Q&A on Probate, Inheritance Tax, Funeral Expenses
Solicitor Katy Burgin answers questions on Probate law.
Q. My dad has just inherited a large sum of money from his brother. As my father already has a large house and substantial savings he wants to give the money to me so that there will be no Inheritance Tax to pay if the money is still in his bank account when he dies. Is he allowed to do this?
A. Yes, your dad can do as he wishes with the money. However, to ensure any Inheritance Tax payable on his death is minimised it might be advisable for him to sign a Deed of Variation which means that for Inheritance Tax purposes it is as if you had inherited the money directly from your uncle. The Deed of variation must be signed within two years of your uncle’s death. I would suggest that your father contacts one of our solicitors to seek advice.
Q. I am worried that when I die my children will not be able to withdraw money from my bank account to pay for my funeral. Also, a friend has told me that any Inheritance Tax due on my estate must be paid before my children can apply for a Grant of Probate which will allow them to withdraw money from my bank. Will my children have to take out a loan from a bank?
A. Firstly, although your bank account will be frozen on your death, the bank will release a cheque payable to the funeral directors for your funeral if they are provided with a copy of the invoice. Secondly, although it is true that some Inheritance Tax may have to be paid before an application can be made for a Grant of Probate the Inheritance Tax on certain assets, for example the deceased’s home can be paid by instalments. Also, some banks will release funds directly to HM Revenue and Customs for the payment of Inheritance Tax in order that the application can be made for a Grant of Probate.
Q. My sister has died. She has left her estate to her only daughter who is now 30 years old. My sister signed her will 20 years ago when her daughter was 10 years old and named me as executor. I now live in South America. I rarely come back to the UK and communication is difficult as the postal service is very unreliable and I only have access to a friend’s computer. Do I still have to act as executor or can I let my niece sort things out herself as she is quite capable of doing so?
A. No, you don’t have to act as an executor. You can renounce probate which means you are giving up all rights to deal with the estate and your niece can take out a Grant of Probate as residuary beneficiary. Alternatively, you could nominate someone as your attorney which means they will administer the estate on your behalf.
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