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Trust Reporting Deadline Extended, Which May Lead to Rise in Trust Disputes

Posted on by Jonny

According to recent reports, the Trust Registration Service has extended the deadline to report trusts. It has also opened to non-taxable trusts to register. All relevant trusts that were in existence on or after 6th October 2020 must be registered by 1st September 2022. For trusts created after 1st September 2022, the person writing the trust would originally have to register within 30 days of creating the trust. However, HMRC has increased the 30-day limit to 90 days. There have also been concerns that many trustees may be caught out in the new registration requirement. This may lead to more trust disputes.

The obligation extends to all UK express trusts and some non-UK express trusts unless the trust is of a type specifically excluded by HMRC’s guidance. Excluded Trusts include:

  • Life policies or pensions written into trust
  • UK-registered charities
  • Will trusts with limits of two years
  • Trusts for bereaved children

A partner at tax advisors RSM UK says: “What constitutes a trust arrangement under the TRS may no longer correlate with what an individual would consider to be a trust,”

“Some arrangements popular among parents and grandparents, such as bare trusts and bank accounts held for minors, are not exempt. This means they need to register those trusts.”

“(However) it remains unclear whether other joint property holding arrangements, including those where more than four individuals have a joint interest in a property or tenancy agreement, are covered by the exemption or not,”

She also notes that a lack of understanding of obligations is not a defence for failing to comply, adding that lack of awareness, and consequently lack of action, may lead to more people being handed penalties.

trust disputes

Trust Disputes

The cause of trust and inheritance disputes can vary enormously. However, at the centre of every challenge is a person who believes they’re victims of unfair treatment. For instance, trust suffers from improper management. Additionally, the trustees may interpret the intentions of the trust.

People make challenges in a number of ways. For instance, they target the value of the assets within a trust. Or there might exist a fundamental disagreement between beneficiaries.

Handling Trust and Inheritance Disputes

The nature of a trust’s existence is to prevent financial disputes. Unfortunately, even those that are established with careful consideration to both tenants and beneficiaries can still be subject to dispute. It is important that trust disputes are handled with care and sensitivity. This is because they usually involve family members. Working with the right solicitors means you can protect both your rights and your relationship with your family.

Trusts created on or after 1 February 2001 are legislated under the Trustee Act 2000. Those created before this date are subject to different laws. Our team has a comprehensive working knowledge of all of these.

How We Can Help

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with inheritance claims. This includes trust disputes and all things related to trusts. Contact us by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Rising Property Prices May Mean More will Pay Inheritance Tax

Posted on by Jonny

The rise in property prices in the past year may have an effect on the number of people who have to pay inheritance tax, experts have warned. House prices have reportedly increased by 8.9% in the past year. This may mean that more will pay inheritance tax when someone leaves them property in their Will.

New figures from HMRC show that inheritance receipts in April to May 2021 were £966million – £340million higher than the same period last year, due in part to an increase in the value of many people’s homes.  

Financial advisers say significant increases in property values may mean that more estates will nudge past the threshold where inheritance tax is due, without them realising it.   

Current rules state that if you give away your family home to your children, £500,000 is the maximum value that your estate can reach before you start being liable for inheritance tax – or up £1million if you are a surviving spouse or civil partner who already inherited the property from them.

If you do not fall into this category, your limit is £325,000. This is the standard nil-rate band. The nil rate band is the threshold above which Inheritance Tax is payable.

Why More Will Pay Inheritance Tax

Inheritance tax (IHT) is payable at 40 percent on the value of an estate above a certain threshold of a person who has passed away. To avoid taxation as much as is legally possible, many people choose to take preventative action before they pass away.

In England and Wales, if an Estate is worth more than £325,000 when a person dies, then they typically have to pay Inheritance Tax. Currently, the Inheritance Tax rate is 40% on anything above the threshold. If a person leaves more than 10% of the estate’s value to charity, then the rate may reduce to 36%.

If inheritance tax is payable

The grant of representation will not usually be issued until the inheritance tax (IHT) has been paid to HMRC. This can potentially cause a delay in the administration of the estate.

You usually have to pay 10% of the tax due on the value of property and shares plus all of the tax due in respect of the rest of the estate. This tax payment should be made within six months of death. The additional tax is payable in yearly instalments over a ten-year period, or as soon as they are sold. Interest will start to accrue on any outstanding inheritance tax after six months from the date of death.

Due to the rise in house prices in 2020-2021, it may mean that more will pay Inheritance Tax.

