Nigel Jones - Wills, Probate and Court of Protection

Nigel Jones, Solicitor. Presentation: Wills, Probate & Court of Protection

Nigel Jones, Solicitor and Senior Director

26-28 James Street, Cardiff Bay, Cardiff, Wales, UK,

CF10 5EXTel: 029 20 456780

Email: [email protected]

Nigel Jones - Solicitor - March 2014

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Wills

Probate

The Court of Protection


Today I am going to talk about:

to appoint people you trust as executors to ensure your wishes are carried out

to name guardians to look after your children

to make arrangements for income for your spouse/partner, while ensuring your children ultimately receive your assets

to avoid your estate being distributed according to the rules of intestacy


Why make a will?

to leave gifts to your step-children to give to charities or other organisations to limit the Inheritance Tax payable upon

your death to leave gifts to people who are not closely

related to you to ensure your assets do not go to the

government To eliminate or limit potential family disputes

after your death To be the boss over what happens to your

assets!


Why make a will (cont.)?


Example -Death bed Will

As the name suggests, this usually occurs where someone has left it a bit late

Instructions were once taken (at a hospice) from a person whose main aim was to EXCLUDE one brother – of four siblings- from benefiting from the estate

Had the Will not been made, the excluded brother would have received £240,000 according to the rules of intestacy

(According to the family, the brother was excluded because he had slept with the deceased’s fiancé. The deceased never married)


Death bed Will


If you do not make a Will……

Who is to act as the Administrator of the estate?

If married, your spouse may only be entitled to part of your estate

If unmarried, your partner may be left with little or nothing and may even face losing the home you share

Those who you might wish to benefit from your estate may not (or may receive less) while others who you do not want to benefit may receive a lot!


Your loved ones may face significant problems:


PROBATE

PROBATE is the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased person's property under the valid Will.

The people who administer the estate are referred to as Personal Representatives (or PRs). Where there is a valid Will the PRs will usually be the EXECUTORS named in the Will.


What is Probate?

If there is no valid Will, an ADMINISTRATOR(S) will have to be appointed (those entitled to appointed are named in order of priority from a proscribed list - spouse, then children, then parents, then siblings etc of the deceased)

Distribution will be made according to Statutory Trust depending on who survives the deceased


No Will?


PRs will have to cope with:

The Deceased’s estate was valued at £4.5m This included 9 properties in Hereford and

the surrounding area (some rental, the deceased’s home, his children’s homes and his mistress’s home) some registered in his name and some in his children’s names, some with mortgages

The Deceased ran three businesses and had 4 pensions


Example: Complex Probate

The Deceased had several insurance policies and had paid premiums on a number of policies in his children’s names

The Deceased’s Will had been drafted so that he left everything other than his Business assets to his wife (therefore NO Inheritance Tax was payable on his death)

The value of the wife’s inheritance was therefore around £3m

The administration of the Estate took over one year and cost over £100,000.


Complex Probate

Determine whether the deceased left a Will Notify all concerned parties (authorities,

creditors, debtors, beneficiaries) Ensure all assets are protected (home

insurance in particular) Deal with immediate/urgent issues Calculate the estate value once all

information regarding assets and liabilities has been gathered and complete relevant tax return


Administration of the Estate- STEPS:

If Inheritance Tax is payable, arrange payment of it

Apply to the Probate Registry for a Grant of Probate (where there is a valid Will) or Grant of Letters of Administration (where there is no Will)

Deal with all assets (gather in funds from bank accounts, sell/transfer home, sell/transfer shares etc)

Settle all liabilities Pay beneficiaries (under Will/Statutory Trusts)


STEPS (cont.):

The Court of Protection is a specialist court for all issues relating to people who lack capacity to make specific decisions.

The Court makes decisions and appoints Deputies to make decisions in the best interests of those who lack capacity to do so.


The Court of Protection (CoP)

decide whether a person is able (‘has capacity’) to make a particular decision for themselves

make decisions on financial or welfare matters on behalf of people who are unable to do so

appoint a Deputy to act for someone who is unable to make their own decisions


Specifically CoP can:

remove deputies or attorneys who fail to carry out their duties

decide whether a Lasting or Enduring Power of Attorney is valid

hear cases concerning objections to the registration a Lasting Power of Attorney or Enduring Power of Attorney

hear cases regarding Statutory Wills


CoP can (cont.):

A mother of a number of children – some from her first and some from her second marriage loses capacity

A number of issues arose, including the disclosure of a very dubious Will purportedly made by her leaving her considerable estate (of over £1m) to only one ‘side’ of her family

The CoP appointed Deputy proposed a Statutory Will dividing the estate equally between her children

The Statutory Will has to be approved by the CoP


CoP: example

Costly Supervised and reporting requirements Slow Often contentious Stressful We recommend making a professionally

drafted Will and setting up Lasting Powers of Attorney early so CoP proceedings will be unlikely.


CoP drawbacks:


Any questions? Contact Nigel Jones on 029 20 456780

Nigel Jones - Wills, Probate and Court of Protection

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