to replace the Banks v Goodfellow test; rather the intention was to allow judges to make their own decision as to which would be most applicable.  However, the High Court case of James v James and others [2018], confirmed that the Banks v Goodfellow test should be applied when assessing mental capacity in relation to making a Will.

Ensuring testamentary capacity for your Will

Establishing testamentary capacity at the time of Will creation will mitigate the potential for it to later challenged.  For solicitors, ensuring their client understands what they are entering into and providing supporting evidence where necessary is a paramount consideration.  By failing to undertake this key step, a well-drafted Will, with all elements considered, witnessed, and signed correctly, could be rendered useless via a challenge.  Don’t cut corners and allow your Will to be judged invalid due to concerns over capacity – your loved ones deserve certainty that your wishes were made with sound mind and judgment.

If you would like to discuss any of the above issues, please contact Ian Pearl, on 020 8349 5506 or by email

Please note that this blog is intended for information purposes only and does not constitute legal advice. 

What To Consider When Looking For The Best Inheritance Tax Solicitors

For some people, it is hard to think about what will happen to their assets after they die. Others want to ensure that their legacy is passed on in the most efficient way so their heirs can benefit from what they have worked hard to accumulate during their lifetimes. Whichever camp you fall into, pertinent, up-to-date advice from an inheritance tax solicitor can be invaluable. Everyone needs to consider making a will to ensure their estate is dealt with smoothly and in accordance with their wishes after their demise. But if your estate looks set to be valued at over £325,000, you will especially benefit from guidance from inheritance solicitors.

Inheritance tax (commonly abbreviated to IHT) is the tax that’s payable after the death of an individual on the money, property, and possessions they leave behind – their estate. It’s based on the value of the estate at the time of death, but can also include gifts given by the individual in the seven years preceding their demise. The value of the estate is calculated after any outstanding debts and funeral expenses have been deducted.

At present, the IHT threshold is £325,000, though changes to the whole framework are imminent. Currently, there’s no tax payable on the first £325,000 – this is known as the nil-rate band or NRB. If you have a spouse or civil partner, then you can pass the entirety of your estate to them tax-free, and they then benefit from an increased IHT allowance of up to double (i.e., £650,000) on their own death.

But otherwise, any value of the estate over £325,000 is taxed at a rate of 40%. This is usually settled by the executor of your will, if you have one, or administrator of the estate if there’s no will in place.

Other considerations are many, but include the recent Transferable Main Residence Allowance (TMRA), which came into force in April 2017. This allows the deceased to pass on a property in which they have been living to descendants, raising the tax-free allowance to £500,000 in total (£1 million for those who are married or have civil partners).

Reducing Liabilities Through Inheritance Tax Planning

what services do inheritance tax solicitors offerOf course, no-one likes paying more tax than they have to, and this is often where consulting inheritance tax specialists in the UK can be beneficial. It’s important that you do this at an early stage if you think your estate will be liable for IHT.

The above description of IHT and associated matters is the briefest of summaries and only scratches the surface of the complex framework surrounding inheritance tax. The landscape is likely to change in the near future too, so it’s vital that you seek legal advice from qualified and experienced experts before taking any action yourself. HMRC imposes severe penalties on breaches of tax legislation and you or your heirs could end up in trouble if you inadvertently break the rules.

Inheritance tax planning solicitors will first gain an overview and more detailed information about your specific circumstances. They will then detail options for ways in which you can manage your affairs now and at the time of your death to limit tax liabilities and benefit your heirs as much as possible.

Among these will be consideration of making a will; of giving tax-free gifts; of making charitable donations; establishing a family trust; making specialist investments; taking out insurance to cover the costs of IHT; gifting property to children or a loved one, and more, all of which can be tailored to your own unique circumstances.

Expert Legal Advice From Specialists

As noted above, IHT can be a minefield and the costs of getting your affairs wrong can be huge in financial terms, not to mention costly in terms of the emotional distress on your heirs that can result from dealing with HMRC at an already difficult time.

However, the cost of an investment in sound legal advice at an early stage can be more than offset by the savings you’ll make in tax liabilities in the future.