How We Can Help

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with inheritance claims. This includes inheritance tax matters. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Unofficially Adopted Children Treated Unfairly in Inheritance

Posted on by Jonny

In 2021, a typical family does not exist in the way that it used to. Every family is different; some people remarry, have stepchildren, adopt children. However, the laws surrounding inheritance do not reflect this. According to reports, unofficially adopted children are treated unfairly in inheritance matters. This is because there are certain rules surrounding inheritance tax depending on your relation to the deceased.

Different Rules for Unofficially Adopted Children

One of the rules that is different for children related by blood and unofficially adopted children is the Residence Nil Rate Band. With the Residence Nil Rate Band, each individual has an allowance regarding inheritance tax. Currently, the value is £325,000 – but if you have a property or if you have owned a property, and in your will, you leave your estate to your direct descendant, then you may claim an additional threshold before inheritance tax of £175,000, bringing the total allowance to £500,000. You do need to meet other certain criteria to claim this extra allowance.

However, the Residence Nil Rate Band – although it includes stepchildren or foster children – excludes people who have not got children but want to leave it to nieces and nephews or persons who they view as a child.

This means that unofficially adopted children must pay more inheritance tax than children or stepchildren.

Dying Intestate

There are also problems when someone dies without making a will – also known as Intestacy Rules.

If this is the case, it completely and utterly excludes unofficially adopted children and even stepchildren. If you die without making a will, you must follow the Intestacy Rules and that does not even include stepchildren. 

Inheritance Act Claims for Unofficially Adopted Children

The Inheritance (Provision for Family and Dependants) Act 1975 states that it is

“An act to make fresh provision for empowering the court to make orders for the making out of the estate of a deceased person of provision for the spouse, former spouse, child, child of the family or dependant of that person; and for matters connected therewith.”

Put simply, this act ensures that when a person passes away, every beneficiary receives part of their estate. A beneficiary is anyone who receives anything in a Will.

Certain people, if a Will does not include them, and they believe it should, may be able to make an Inheritance Act claim. So if they believe that they were wrongly left out of a Will, they may be able to make a claim.

How We Can Help with Unofficially Adopted Children being Treated Unfairly in Inheritance

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with inheritance claims. This includes claims for unofficially adopted children being treated unfairly in inheritance. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Stepparents Exclude Stepchildren from their Will, Research Finds

Posted on by Jonny

According to recent reports, research shows almost half of stepparents in the UK plan to exclude their stepchildren from their Will. Tower Street Finance conducted the research to examine people’s attitudes towards inheritance.

They surveyed 2000 people, and of the 2000, 32% say that they currently have a Will which does not treat their children and stepchildren equally. And 17% excluded stepchildren from their Will completely.

This research may eventually lead to a generation of stepchildren being left out of Wills. These stepchildren may feel that they have been left out of the Wills unfairly, and it may mean that they can make an Inheritance Act claim.

stepparents exclude stepchildren from their Will

Inheritance Act Claims if Stepparents Exclude Stepchildren from their Will

The Inheritance (Provision for Family and Dependants) Act 1975 states that it is

“An act to make fresh provision for empowering the court to make orders for the making out of the estate of a deceased person of provision for the spouse, former spouse, child, child of the family or dependant of that person; and for matters connected therewith.”

Put simply, this act ensures that when a person passes away, every beneficiary receives part of their estate. A beneficiary is anyone who receives anything in a Will.

Certain people, if a Will does not include them, and they believe it should, may be able to make an Inheritance Act claim. These people include stepchildren. So if they believe that they were wrongly left out of a Will, they may be able to make a claim.

Who Can Claim Under The Inheritance Act?

Under The Inheritance Act, certain people can make a claim. these people are:

  • A spouse/civil partner
  • A former spouse/civil partner
  • Children, including stepchildren and adopted children. They can either be an adult or a minor
  • Financial dependants
  • Cohabitees. However, a cohabitee must live in the same house as the late party for a minimum of two years. Furthermore, they must be living as husband or wife of the deceased

Under these rules, stepchildren are able to make claims under The Inheritance Act.

Is there a time limit to claim under The Inheritance Act?

Yes, there is a time limit to make a claim under The Inheritance Act. This time limit is within six months of the date of the Grant of Probate. The Grant of Probate (aka Grant of Representation) is a legal document that clarifies the true Executor of a Will. In essence, it confirms that the executor has the authority to deal with the estate’s financial resources.

If that time limit passes, it may still be possible to make a claim under The Inheritance Act. However, you must contact the court so they can grant permission that the claim can be given authority.

