Lance Ranger, Attendus Company AG director, is an English solicitor specialising in private client work. He is a member of the Society of Trust and Estate Practitioners or STEP. This article will look at the topic of estate planning, exploring key considerations for benefactors and how STEP practitioners help clients to draft wills and trust documents, advising families, assisting with the administration of estates and acting as trustees where necessary to help clients preserve and pass on assets to future generations in accordance with their wishes.
STEP is a global professional body whose members include lawyers, financial advisors, accountants and other professionals who help families to plan their futures. The organisation sets professional standards, as well as training and educating members to ensure that those standards are upheld.
Full STEP members are known as ‘TEPs’ or Trust and Estate Practitioners. TEPs are experts in succession and inheritance planning and can be accessed via the STEP Directory.
Applying for probate confers a legal right to deal with an individual’s estate after they die. A solicitor can help to apply for probate to make the process easier, helping the family to avoid incurring penalties by submitting the wrong information.
In England and Wales, there are two types of grant that confer the legal right to deal with the deceased’s estate. A grant of letters of administration is used where an individual did not make a will, while a grant of probate is obtained if they did make a will. Both documents may also be referred to as a ‘grant of representation’.
When someone makes a will, they name at least one executor to deal with the administration of their estate following their death. Grants of probate are issued by the Probate Registry, which forms part of HM Courts & Tribunal Service. A grant of probate confers a legal right to the person named within it to deal with the deceased’s estate.
If an individual is named as executor but cannot or does not wish to act in this capacity, they can either lodge a form of renunciation at the Probate Registry with the will or file an attorney form appointing someone else to apply for the grant of probate.
In a situation where the deceased has made a will but their relatives are unable to find the original, the relatives should contact the solicitor who drew up the will to help them trace the document.
Where an individual did not make a will, their next of kin or spouse may apply to administrate their estate. It is not necessary to apply for a grant of representation in all circumstances, for example where an individual’s property was jointly owned; consisted of savings bonds, which some financial institutions will release without a grant; or where the estate was very modest in value, consisting of net assets of less than £5,000 in value, with no house or land.
Estate planning is the process of preparing a plan of action for transferring assets to next of kin and other beneficiaries, enabling benefactors to transfer their wealth in the most tax-efficient manner possible. An individual’s estate comprises all assets they own, such as property, life insurance policies, pensions, investments, savings, antiques, debt and any vehicles they own at the time of their death.
An estate plan details what will happen to the benefactor’s assets after their death, clearly identifying their net worth and making an official declaration of how they wish those assets to be distributed. An estate plan may be used to make gifts and create trusts, helping to pave the way for smooth transferral to family or other beneficiaries. Estate plans may also deal with other issues, such as making charitable donations, which can be an effective means of reducing inheritance tax bills.
A last will and testament is a critical legal document that outlines the benefactor’s wishes in terms of who they want to deal with the administration of their estate and how they want their assets to be distributed. Executors named in a will are responsible for securing assets and using them to settle any outstanding debt, including any inheritance tax owed. Once all liabilities have been paid, the executor then distributes the remaining assets in accordance with the testator’s wishes as set out in the will.
Where an individual fails to create an estate plan or execute a will before they die or become incapacitated, they are deemed to have died intestate. In such circumstances, their estate is administered and distributed in accordance with the laws of intestacy, which may not align with the benefactor’s true wishes. Estate planning, and in particular executing a will, is therefore crucial in terms of ensuring that the testator has their say over who will deal with the administration of their assets after their death, as well as enabling them to exercise control over who should inherit what and when.