Come to OGR Stock Denton, where we have been advising on legal matters for personal and business clients for over 50 years. Our consultants will assess your situation and offer the best legal advice for your circumstances, explaining everything simply and clearly without blinding you with legal jargon.

Remember, while a difficult subject to contemplate, the sooner you start putting your affairs in order, the easier it will be for your loved ones after your demise. Call 020 8349 0321 today to make an appointment to speak to one of our experienced inheritance solicitors.

FREQUENTLY ASKED QUESTIONS

Can solicitor’s fees be offset against inheritance tax?

which inheritance tax solicitors to hireLiabilities and debts incurred prior to the deceased’s demise, such as mortgages, credit card, and household bills, can be deducted from the chargeable estate, as can funeral expenses. However, other costs that have been incurred after death, like probate and fees for solicitors or death tax lawyer services cannot reduce the value of the estate for Inheritance Tax (IHT) purposes.

How much do solicitors charge for being executors of a will?

When sourcing a lawyer to act as executor of an estate, ask how they will charge for carrying out the service. Some charge an hourly rate, while others will base their fee on a percentage of the value of the estate, usually between 1% and 5%, plus VAT.

How do you calculate inheritance tax?

The threshold for IHT is £325,000. If your estate is worth less, it’s classed as being in the Nil Rate Band (NRB). You’ll typically pay 40% tax on any amount above £325,000, unless the entirety is left to a spouse or civil partner, or an exempt beneficiary like a registered charity. Inheritance tax solicitors can advise further.

What is the UK inheritance tax threshold?

At present, the inheritance tax (IHT) threshold is £325,000 per individual, but the government is planning some changes in 2021. Currently, if you have a spouse or civil partner, any unused NRB on the death of the first person can be transferred to the survivor, increasing the amount of NRB available to up to £650,000.

Will my children have to pay inheritance tax?

Your children pay inheritance tax at 40% on any amount you have left them above the £325,000 personal inheritance tax-free allowance. You can establish a trust before death to reduce the percentage paid to 20%, but if you die within seven years, an additional 20% is charged. The law is complex, so seek advice from a family tax planning attorney.

how can inheritance tax solicitors help youA Guide To Inheritance Tax

Inheritance tax is a highly complex area. Broadly speaking, only a small percentage of estates are large enough to attract IHT – those with a value of over £325,000. Assets that count towards this sum include money in a bank, property and land, jewellery, cars, shares, pay-outs from insurance policies, and jointly owned assets. If your estate falls below the £325,000 threshold; you leave everything above the threshold to your spouse or civil partner; or you leave everything above the threshold to a charity or other exempt beneficiary, then there is normally no tax to be paid.

The recently-introduced Residence Nil Rate Band, aka home allowance, may also apply. If your main home or a share of it is passed to children or grandchildren, that can increase the amount that can be passed down tax-free. Planning ahead with the help of inheritance tax solicitors in London can mitigate tax paid.

Overview Of Inheritance Tax

The deceased’s estate usually pays 40% inheritance tax on any amount held over £325,000. If you’re a beneficiary, you don’t generally have to pay tax on an inheritance unless the estate hasn’t or can’t do so. If you inherit assets, you may have to pay income tax in future years – on dividends from shares or on rental income from an inherited property, for instance.

If you later sell inherited assets like shares or property, you may have to pay Capital Gains Tax. Assets. And if the deceased gifted you money, property, or possessions within seven years of their death, you may have to pay IHT on that.

What An Inheritance Tax Solicitor Can Do For You

An IHT attorney can help ensure:

  • There’s no conflict between your heirs after your death.
  • Your will is legally valid before your death.
  • You have a chance to organise your affairs with the help and advice of a qualified solicitor, to ensure your beneficiaries gain most value from your life’s work and their inheritance.

Inheritance Tax is a highly complicated area and is constantly changing. It’s easy to fall foul of the complexities of the law and that can mean your heirs and dependants receive less than they might otherwise have done. Make an appointment with our team at OGR Stock Denton LLP for help, advice and assistance in planning what will happen to your assets after your death.

What The 2021 Budget Means For Homebuyers, Employers, and Investors?

