Should I Use a Last Will or a Living Trust to Distribute My Estate?


Even if you didn’t think a will was important in the past, the last 18 months of Covid-19 will undoubtedly have changed your mind! But the other topic that’s being discussed at length is trusts. Both are legal documents that detail how you want your assets to be distributed but there is a fundamental difference between a trust and a will.

Whilst estate planning via a will is vitally important, a trust could be just as beneficial, if not more so; or, indeed, combining the two may be the ultimate solution. So, to help you decide whether you need a will, a trust or both, let’s clarify what a will is, what a trust is, and how they may be beneficial for you.

What is a last will?

A last will details your wishes and who benefits from assets and/or property, i.e. your estate, after you die. In the majority of cases, you will appoint an executor, or executors, in your will and it is their job to manage your estate upon your death, including selling any property, paying outstanding bills, as well as dealing with HMRC to pay any inheritance tax due. One thing to point out; before you assign an executor(s) to your will, make sure you have asked that person, or persons, if they are happy to take on the role as it is demanding and involves a lot of paperwork!

You are only allowed to include any assets or property that you own, i.e. they are in your name only. So, if the property you live in is jointly owned with your spouse or partner, it will automatically revert to them upon your death.

What is a living trust?

A living trust is a form of will in which your beneficiaries will benefit from your property and/or assets but while you are still alive. You appoint trustees to oversee the management of the trust and hold legal title to the assets defined in the trust upon your death. There are a number of reasons why you may choose a trust over a will, including:

● You’d like your beneficiaries to benefit from your assets while you are alive, i.e. paying school fees
● You want to protect your property and/or assets from paying less, or no, inheritance tax
● Your beneficiary is not able to fully benefit from your assets as they are incapacitated.

Differences between a last will and a living trust

The main difference between a last will and a trust is that a will only comes into force when you die, whilst a trust can start to benefit your chosen beneficiaries while you are still alive.

The main benefits of a will over a trust is that you can name guardians for any minor children, appoint an executor to handle your estate upon your death to relieve the burden from your loved ones, and detail your final wishes.

Just because there is a last will doesn’t mean the executors of your will don’t have to apply for probate. If your estate is valued at more than £5,000 in total, they must apply for probate. If there are very few or no assets in your estate and its value is less than the £5,000 benchmark, probate is not always necessary.

With a living trust, you maintain control over the trust and how it is managed until your death, at which point the appointed trustees take over and administer the trust according to your wishes. For example, if a beneficiary receives an interest payment from the trust and it is your wish that they don’t have access to the trust in full until they are 21 years of age, but you die before they reach this age, the trustees will continue to ensure the interest payments are made until that person reaches 21 years old.

Assets in a living trust are not part of the probate process and are therefore protected from inheritance tax. In addition, jointly owned assets and property can also be included in a trust, whereas they can’t in a last will.

Whereas a last will ‘leaves’ assets and property to a beneficiary and is therefore subject to probate as well as inheritance tax, assets and property in a living trust are owned by the trust, i.e. they have been transferred to the trust. This means they are not subject to probate as they can’t be ‘passed on’. The grantor is a trustee of their own living trust and manages the assets and property within it until they die, at which point successor (named) trustees take over the role. They will administer the trust and either continue its management for a period of time or distribute its property to your named beneficiaries in the trust documents.

Because of the probate process, your assets and property detailed in a last will are a matter of public record. It is filed at the courthouse and anybody can access the details. However, a trust is a private record that only you, the appointed trustees and the beneficiaries have access. The only time that this would change is if a beneficiary or heir challenges the trust’s validity and files a lawsuit, at which point the trust documents become evidence.

Can I have a last will and a living trust?

Estate planning via a will is just one option of protecting your assets and property upon your death and ensures the people you wish benefit actually do. But combining it with a living trust, particularly if your estate is large and complex, ensures the best financial and legal protection for your estate.

However, to combine the two, it’s better to have a Pour Over Will which is designed to specifically work with a living trust. Essentially, it means that any assets or property you own that isn’t included in your trust will be transferred to your trust upon your death.

If you’re not sure what type of will or trust is right for you, contact us at Probates Online. We offer a professional online probate service that is efficient and affordable. If you are an Executor of a will or a trustee, or a close relative of a deceased person and you need to apply for a Grant of Probate, or would like to take advantage of our entire Estate Administration service, visit our website for more information or contact us today.

What to Do When Someone Dies: Do You Need a Probate Solicitor?

probate solicitor

When someone dies, it’s a very stressful, emotional time, especially if they were a close relative or family member. However, there are some procedures that must be done immediately, and some things that are legally required.

