“A woman was sentenced to two years in prison for fraud and money laundering in relation to the will of a Pevensey woman for which she was sole executor.”
This seems to have been a case of deliberate fraud, but many executors commit acts of fraud for the simple reason that they don’t understand the Law surrounding executors and Wills and the payment of inheritance tax.
If you are an executor of an estate that you are not the beneficiary of and you administer the estate incorrectly, you may be personally liable for any loss to a particular beneficiary.
In those circumstances it may be better to instruct us to administer the estate on your behalf, so that we take that risk instead of you. Not only are we unlikely to make the error in the first, but we also have professional indemnity insurance in place up to £3 Million, so all our client’s have peace of mind.
HM Revenue & Customs have a policy of vigorously investigating a sample of Probate applications, to check whether the correct amount of inheritance tax has been paid. There are penalties and interest to pay, even if the mistake was inadvertent. That is why it is essential for executors to take legal advice where trusts have been set up by the deceased, or the deceased is a beneficiary of a trust, where there are foreign assets or liabilities, where the deceased has made gifts within the last seven years.
Inheritance Tax is pretty much an avoidable tax with the correct lifetime planning (which we can help with) or even within two years of the deceased’s death via Deed of Variation. A Deed of Variation is a document which can sever joint tenancies in land and buildings retrospectively and create Wills retrospectively after someone has died that re-direct inheritances to another person or trust, that are treated for inheritance tax purposes and capital gains tax purposes as if the deceased had made the will or severed the joint tenancy during their lifetime.
Inheritance Tax is an area of tax law with lots of hidden problems which are only obvious to experts. Gifts with Reservation of Benefit, failed Potentially Exempt Transfers (‘PETs’), gifts out of Normal Income and a host of other peculiar (to the layman) issues can arise.
If there is any possibility of inheritance tax then advance planning can save a fortune, and post death work with Deeds of Variation may be very beneficial too, often permitting tax planning post death strategies to be put in place that can save hundreds of thousands in inheritance tax.
Whether you are a single person or couple, talk to us in good time! However, if you are an executor in an estate where there is any possibility of IHT being due, contact us – we’re the Eastbourne area Inheritance Tax specialists.