On 3 March 2021, Chancellor Rishi Sunak delivered this year’s budget. A year ago, two weeks before the first Coronavirus lockdown, the Conservative Party was promising to spend enormous sums in order to ‘level up’ and reward the so called ‘red-wall’ voters. Then everything changed almost overnight, and most of the money set aside for infrastructure spending etc was diverted into saving the economy, people’s jobs, and the NHS. This year’s budget was about continuing to provide Coronavirus support and paying for the mountain of debt accrued in fighting the pandemic. However, given the circumstances the country (and the world) are in, there was some surprisingly good news from the Treasury.

Residential Property Solicitors in London can help more people buy their home

Those looking to purchase a home have been given a double-shot of good news. Not only is the Stamp Duty Land Tax (SDLT) holiday being extended to the end of June, first home buyers are also set to benefit from a government-backed low deposit mortgage scheme.

Stamp Duty Land Tax

Introduced in July 2020 to help the residential property market recover after it came to a virtual standstill in the first lockdown, the SDLT raised the tax-free threshold to £500,000. This meant most homebuyers have not had to pay SDLT when buying a new home, saving them thousands of pounds. There was concern that the property market would fall off a cliff-edge if the tax break was abruptly ended on 31 March, as many transactions would not have completed, leading to buyers pulling out of sales as they would not be able to afford to pay SDLT. Thankfully, the Chancellor announced that the tax-free threshold would remain until 30 June 2021. From 30 June to the end of September 2021, the nil rate band will be set at £250,000 – double its standard level.

Low-deposit mortgages

Low-deposit mortgages have essentially disappeared over the last 12 months (although the number of lenders offering them has been declining since the 2008 financial crisis). This has made it almost impossible for first-time buyers, especially in London and the South-East, to save enough for a minimum 10% deposit. The government has said it is determined to turn ‘generation rent’ into ‘generation buy’.

To help all home buyers (not just those trying to get on the property ladder), the Chancellor confirmed that:

“several of the country’s largest lenders including Lloyds, Natwest, Santander, Barclays, and HSBC will be offering these 95% mortgages from next month.”  

Buyers will pay just 5% deposits to buy homes worth up to £600,000. The government will offer lenders a guarantee to provide mortgages covering the remaining 95%.

Businesses can continue to benefit from the Furlough Scheme

For both employers and employees, the Budget announcement that the Government’s Job Retention Scheme is being extended until September will be welcome. 

Speaking in the Commons, Mr Sunak said:

“As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July when we will ask for a small contribution of just 10% and 20% in August and September.”

Mr Sunak told the Commons: “As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July when we will ask for a small contribution of just 10% and 20% in August and September.”

Despite this positive news, there is likely to be redundancies when the Furlough Scheme does come to an end. For employees, this may mean seeking employment law advice on Settlement Agreements and whether they have a claim for unfair dismissal. Employers may need to see an employment lawyer for advice on ensuring the strict statutory redundancy process is correctly followed.

Inheritance Tax Solicitors can advise on the best estate planning strategies

For some, the budget did not bring good news. Although the Chancellor did not raise Income Tax, National Insurance, or VAT, a freeze was put on Inheritance Tax, pension ‘lifetime allowances’, and the personal tax allowance thresholds. As wages and the value of assets increase over the next few years, more people will be subject to increased taxes.

To protect your wealth, tax planning is essential. An Estate and Inheritance Tax Planning Solicitor will carefully evaluate your investments and advise on actions to take to avoid paying more tax than is necessary. Because the government’s need to repay the deficit will become more pressing over the coming years, it is vital to get your tax planning in order immediately.

To make an appointment to discuss any aspect of residential property, employment, or tax planning law please send us an email or phone 020 83490321.

 Do We Really ‘Care A Lot’ About The Elderly? 

In February 2021, a new dark comedy ‘I Care A Lot’ was released on Netflix. Starring Rosamund Pike as a court-appointed (but really self-imposed) guardian for elderly wards of the State, the American movie illustrates how a con can easily divest an elderly person from their money and property.  However, Ms Pike’s character meets her match when a seemingly docile ward turns out to have some unsavoury connections and is just as ruthless (and nasty) as her guardian. 