How We Can Help if Stepparents Exclude Stepchildren from their Will

Here at The Inheritance Experts we work with solicitors who have years of experience dealing with Inheritance claims. This includes claims under The Inheritance Act. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Trust Registration Deadline Extended

Posted on by Jonny

HM Revenue and Customs (HMRC) has stated that it will extend the Trust Registration Service (TRS) deadline as they have revealed that the service will not meet the original March 2021 deadline. The Trust registration deadline has been extended to some time in the Summer, according to a report by Today’s Wills and Probate.

Last July, the government set a March 2022 deadline for existing trusts to register on the TRS, or to update their records if they had already done so. The transition period had to be an extended one not just because it would take a long time for the millions of UK trusts to register, but also because HMRC had to fundamentally redesign the existing TRS to cope with the expansion.

Trust Registration and the Extended Deadline

Currently, trustees or their agents must register a trust using the Trust Registration Service (TRS) if the trust has been deliberately created by a settlor (it is an ‘express trust’) and it is currently liable to pay any of the following taxes:

  • income tax
  • capital gains tax
  • inheritance tax
  • Stamp Duty Land Tax
  • Stamp Duty Reserve Tax

Some estates also have to be registered if the personal representatives need to complete a Self Assessment Trust and Estate tax return. The Trust registration deadline has now been extended so all Trusts that need to can register in time.

Trust and Inheritance Disputes

The cause of trust and inheritance disputes can vary enormously. However, at the centre of every challenge is a person who believes they are victims of unfair treatment. For instance, trust suffers from improper management. Additionally, the trustees may interpret the intentions of the trust.

People make challenges in a number of ways. For instance, they target the value of the assets within a trust, or there might exist a fundamental disagreement between beneficiaries.

We can help if you:

  • Want to remove a trustee.
  • Disagree with the reported value of assets a trust holds and want to query it.
  • Need to make a claim against a trust for money it owes to you.
  • Want support and guidance on how to best carry out your duties as a trustee.
  • Find that the trust has ambiguous wording, and you want to clarify the structure.

We can also help you if you are considering challenging the terms or the management of a trust if you have yet to register it. We can advise you if you’re unsure whether you have legal grounds to do so. The team at The Inheritance Experts can help you understand your rights and options.

How we Can Help

Here at The Inheritance Experts, we work with solicitors who have years of experience dealing with all manner of Inheritance claims. Contact us today by filling in our contact form. Or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Writing A DIY Will

Posted on by Jonny

There are many things to consider when writing your Will. Whether to use a professional Will-writing service or write a DIY Will is one of the considerations. If you choose to write your own Will, there are a number of things you must do in order to make sure it is legally valid.

The most important thing that you need to do when writing your own Will is make sure you know what the law requires. If you do not do this correctly, your Will may be invalid or ineffective.

To be valid, a DIY Will, or holograph Will, as it is known in legal terms, must be executed in accordance with the requirements of section 9 of the Wills Act 1837. In this, the Will must be “Signed by the testator (the person making the Will) with the intention of it giving effect to their Will in the presence of two witnesses, who each sign the Will in the presence of the testator.” There are new rules due to the pandemic, which state you may now also use video witnessing for your Will.

You also need to be of sound mid to write your Will. It is important when writing your Will as it proves that what you write in your Will is what you actually want.

You must also make sure that, when you write your Will, you use terminology that is clear and avoids ambiguity in the eyes of the law. The Will must clearly state your wishes and you must use the correct terminology to avoid the Will being found to be invalid.

What Needs to go in a DIY Will?

If you choose to write your own Will, there are a number of things that you must include. These things are:

  • Your personal information (full name, current address, date of birth, details of any children you have and their dates of birth, relationship status)
  • Your estate (the items of value you own, either alone or joint with someone else. This includes property, accounts, stocks and shares, or any foreign property)
  • Any debts
  • Your beneficiaries (including the names and addresses of the beneficiaries)
  • If you wish to leave any gifts to charity
  • Your executors (you can choose one or more than one)
  • Legal guardians for your children (if you have any under 18)
  • Your other wishes (such as Trustees or funeral wishes)

If A DIY Will is Invalid

When a DIY Will is invalid, then the previous Will, if there was one, would be the legal Will. If there is no previous Will, then the Rules of Intestacy come into effect. These rules place family members in order of who should inherit your estate. This order is decided by the law.  It can also lead to lengthy legal disputes for families. So it is vital to make sure that your Will is written exactly how it would be if you used a professional Will-writing service.