A question that always arises is, do I need a solicitor to apply for probate? In some circumstances, it is possible to apply for probate yourself but in other cases, where there’s no will or the deceased’s estate is complex, getting help from a solicitor is the best policy.

Steps to take when someone dies

Whether the deceased died at home, in hospital, in a care home or even abroad, the doctor attending will issue you with a Medical Certificate of Cause of Death. This is possibly one of the most important documents you will need.

● Register the death – you will need to register the death within 5 days, or 8 days if in Scotland. The 5-day period includes weekends and bank holidays. You will need to register the death at your local Register Office, if they died at home, or the Register Office local to the hospital/care home. Only a close relative can register the death, but if no relatives are available, it can be done by someone who was present when the person died, someone who lives in the house where the person died or someone who is arranging the funeral (but not the funeral director).

● Arrange the funeral – this can only take place after the death has been registered. It can be arranged by a funeral director on your behalf, or you can organise it yourself. In some cases, the deceased may have made their own funeral arrangements before they died.

● Advise relevant government departments – whether they are receiving benefits, allowances or a state pension, or if they are still working, you will need to notify the relevant government departments. This can be done using the Government’s Tell Us Once online service.

● Bereavement benefits – you may be eligible to receive financial support, such as the Bereavement Support payment or Guardian’s Allowance.

● Benefits, pensions and taxes – if your spouse/civil partner has died, you will need to manage theirs and your own benefits, pensions and taxes.

● Hear the will (if there is one) and deal with their estate – you may need to apply for grant of probate or letters of administration. If the deceased left a will, it advises who the beneficiaries are and other details. If there is no will, the estate will need to be valued.

Applying for probate

Whilst it isn’t compulsory in England and Wales, many people use a solicitor to apply for probate. There are quite a few legal procedures that need to be adhered to and having a solicitor handle the matter for you can greatly ease the burden, particularly if the deceased was your spouse/civil partner or close relative.

If probate is required and not applied for, the deceased’s estate cannot be accessed nor transferred to their beneficiaries and sits in limbo. Probate grants legal authority to the person that applies for it to deal with the deceased’s estate. It’s not wise to assume that assets are in joint names; it is better to check all the relevant details.

DIY probate

If you are named an executor in their will, or if there is no will but you are their next of kin, you will be responsible for completing probate for their estate. The probate process can be a lengthy process, time-consuming and if the deceased’s estate is large and/or complex, there is the potential to make mistakes, which will cause further delays and you could be held legally or financially responsible.

In some cases, using a solicitor to apply for probate may not be necessary. For example, if there is no property, land, shares or investments as part of the estate and is worth less than £5,000, and whether the deceased owned the estate outright or in joint names. But in most situations, the deceased’s bank, building society or any other financial firm may insist on probate to close their accounts and release any funds. If you choose to apply for grant of probate yourself, complete the necessary forms, including the value of the estate, working out how much inheritance tax (IHT) is due and making the payment to HMRC, liquidate (sell) any assets and distribute the estate to beneficiaries. You can opt for a DIY Probate Pack, which can be bought online, and includes all the relevant documents to be completed and provide informative guidelines on how to apply for probate. However, be aware that there is no legal support network to offer advice should an issue arise during estate administration.

Probate through a solicitor

If the deceased’s estate’s value is in excess of £5,000, including property, land, investments or shares, or a business that needs to be liquidated, or if there is no will, using a solicitor to apply for probate is the best option. Even if you are a named executor, working with a probate will take much of the burden off your shoulders and ensure you have the right legal advice on tap if you need it.

A probate solicitor will handle applying for grant of probate, or letters of administration if there is no will, as well as deal with all the legal, tax and estate administration processes. If the deceased’s estate is large or complex, i.e. involves multiple properties, extensive investments and trusts, the deceased may well have put the estate administration process into the hands of a solicitor as part of his wishes in their will.

One word of warning; some banks and solicitors have been known to charge relatives around 6% of the total value of the estate. Legally, this is not part of the probate or estate administration procedure. If you are choosing to use a solicitor to help you with the probate process, select one that offers a fixed probate fee upfront.

At Probates Online, we offer a professional probate service online that is efficient and affordable. If you are an Executor of a will or close relative of a deceased person, and you need to apply for a Grant of Probate or would like to take advantage of our entire Estate Administration service, visit our website for more information or contact us today.

Wills, Probate and Estate Management in a Covid-19 World

Wills Probate and Estate Management

The past 18 months have not been easy on many families due to the number of deaths caused by the coronavirus pandemic. In turn, the impact of Covid-19 on probate, as well as the management of wills and estates for individuals and families, has been significant.