Although ‘I Care A Lot’ is entertainment, Lasting Power of Attorney (LPA) Solicitors in London and elsewhere in the country know only too well the extent to which elderly abuse is rife in our society.  Although most media reports focus on abuse in care homes, Solicitors working on Court of Protection and LPA matters regularly advise and intervene (via the police) in cases where an Attorney is suspected of defrauding the elderly person who appointed them to manage their financial affairs.

The extent of elderly financial abuse 

In 2018, care home managers reported almost 13,000 cases of concerns regarding elderly people in care experiencing financial abuse to the Care Quality Commission (CQC).

Because the victims of elderly financial abuse are often suffering from serious health problems, including dementia, establishing the extent of the problem is challenging. A 2015 report by Age Concern suggests:

“On average, the best estimate for the UK is that between 1 and 2 per cent of people aged 65 or over in the United Kingdom today have suffered (or are currently suffering) financial abuse since turning 65. For estimation of numbers of those older (65+) people living in the community in the UK, there is no strong reason given in the literature to change the original CR/DH study estimate of 1.2%, which would mean approximately 130,000 people living in the community aged 65+ in the UK have suffered financial abuse at some point since turning 65.”

What is elderly financial abuse? 

The World Health Organization (WHO) defines elderly financial abuse as:

”The illegal or improper exploitation or use of funds or other resources of the older person.”

Another researcher defines it as:

“the unauthorised and improper use of funds, property or any resources of an older person.” This included the use of theft, coercion or fraud to obtain or try to obtain the older person’s money, possessions or property.”

Most Attorney’s carry out their duties with care and compassion.  However, those that do abuse their positions of trust can cause irreparable damage to the Donor (the person who creates the LPA), their family, and the wider community.

LPA Solicitors tips on how to spot elderly financial abuse

Bank staff, family members, health and care professionals, and Private Client Solicitors are all in a position to spot elderly financial abuse.

Signs of abuse include:

  • anomalies in bank account transactions, including large cash withdrawals
  • sudden changes in bank account or banking practice
  • unexplained withdrawals from a savings account
  • changes in authorising signatures on bank accounts
  • family members taking a sudden interest in protecting their inheritance
  • sudden changes to the Donor’s Will
  • anomalies between the Donor’s financial position and the standard of care home they are placed in
  • the Donor suddenly does not have enough money to pay their bills
  • the sale of possessions and assets which the Donor is unlikely to have approved of

It is sometimes the case that no clear signs are visible, but family members have an inkling that something is not right.  For example, Christine Beeston was jailed for two and a half years in 2018 after she stole £50,000 from her parents who had dementia.  She had obtained Power of Attorney and shortly afterwards, her parents moved to a care home, resulting in Ms Beeston having complete control over their financial affairs. Her brother became suspicious, and after obtaining joint Power of Attorney, he began making enquiries which led to the horrifying discovery of deliberate fraud and theft against his vulnerable parents.

Using an experienced Lasting Power of Attorney solicitor for your affairs 

In July 2019, Demos, a think-tank and Cifas, the UK’s fraud prevention community, published a report on the financial abuse of vulnerable people, including the elderly.  The report recommended that to prevent fraud, stricter controls should be placed on LPAs and a “register of people with active Lasting Powers of Attorney, or under Court Order of Protection with real-time updates should be established, which consumer services companies are able to check against”.

One of the best ways to mitigate the risk of your Attorney stealing funds from you is to have your LPA set up by an experienced Solicitor.  Not only can they advise you on how to select an Attorney, but they can also advise on how to limit an Attorney’s power and/or choose multiple Attorneys who can provide checks and balances on each other’s decisions.

To make an appointment with one of our North London Lasting Power of Attorney Solicitors please visit email or phone 020 83490321. 

People who die without leaving a valid Will

As experienced solicitors dealing with Wills, we understand that Will Writing is something that many people tend to put off. Understandably, nobody likes to think about their death, but putting off making a Will can have a detrimental impact on those left behind, and it could mean that you lose the chance to expressly state who should benefit from the estate you leave behind.

In this post, our Wills team discusses what happens when a person dies without leaving behind a valid Will.

