Wills and Probate
Most people are familiar with wills. They’re the legal documents that define how assets are managed and distributed after someone dies. Almost any kind of asset can be included in a will, including possessions, property, money, and investments. Wills are legally binding documents once they have been properly witnessed and signed. Probate is the process by which a deceased person’s wishes—as outlined in their will—are carried out. When a will is in probate, the executors of the estate distribute the deceased’s assets in accordance with their wishes as stated in their will.
If someone dies without leaving a will they’re said to have died intestate. In these cases their assets automatically pass to their surviving spouse, if they have one. If there is no spouse or civil partner the assets pass to the closest direct descendants—children—or closest living relative if there are no children. A will is a legally binding document but there are situations where the terms of a will can be overturned.
Drafting a Will
Making a will allows a person to dictate how their assets are distributed after their death. Depending on the structure of the will it can also help reduce the amount of inheritance tax owing. As well as dictating asset distribution, the maker of the will can also nominate a person or people to ensure the terms of the will are carried out. This person is the executor; they can be the solicitor of the person making the will, or any other individual whom they want to perform this role.
It’s legal for people to draft their own wills. To do so they must be over 18 and be of sound mind. If the will is properly constructed its legal validity is just the same as if it were drafted by a lawyer. However, if someone has a large, complicated, or particularly valuable estate, having solicitor to draft the will is much the best option.
To be legally binding a will must be signed by the owner of the estate in question, and witnessed by two people. Once this process is complete the will should be stored in a secure place, for instance in a bank deposit box, or lodged with a solicitor. Wills can also be lodged with the London Probate Department as an additional security measure, but this is not required by law. A will doesn’t have to be registered with the probate department or any other authority in order to be valid.
Setting up a trust
A trust is a legal arrangement where assets are held in trust and the assets are managed by a trustee on behalf of the owners of the trust. Setting up a trust is a common way of preserving assets left in a will when the estate is a valuable one, because a trust is a separate legal entity. This means the assets in the trust have tax benefits that reduce the amount of inheritance tax that must be paid on them. To set up a trust, a document called a trust deed is created, which details the assets in the trust, as well as the trustees and beneficiaries.
Setting up a trust is more complicated than drafting a will, because the definition of a trust is a nrrow one. In addition, it's important that the wording of the trust deed is highly precise, to ensure the trust works as intended.
The Probate Process
After a person dies, their assets must be collected and distributed to the beneficiaries of the will. This is carried out by the executor of the will. If the deceased person's will leaves assets worth more than £5,000, or if the estate includes assets such as land or shares, then the executor must obtain a Grand of Probate from a court in order to start the probate process.
The executor of a will has a variety of tasks to carry out when they perform this role. First they must collect the assets that are named in the will. For instance, they might need to inventory the items in the deceased's home, sell possessions, assets, or property, or collect money from one or more bank accounts.
They must also complete an inheritance tax return and pay the taxes that are due on the estate, using funds from the estate. And finally, they must distribute the items, assets, and money that have been left to the beneficiaries of the will, in accordance with whatever instructions are provided in the will.