When there are as many as 59% of the UK population without a will, the level of people dying ‘intestate’ – without a will – has been extremely high. As of April 2021, the Ministry of Justice (MoJ) reported that the average wait for Grant of Probate was now 35 working days; in the last quarter of 2020, it stood at around seven weeks (40 days). However, in reality, these figures don’t reflect the real situation.

Evidence suggests that only if a Grant of Probate application wasn’t ‘stopped’ did it stand a chance of being approved within the seven-week time frame. Reasons for it being stopped, could for example, include: an error on the application, more information being required or a dispute over who is applying for Grant of Probate. In reality, applications that were ‘stopped’, which happened far more than expected, were at around 12 weeks. Ironically, applications for Letters of Administration for estates without a will took less time (around nine weeks) than those for estates with a will (around 14 weeks). One would think that having a will would ensure the application was dealt with in a timely manner.

Initially, following the first lockdown, there were fewer Grant of Probate applications. This was put down to the fact that executors were often unable to get the documents they needed, such as the will, to go with an application. Once measures had been put in place to allow access, there was a sharp increase which was felt by The Probate Registry. To reduce the time it took to register a person’s death, they started to accept electronic signatures and encouraged legal professionals (as well as executors and families) to use their digital service. That said, certain documents still needed to be sent via the post, such as the original will.

How long does probate take?

Before the pandemic, the time to complete the probate process took seven to 12 months, but that was only if the estate was simple and there was a will. If there was no will or disputes, it could take longer. Sadly, the impact of Covid-19 on probate has caused major delays, particularly if the probate process involves the sale of property.

With so many in the property market being affected by the pandemic there is still a significant backlog of probate properties to be sold. Remember, it wasn’t really until the second lockdown of 2020 when estate agents were allowed to work again in an effort to keep the economy stable. The stamp duty holiday didn’t appear to have impacted this backlog as much as was hoped, and since the SDLT holiday has ended, it did little to help the situation.

The impact of Covid-19 on staffing levels

The fact that so many legal professionals, support staff, staff in courts, the Probate Registry and HMRC had to work from home also had a major impact on the probate process and estate administration.

Although many offices are now being staffed, the impact of Covid-19 on probate is still being felt because of the backlog experienced among surveyors, probate services, conveyancing professionals and estate agents.

There is added pressure for many estate administrators from HMRC. Inheritance Tax (IHT) on an estate must be paid within six months from the date of death and prior to Grant of Probate being issued. But, if the property is the main asset and it has to be sold before any payment to HMRC can be done, it means that many families have had to find the money to pay HMRC before they see any form of funds back from the estate. Although HMRC may accept instalments while the property is being sold (with the balance being paid once funds are available), there is still only a finite amount of time.

Online probate application

In addition to the lockdowns, solicitors, lawyers and the courts were forced to work from home which resulted in the introduction of the electronic probate forms in May 2020. The Law Society and the HM Courts and Tribunals Service (HMCTS) wanted legal representatives and private individuals to move over to the new online system by 18th May 2020 and submit probate applications via their new virtual paper forms. HMRC also started to send the IHT421 forms directly to the Probate Registry within 15 days of being issued.

However, there were plenty of instances where communication fell by the wayside – the legal professionals weren’t always aware the right forms had been sent to the Probate Registry and they also found HMCTS’s new online system difficult to use unless the deceased’s estate was simple.

Making a will and its execution

This is another area that was severely impacted during the pandemic. As dictated in Section 9 of the Wills Act 1837, for a will to be valid it must:

● Be in writing.
● Be signed by either the person making the will (the testator) or another person in the presence of the testator and at the direction of the testator.

In addition to this, the Act specifies that it must be signed in the presence of two or more witnesses who:

● Are present at the same time when the will is signed and they must see it signed.
● Must each attest and sign the will in the presence of the testator.

Of course, with lockdowns, social distancing and self-isolation over the past 18 months, to satisfy these requirements has become nigh on almost impossible. In Scotland, the rules were changed temporarily whereby a solicitor could act as a witness via video conference, as long as they were not an executor of the estate or any trust associated with it. However, in England and Wales, these measures were not taken, although witnessing through a window was considered acceptable.

Registering a death, applying for Grant of Probate or Letters of Administration, administering an estate, selling property, paying IHT, dealing with banks and sorting other financial assets; all these aspects have an impact on the families left behind. The impact of Covid-19 has only served to heighten the issue and, as we head into another winter and more potential restrictions, tensions are running high.

At Probates Online, we offer a professional probate service online that is efficient and affordable. If you are an executor of a will and need to apply for a Grant of Probate or would like to take advantage of our entire Estate Administration service, visit our website for more information or contact us today.