What happens to an Estate when there is no Will in place?

When a person dies without leaving a valid Will, their estate will be distributed according to a specific set of rules. These rules are known as the Rules of Intestacy. You may have already heard of the term ‘Testator or Testatrix’ being used where Will writing is concerned; if a person dies without making a valid Will, they are referred to as an intestate person.

According to the Rules of Intestacy, only civil and married partners or a number of other close relatives can inherit an estate. In the case of an invalid Will, the expressed wishes of that Will are usually voided, and the Rules of Intestacy will ultimately determine how a person’s estate will be divided.

Civil or Married Partners

If a civil or married partner is in a civil partnership or married at the time of a person’s death, they will inherit under the Rules of Intestacy. As such, if the civil partnership was legally ended or you are divorced, then a person cannot automatically inherit under the Rules of Intestacy.

If there has been an informal separation, then a partner can still inherit an estate under the Rules of Intestacy. Common-law or Cohabiting partners who were neither in a legal civil partnership or married cannot inherit under the Rules of Intestacy.

If you are part of a couple that jointly owns a property, then it will depend on whether you have a tenancy in common or a beneficial joint tenancy as to what happens.

Tenants in common – in this case, the surviving partner will not automatically inherit the share owned by the other partner.

Beneficial joint tenants – in this case, when the first partner passes away, then their share in the property will be automatically inherited by the surviving partner.

If you have a joint building society or bank account and one partner dies, then the other partner will inherit all of the money in the joint account. Any money or property that is inherited by the surviving partner will not count as part of the estate of the individual who has passed when it undergoes valuation for the Rules of Intestacy.

If you live with a partner but not married or in a legal civil partnership, you will likely want to ensure the right provisions are left for your partner. Our local Will writing solicitors can help you put the right measures in place to ensure their needs are taken care of according to your wishes.

Children

In the event there is no surviving civil or married partner, then the children of the intestate person will usually inherit the entire estate. If there is more than one child, then each child will inherit an equal share of the estate. If there is a surviving partner, the children will only benefit if the intestate’s estate is valued at more than £270,000. In this situation, then the children will inherit one half of the estate’s value, above the £270,000 threshold.

The most notable consideration here is that under the Rules of Intestacy, the first £270,000 will be awarded to the spouse, and the remaining assets are then equally split between the spouse and the children. In this scenario, you might end up in a situation whereby you have minor children or adult children who are unable to handle a vast sum of money. If this happens, the family inheritance could be squandered. Where substantial sums of money are being passed over to the next generation, inheritance tax is another major consideration.

When you work with an expert Solicitor dealing with Wills, you can implement specific provisions to avoid such issues.

If the parents of a child were not married at the time of death, or they have no registered civil partnership to speak of, then a child can inherit from their parent’s estate if they die without leaving a valid Will. In addition, these children may also inherit from any of their great grandparents or grandparent’s estates if they die without leaving a valid Will.

If a child is adopted, and this also refers to step-children adopted, they also have rights to inherit an estate under the Rules of Intestacy.  If inheritance is left for a child, then they will either receive this when they are 18 years of age or when they form a civil partnership or marry below this age. Up until this point, any inheritance is managed by trustees on their behalf.

Grandchildren or Great Grandchildren

Either a great-grandchild or a grandchild will not inherit from the estate of a person who has died without leaving a valid Will unless:

  • The grandparent or parent dies before the intestate person; or
  • When the intestate person dies, their parent is alive, but they die before reaching 18 years of age, without having formed a civil partnership or getting married.

In this situation, the great-grandchildren or grandchildren will receive equal inheritance shares of the portion to which their grandparent or parent would have been entitled to.  