How we can help

Here at The Inheritance Experts, we work with solicitors who have years of experience in dealing with all manner of inheritance cases. This includes issues with DIY Wills. Contact us today by filling in our contact form or by calling us on to speak to one of our friendly knowledgeable advisors.

Mental Capacity and Contesting A Will

Posted on by Jonny

For a Will to be legally valid, the person must have the required mental capacity at the time of writing. This is also known as being of sound mind. It is important for the person to be of sound mind to ensure that all of their wishes are carried out the way they want them to be.

Mental capacity and contesting a Will go hand in hand, as, if the person did not have the mental capacity to make their Will, then it is one of the stronger reasons to contest the Will. If you believe that they did not have the mental capacity to make or change their Will, then you may be able to contest the Will.

What is Mental Capacity?

Mental capacity, also known as testamentary capacity, means that the person must have the mental ability to understand what they are doing. They must also understand the impact that this will have on their estate and beneficiaries.

Because a lot of people make or change their Will later in life, they can have problems with mental capacity. It can be affected by many conditions and injuries.

Mental Capacity Examples

One of the most common diseases that may affect a person’s mental capacity is Alzheimer’s Disease. Alzheimer’s Disease is known to affect the brain, and memory. So if a loved one was suffering Alzheimer’s, there is a chance that they may not have been of sound mind when the Will was written. Another example of a condition that may affect a person’s mental capacity is Dementia. If they were suffering from dementia, for example, you may be able to make a case that the last will is invalid.

Injuries can also affect a person’s mental capacity. Examples of this include brain injuries, which can happen at any point in someone’s life. Serious injuries can also affect mental capacity, as can mental illness.

Mental Capacity and Contesting A Will

There are a few reasons you may be able to contest a Will based on the person lacking mental capacity. These include:

  • If the Will contradicts earlier promises or agreements
  • The Will does not accurately reflect the deceased’s wishes
  • It does not provide for those expected, such as grandchildren
  • You know the deceased was suffering from a condition such as Alzheimer’s Disease or Dementia

A mental capacity will contest is one of the stronger cases you can make for contesting a will. This is because when you do, there can be evidence they were not mentally well when the last will was made. In this case, the previous Last Will and Testament would instead be the valid Will.

To prove that the deceased lacked mental capacity when making their Will, a solicitor will get their medical records. They will then work with a medical expert. The medical expert can help determine the state of mind that the person was in when they made or changed their Will. This will help in contesting the Will.

How We Can Help

Here at The Inheritance Experts, we work with solicitors who have years of experience dealing with all manner of inheritance claims. This includes contesting a Will based on mental capacity. Contact us today by filling in our contact form, or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Possible Inheritance Tax Increases

Posted on by Jonny

There may be Inheritance Tax increases on the way according to a report by the Express. This may be used in the effort to recover the economy following the COVID-19 pandemic. It is one of the proposed tax increases that the Chancellor could potentially be planning.

This tax increase could happen as the UK has once again entered recession, with a 20.4% contraction. There are several taxes that may increase as part of the chancellor’s plan, and inheritance tax is only one of them. We will therefore be keeping a close eye on what the chancellor says regarding this subject.

Inheritance Tax Increases

Inheritance Tax is an important factor when you are writing your Will. The current rules of inheritance tax are as follows:

  • There is usually no inheritance tax to pay if the value of your estate is below the threshold, which is currently £325,000.
  • You also do not need to pay if you leave everything above the £325,000 threshold to your spouse, civil partner, charity, or a community amateur sports club
  • Inheritance tax has a rate of 40%. This is only charged on the part of your state that is above the threshold.
  • If you donate more than 10% of the value of your estate to charity in your Will, then the inheritance tax may reduce to 36%.
  • When you leave your home to your children, stepchildren, adopted or fostered children, or grandchildren, the threshold for Inheritance Tax may increase to £500,000.

Some gifts that you give whilst you are still alive may also be taxed. This depends on when you gave the gift and what it states in your Will.
These may also rise in the potential new rates that the chancellor is considering, and it may affect you and your Will in different ways.

What the Inheritance Tax Increases May Mean for You

We do not know what the plan is for inheritance tax yet, and we also do not know when these rules may come in to force. However, they could affect a lot of people. The increases are likely to mean that your loved ones get less than you would like when you die. This is why it may be essential to speak to a legal expert to see what your options may be. There may also be changes to the threshold, which could also affect your Will.

Whilst there may not be anything you can do about the Inheritance Tax increases if and when they do happen, seeking legal advice may help you to understand the whole process of inheritance. It may also help you understand what the increase can mean for inheritance.

