People who have drawn up a will commonly assume that their assets will be quickly and easily distributed to their beneficiaries according to their wishes when they pass away. Unfortunately this is not the case. Settling your assets in to a trust can be a solution.
Receipt of “probate” is the first step in the legal process of administering an estate and it is required before any of the deceased person’s assets can be distributed. Probate involves having all the assets in an estate valued and then getting these valuations approved by the courts.
This article in The Daily Telegraph gives an indication of what your executor(s) – the person(s) named in the will as responsible for dealing with the estate – have to go through when it comes to obtaining a grant of probate.
In this instance, probate was granted after eight months even though the estate included only a few assets. For more complicated estates the process can take up to two years. If more than one jurisdiction is involved – for example if a foreign holiday home forms part of the estate – then the issues can multiply.
Until probate is granted the deceased’s bank accounts are frozen, which means that any liabilities need to be paid by family members. In countries that impose IHT, such as the UK, the tax needs to be paid before probate is granted (usually within six months). This means that significant tax bills often have to be paid before beneficiaries can access the assets of the deceased to pay them. There are also usually hefty legal fees to be paid.
So what can be done to ease the strain for those left behind? Settle your assets into a trust.
Assets held within a trust can be distributed to beneficiaries before probate is granted. The trustee can pay your tax and other liabilities on behalf of your estate and then distribute your remaining assets according to your wishes. This is particularly important when your family is dependent on these assets to fund their daily living expenses.
Trusts can offer increased flexibility and the ability to avoid probate and/or the additional fees possibly required for probate. For more information about how to settle your assets into a trust.
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