Close Relations

Parents, brothers, nephews, sisters, and nieces of a person who dies without leaving a Will may inherit according to the Rules of Intestacy. However, this depends on a number of very specific circumstances; namely

  • If there is either a civil or married partner
  • If there are children, great-grandchildren, or grandchildren
  • With respect to nieces and nephews, whether the parents who are related to the deceased is also dead
  • The estate’s value

If the person who died without leaving a Will has no surviving partner, children, grandchildren, great-grandchildren, sisters, parents, brothers, nieces, or nephews, then other relatives could be entitled to inherit some or all of their estate. There is an order of priority that applies to other relatives:

  • Grandparent
  • Aunts and Uncles
  • A cousin could be entitled to inherit in the event the uncle or aunt who would have inherited died prior to the intestate person
  • Half-Aunts and Half-Uncles
  • A half-cousin could be entitled to inherit in the event the half-aunt or uncle who would have inherited died prior to the intestate person

As local Will writing solicitors, we are here to help you with Will writing. Our team can provide you with the guidance you need to correctly express your exact wishes and ultimately avoid any confusion or doubt over who you want to leave your estate to.

Call us today for a conversation about getting help from a specialist Will solicitor.

Who cannot inherit when a person dies without leaving a Will?

Under the Rules of Intestacy, there are some people who cannot claim any rights to a person’s estate if they die without leaving a Will; such as

  • Close friends
  • Carers
  • Unmarried partners
  • Relatives through marriage

It is important to note that while these individuals cannot inherit any part of a person’s estate who dies without leaving a Will, there is a possibility that any of these individuals could make an application to the court for financial provisions from the estate.

In the event there are no surviving relations to inherit the estate, it will pass to the Crown. If this happens, it is known as Bona Vacantia and falls under the responsibility of the Treasury Solicitor to deal with any left behind estate.

While the Rules of Intestacy are designed to ensure a fair distribution of an estate if somebody dies without leaving a valid Will behind, they are not going to provide anywhere near what an individual would have wanted, should they sat with a professional Will solicitor and prepared.

As solicitors dealing with Wills, we can help you make sure you leave a valid Will that provides complete clarity over who should receive what in the event of your death.  Our team also specialise in Estate and IHT planning services, and we can help you understand the different options based on present-day inheritance tax guidelines.

Speak with our team today for an initial discussion about one of our local Will Solicitors dealing with your Will. We offer expert advice, great value for money and our Will writing services can be provided remotely for your convenience.

Executing A Will During COVID-19

As Will Solicitors in London, we have seen an increasing number of clients wanting to know if it’s still possible to execute a Will during COVID. According to statistics released by deVere Group, enquiries about making a Will in the UK have risen sharply, by just over 75% since the beginning of the coronavirus outbreak. Whether or not this is a case of individuals feeling anxious about the increasing number of deaths, people certainly seem to be more alert to the need for financial planning; and with lockdown restrictions in place, people now have the time to consider writing or amending their Wills to reflect their present-day wishes.

To make a valid Will in England, it is essential that the Testator/Testatrix has their signature witnessed correctly by two independent witnesses. However, with lockdown and the associated social distancing measures in place, not to mention homeworking and self-isolation to combat, it has become increasingly challenging for people to do this correctly and in such a way that ensures it is done correctly. Indeed, although it is possible to get many legal documents signed electronically, for lasting powers of attorney and Wills, the rules have always been slightly different.

To avoid potential issues with inheritance tax, contested probate, and the execution of Wills without witness, we have put together this post to offer guidance on the topic of executing a Will during the COVID-19 epidemic.

Why Should you Make a Will?

The COVID-19 epidemic has already impacted the demand for Will writing Solicitors across London. Aside from this, there are many reasons why everybody, regardless of wealth or status, should consider writing a Will.

  • It gives you and your family peace of mind that your ‘estate’ will go exactly where you wish.
  • It can help avoid any bad feelings or family disagreements about what you would have wanted after you pass.
  • It gives you the option to choose exactly who you would like to manage your ‘estate.’

If you fail to leave a valid Will, then the intestacy rules will ultimately govern how your estate is going to be distributed.

How Has Coronavirus Impacted Will Writing in London and the Wider Area

COVID-19 initially presented obvious issues, with perhaps the most significant of all being the signing of the Will and getting the Will witnessed. The purpose of having two independent witnesses for a Will signing is to protect individuals from undue influence and fraud. Under normal circumstances, solicitors dealing with Wills request that the witnesses be physically present at the same the Testator/Testatrix undertakes the signing.

Not being able to do this is one of the biggest challenges presented to Will writing solicitors and clients who need to make or amend a Will during the COVID-19 epidemic.

