UK Inheritance Tax: Half Your Money Pot May ‘Wipe Out’ As Will and Probate Disputes Emerge | Personal Finances | Finance
Inheritance tax (IHT) is levied on the estate of a deceased person and passes on their property. Usually these assets are passed on to friends, family and children and the costs can be managed through the use of wills and probate system, which gives a person (usually a lawyer or other professional) the legal right to manage the assets concerned.
Today, JMW Solicitors, the estate attorneys, detailed that there has been a surge in inquiries relating to estate disputes and will challenge, as well as fewer families bequeathing their assets to their children.
The law firm said compared to the previous six months, inquiries increased 111% between October 2020 and April 2021.
He noted that an increase in unexpected deaths from the COVID-19 pandemic was “undoubtedly” contributing to intestate inheritance rates (where someone dies without a will), his experts said estate disputes were already underway. increasing in England and Wales.
JMW Solicitors explained that figures showed that one in four adults would now challenge a will if they did not believe it was distributed correctly, with a common misconception regarding inheritance law in England and Wales being another factor contributing to the increase in contentious probate cases.
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“Some wish to encourage their children to make their own way in life, while others prefer to pursue charitable or philanthropic goals, or to protect the estate for future generations beyond their children.
“Historically, moral obligation has played an important role – parents felt they had to provide for their children and this view is also supported by law.”
Mr Cobb went on to warn that under certain circumstances children can sue an estate if they have been excluded altogether.
In addition to the increase in inquiries seen by the law firm, before the pandemic hit the UK, it had already seen a ‘staggering’ 260% year-over-year increase in disputed homologation cases.
With that in mind, JMW Solicitors theorized that a shift in legacy traditions could continue in a post-pandemic world.
Currently, the IHT is taken at 40 percent, but this is only charged on parts of an estate valued over £ 325,000.
To ensure the proper transmission of assets, wills can be created to manage the inheritance process and even reduce what is paid.
However, there are a number of factors that can make a will invalid and, as such, estate planners regularly advise families to seek professional help.
The probate system can also be used indirectly to resolve inheritance issues, but probate applications have been delayed in recent months due to the pandemic.
In addition, the Department of Justice is currently carrying out consultations on aligning the fees for professional and non-professional applicants for probate into a single fee of £ 273.
This could increase costs across the board, as the Law Society has detailed the current fees of £ 155 for business users and £ 215 for non-business users.
Stephanie Boyce, President of the Law Society, concluded: “The Justice Department’s persistence in increasing probate service fees is of concern, especially when there are ongoing and significant delays in probate service.
“With so many applications now online and the expansion of court and tribunal service centers to centralize administration, it is unclear why probate services overhead has increased to justify such a large fee increase. .
“It’s no secret that the probate department has experienced delays for people applying for probate grants or letters of administration. In 2020, people had to wait an average of 12 to 14 weeks to receive their scholarship. This is unacceptable, the service must be timely and allow executors to settle the estate of a loved one. “