How We Can Help

Here at The Inheritance Experts, we work with solicitors who have years of experience in dealing with all manner of Inheritance matters. Contact us today by filling in our contact form, or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

LPAs During the Pandemic

Posted on by Jonny

COVID-19 has undoubtedly had an impact on everything in our lives. Making Lasting Power of Attorney (LPAs) during the pandemic was an aspect that the government needed to address. This is because the subject of Wills and other legal documents is likely to be on people’s minds during this time.

Why LPAs Are Important

A Lasting Power of Attorney document is a document which allows you to appoint people to make decisions for you. This is if you lose the mental capacity to make decisions for yourself. There are two types of LPA; a property and financial LPA and a health and welfare LPA. They are both important, as they allow people you trust to make decisions on your behalf regarding your finances, property, where you want to live, and how you would like to be cared for should you lose mental capacity.

Many people think that if they lose mental capacity, then their Next of Kin can make decisions for them. Unfortunately, that is not the case. If you do not have an LPA set in place, then your family have to go through a long application process for someone to be appointed your deputy. In this case, the law will choose someone to be the Deputy, so it is important that you have chosen someone already.

Changes in Making LPAs During the Pandemic

We reported earlier in the year when the government temporarily made video witnessing for Will writing legal due to the pandemic. This change will last for two years. The change was also backdated to include any Wills written from January 2020. Unfortunately the same rule is not in place for LPA documents, which has left a lot of people unable to make LPAs during the two lockdowns.

There have, however, been some changes when the lockdown restrictions lift. According to the government’s website, you can now make the documents. The LPAs can now be witnessed in a safe, socially distanced manner. This is in accordance with the tier guidelines that are currently in place up and down the country.

Rise in People Making LPAs During the Pandemic

There has been a rise in people making Wills due to the pandemic, and many of these people are also making LPAs. This is likely due to people now thinking about getting their affairs in order. The pandemic has affected many areas of our lives. So people are now focusing on making sure that they take care of everything the way they would like.

This rise has led people to start seeking out legal advice when it comes to making their LPAs. We may be able to help if you are also looking to get your affairs in order.

How We Can Help

Here at The Inheritance Experts, we work with solicitors who deal with all manner of inheritance cases. This includes Lasting Power of Attorney documents. They have years of experience dealing with inheritance matters. Contact us today by filling in our contact form, or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

Rise in Making A Will due to the Pandemic

Posted on by Jonny

Before the pandemic, less than half of UK adults had made a Will. This has since risen during COVID-19, with a rise in enquiries concerning making a Will of 75% since the start of the pandemic. The Financial Times reported in March that some law firms saw enquiries double in the first few weeks of lockdown.

This is no surprise as the worry of losing a loved one has been at the front of many minds during the pandemic. Many people may have also thought about making sure they care for their loved ones should something happen to them. Thus leading more people to think about making a Will.

Making A Will During the Pandemic

We reported back in August that video Will practices have now been made legal. This is a temporary measure until January 2022. This refers to the fact that it is now legal to have a witnessing of a Will made by video, by two witnesses. The video will witness news comes amidst an effort to limit the necessity of in-person witnessing of wills due to social distancing precautions. The temporary measures include any Will written from 31st January 2020

There are certain rules to this temporary amendment of the law. These rules include:

  • Making sure the audio and video are both clear
  • Ensuring that the witnesses can actually see them signing the Will
  • There must be a clear line of sight of the Will
  • Treat this option as a last resort

There are also some exclusions from the temporary change. You can find out more information about the temporary rules here.

Rise in Gifts Left to Charity in Wills

Not only has their been a rise in people making a Will, more people have been donating to charity in their Wills. This could be thanks, in part, to people like Captain Sir Tom Moore, who raised over £33 million for the NHS during the first lockdown. People wanting to remember a charity that means a lot to them could be another contributing factor.

We have written previously about leaving gifts to charity in Wills, and, with many charities having to pause or stop their work due to lockdown or restrictions, they may now need donations more than ever.

There are statistics that state that, during lockdown, the amount of money left in Wills as legacy donations surged to £35 million. This is compared to around £4 million previously. This is a positive step, as charities rely heavily on legacy donations to continue the work that they do.

How We Can Help

Ultimately, people want to make sure that they care for their loved ones after they die. This is the main reason that many people choose to make a Will. Here at The Inheritance Experts, we work with solicitors who have years of experience dealing with all manner of enquiries. This includes enquiries about Wills. Contact us today by filling in our contact form, or by calling us on 01614138763 to speak to one of our friendly, knowledgeable advisors.

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