New Changes to the Law Impacting the Witnessing of a Will

On the 25th of July, 2020, Ministers announced there would be changes made to the law in order to accommodate the remote witnessing of Wills in England and Wales.  The new legislation was indeed passed in September 2020, and this means that Will writing solicitors and their clients are now able to legally get a Will witnessed virtually, making it easier for people to outline and record their final wishes during the COVID-19 epidemic.

Whether or not these changes will continue to be permitted once the COVID-19 epidemic is through remains to be seen. For now, the change will remain in place for two full years, taking us to the 31st of January 2022. However, what matters most, is that all local solicitors for making a Will and their clients can have peace of mind that any Wills witnessed by the appropriate independent witness via a video link will be legally recognised. In addition to this, reforms will also be backdated to the 31st of January 2020. This backdating means that any Will that was witnessed by any form of video technology will be legally accepted, as long as the witnesses you use meet the usual criteria and are fully independent.

Who can witness a Will signing via a Video Conference facility?

Despite these changes to the law, you must ensure that you use appropriate people to witness a Will signing. Whether you use Will writing solicitors to make sure everything is carried out correctly or not, it is advisable that you do not call upon any of the below people to witness a Will signing.

  • A family member or spouse
  • A beneficiary of the Will
  • A person under the age of 18
  • A person who is partially signed or blind
  • The spouse/s of any of the beneficiaries
  • A person who does not have sufficient mental capacity to understand what they are witnessing

If you fail to observe the correct guidance around who can and cannot sign a Will, it could lead to issues with the execution of your Will should you pass.

To find out the cost of a Will through a solicitor or get advice regarding any aspect of Will writing services, please contact a member of our team to get further advice.

OGR Stock Denton – Will Writing Solicitors in London

If you’re looking for the best local solicitors for making a Will, we believe we have everything you need and offer expert guidance over the phone or via video conference. As a trusted and established Will writing solicitors, we provide value for money and IHT specialist advice to help with all aspects of your estate and IHT planning needs.

The cost of a Will through a solicitor could be lower than you think, and in doing so, you can rest assured that all matters are being handled professionally and shall be fully guided by the current laws and legislations.  As North London Probate Solicitors, we understand everything needed to fully prepare a Will, and we offer value throughout the entire process.

Call us today for an initial discussion about our Will writing services, and a member of our friendly team will be happy to answer your questions and set things in motion on your behalf.

If you would like to arrange a consultation or have questions about probate advice, please email me or speak with a team member directly on (0)20 8349 5500.

Seeking professional advice for probate – understanding valuations and tax liabilities

Irrespective of how straightforward an estate may seem, using inheritance tax solicitors in London can prevent you from unnecessarily losing more money in the long-term. This post elaborates on some of the typical questions asked by clients seeking professional probate advice while exploring the probate valuation process more.

The system allows for a layperson to handle such matters themselves, without using any solicitors to manage things on their behalf. However, although an individual can get through the process relatively smoothly, we frequently, as North London Solicitors, are called upon to pick up the pieces. This process can be sectioned into three-stages:

Stage 1 – Valuation

The initial stage involves ascertaining the value of any assets and liabilities. While this sounds relatively simple, if you are dealing with jointly held properties or company shares, there are many things that the law will allow you to do when valuing such items. From an inheritance tax perspective, the difference between getting the valuation correct vs. getting it somewhere near to where you believe it should be, could be substantial.

Getting things right from the beginning and having the correct valuation could potentially save you more than the cost of taking professional probate advice in the first place.

Stage 2 – Tax Return

The complexities of the tax return, and by having a comprehensive understanding of what the rules allow you to do or not, can end up with a client seeing sizeable savings here. As trusted Finchley probate solicitors, we are experts in knowing the right way to structure these returns for the best possible outcome.

When handling all aspects of this for a client, we can ensure the valuation and tax returns are completed correctly and with the right information. This saves our clients both time and money.

Stage 3 – Court Application

Following an application to the court, or for a will, it would be after a grant of probate; that the court could potentially revert back with questions. These questions must be answered correctly and, in a time-efficient manner. If tax is applicable, then you must be able to show that any tax has been paid. Additionally, it’s imperative to know the correct period you have to pay the tax.

