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Preparation pays

07 April 2017

Appointing the right firm to carry out the instructions in your Will could ensure a smoother experience for your family at a difficult time.

The death of a loved one is hard enough to deal with on its own. However, if there is a complex or sizeable estate to administer, the prospect of having to sort it out can be daunting. From dealing with HMRC to selling property, these tasks are an additional burden at a difficult time.

If a family member decides to undertake the work themselves, they could be personally liable for any mistakes made during the process, such as when completing tax returns and legal paperwork.

That’s why many people appoint a solicitor as executor. A good solicitor can deal with probate and with distributions to beneficiaries. However, very few solicitors extend their service beyond the legal duties of winding up the estate.

In recent years, specialist firms that handle the end-to-end process of estate administration have evolved, as people’s financial affairs and personal wishes have become more complex.

“Estate administration is much broader than probate,” says Tony Müdd, divisional director, development and technical consultancy at St. James’s Place. “It deals with everything that an individual has – from selling their house to rehoming their pets.”

Specialist estate administration firms do all of the legal and tax work required, but they also deal with the practical things that need to be done when someone dies, such as liaising with utility providers, resolving pension enquiries, valuing property, dealing with financial advisers, closing bank accounts, and so on.

“Solicitors typically concentrate on probate and the distribution of assets – rarely will they consult with the client’s financial adviser. A solicitor can therefore undermine the financial planning that was carried out prior to the client’s death,” observes Müdd.

“In contrast, a good estate administration firm will work closely with the financial adviser to ensure the deceased’s assets are transferred promptly and in a tax-efficient manner. For instance, there may be circumstances when transferring assets ‘in specie’ rather than encashing them is more tax-efficient,” he says.

Even finish

Most of us will spend our working lives providing for our loved ones. It seems logical that we would also want to lessen the burden on them when we pass away. Unnecessary stress, unexpected obstacles, and a gruelling or difficult estate administration experience can all interrupt the healing process. Thus, many of us will prefer that our estate is administered by a specialist.

“Along with mitigating the impact of Inheritance Tax and planning for care costs in later life, clients need to consider how their estate will be managed when they do pass away,” says Tom Curran, chief executive of estate administration specialists Kings Court Trust.

“We are well aware that being an executor can be challenging, with potentially serious ramifications for you and your family if you get things wrong. At Kings Court Trust we offer a comprehensive estate administration service and we take full legal responsibility for administering the estate from beginning to end. This offers peace of mind to our clients and means that they have one less thing to worry about at an already challenging time.”

Acting as an executor isn’t straightforward and your family may not want to take on the role. In this case, you should consider appointing a professional executor such as an estate administration service, especially if your estate is particularly large or complicated.

 

The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on individual circumstances.

Wills are not regulated by the Financial Conduct Authority. Will writing involves referral to a service which is separate and distinct to those offered by St. James's Place.

Some of the products and investment structures documented within this article will not be available to our clients in Asia. For information on the funds that are available please get in touch.

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