Many people aren’t aware that certain assets lend themselves to having tax paid over a 10-year-period instead of straight away. This knowledge alone can save a significant amount of stress and alleviative the immediate need to source those funds.  

In Conclusion

When people seek out help with probate-related matters, understanding valuations and tax liabilities can make a critical difference to the process and outcome. There are specific situations, particularly with tax allowances and the residential nil rate band; the rules around which are highly complex; particularly if someone’s moved out of the property or they downsize a property that may still allow you to claim those rules.

While people often believe that seeking professional probate advice from any North London solicitor will cost money; it may help clients save money while alleviating much time and stress in the process

Probate Valuation FAQs

What does a probate valuation mean?

Probate valuation is a system that helps to establish the value of a person’s assets should they die.

How long should probate take?

In the U.K, the average time probate takes may vary between 1-9 months. The complexity of the estate, its size, and the volume of applications to the local probate office can impact the processing time.

What is the difference between a probate valuation and a market valuation?

Market value is usually a broad estimate obtained by looking at sales of other similar properties. In contrast, the probate valuation is obtained so that HMRC will accept it to establish the amount of inheritance tax that is due to be paid.

What happens if the sale price is higher than the Probate value?

If a property sells shortly after probate is granted, and the final selling price is more than the value submitted for probate; then HMRC could either substitute the sale price and recalculate the Inheritance Tax Liability, or they may look at the increase as a gain, meaning that Capital Gains Tax becomes payable.

What happens if the sale price is lower than the Probate value?

Where a sale price is below the figure provided for probate, and the property is sold within four years of the date of death, a claim with HMRC could give you a refund for overpaying inheritance tax.

If you would like to arrange a consultation or have questions about probate advice, please email me or speak with a team member directly on (0)20 8349 5500.

Government announces temporary changes to identity verification and signing deeds

The Government has announced that from 4 May it will temporarily introduce new methods for verifying a person’s identity and for signing deeds in response to the COVID-19 pandemic.

Under the new rules, in addition to conveyancers and chartered legal executives, verification can now be undertaken by people who work, or have worked, in certain professions including:

  • retired conveyancers, chartered legal executives, solicitors and barristers 
  • bank officials and regulated financial advisers
  • medical doctors, dentists and veterinary surgeons
  • chartered and certified accountants
  • police officers and officers in the UK armed forces
  • teachers and college and university teaching staff
  • Members of Parliament and Welsh Assembly members
  • UK civil servants of senior executive officer (SEO) grade or above
  • Magistrates.

To assist with social distancing measures and the official ‘Stay at Home’ guidance, verification can now be done via a video call. 

The rules change, will also allow the Land Registry to accept deeds that have signed using the “Mercury signing approach’.

For land registration purposes, this means that a signature page will need to be signed in pen and witnessed in person, although not via a video call, and can be captured using a scanner or camera to produce a PDF, JPG or suitable copy of a signed signature page.

It is hoped that the changes will help property transactions progress more smoothly within the rules of the current lockdown.

If you require assistance with a property transaction under these unique circumstances, why not speak to our property team today

Fraud risk the main obstacle to coronavirus Wills reform

The Government has indicated that it is considering reforms to probate legislation to accommodate the challenges of the coronavirus outbreak, but has cautioned against any move to suspend the requirement for two independent witnesses, owing to the fraud risk.

Justice Minister, Alex Chalk, responded to a Written Question in Parliament, saying: “The Government is currently reviewing the case for reform of the law on making Wills given current circumstances.

“The constraints of the COVID-19 situation must be balanced against the important safeguards in the law to protect elderly and vulnerable people, in particular against undue influence and fraud. Having two independent witnesses provides safeguards to those making Wills.”

He went on to reject the idea of allowing privileged wills, which can be made on active military service, saying that those circumstances do not equate to the coronavirus crisis.

However, he added: “The Government is committed to considering further work on witnessing documents by video-conference generally, in the light of the recent Law Commission report on Electronic Execution of Documents, which will help inform potential reforms to the law on Wills in the future.”