When someone passes away, their estate — which includes their money, property, and possessions — needs to be distributed according to their Will, or, if there is no Will, according to the rules of intestacy. This process is known as probate. For high net worth individuals, the probate process can be complex and often requires professional guidance to ensure the efficient and legally sound administration of their estate. At Blackstone Solicitors, we specialise in probate for high net worth individuals across England and Wales, helping to navigate this often daunting process.
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Free Initial Telephone Discussion
For a free initial discussion with a member of our New Enquiries Team, get in touch with us today. We are experienced in dealing with all the legal aspects of Probate and once instructed, we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you are on the best possible footing from the start and also avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
What Is Probate?
Probate is the legal process of administering the estate of a deceased person. This involves:
- Identifying and valuing the deceased’s assets,
- Paying off any outstanding debts and taxes,
- And finally, distributing the remaining assets to the beneficiaries.
If there is a valid will, the executor named in the will is responsible for applying for a “grant of probate,” which gives them the legal authority to deal with the estate. If there is no will, an administrator is appointed by the court through a “grant of letters of administration.” The responsibilities of executors or administrators are extensive, and mistakes made in the probate process can lead to personal liability, which is why professional advice is highly recommended.
The Complexity of High Net Worth Estates
The probate process for high net worth individuals is significantly more complex than for smaller estates. Several factors contribute to this complexity, including:
- Asset Valuation
High net worth estates often contain a diverse range of assets, including properties, businesses, overseas investments, trusts, and luxury items such as art, jewellery, or vehicles. Accurately valuing these assets is crucial, not only for distributing the estate but also for calculating inheritance tax (IHT). Specialist valuers may be required to assess the worth of complex assets such as shares in private companies, rare collections, or overseas property. - Inheritance Tax (IHT)
In the UK, inheritance tax is levied at 40% on estates worth more than £325,000, although various exemptions and reliefs may apply. High net worth individuals may have taken steps during their lifetime to mitigate their IHT liability, such as setting up trusts or gifting assets. However, even with careful planning, the IHT process can be complicated. Executors must submit an IHT400 form to HMRC detailing the estate’s value and any applicable tax reliefs. Executors also need to ensure that the correct amount of tax is paid, which can sometimes require asset sales to raise funds. - Overseas Assets
Many high net worth individuals hold assets in multiple countries, which can significantly complicate probate. Different jurisdictions may have different inheritance laws, and taxes may be owed both in the UK and overseas. This can result in complex cross-border probate procedures, especially where there is no reciprocal agreement between countries. Double taxation treaties can sometimes offer relief, but navigating the international probate landscape requires expert legal and tax advice. - Disputes Between Beneficiaries
While disputes can arise in any probate situation, they are more likely in high net worth estates due to the larger sums of money and valuable assets involved. For instance, family members may challenge the validity of a will, dispute the value of an asset, or claim that they have been unfairly treated. Disputes can delay the probate process considerably and may result in expensive litigation. Mediation is often a preferable option, but it’s essential that executors seek legal advice if any disputes arise. - Business Assets
High net worth individuals may have significant business interests, whether through directorships, shareholdings, or ownership of private companies. The fate of these businesses after the individual’s death can be crucial to both the estate and the ongoing livelihood of employees or family members. Business continuity planning, including setting up structures such as family trusts or passing shares through a will, can ensure a smooth transition. However, even with a plan in place, probate involving business assets requires careful attention to detail and financial planning. - Trusts
Trusts are commonly used by high net worth individuals to manage their wealth during their lifetime and to mitigate inheritance tax. While the assets held in trust are usually outside of the estate for IHT purposes, the executor may still need to deal with the administration of the trust as part of the probate process. There may be ongoing obligations for trustees or even disputes about the trust’s management. In some cases, executors will need to coordinate with trustees and beneficiaries to ensure that the trust functions as intended after death.
How Can Probate Be Simplified for High Net Worth Individuals?
Given the complexities that high net worth individuals and their families face during probate, thorough planning is essential. While probate can’t be avoided altogether, several steps can be taken to simplify the process:
- Comprehensive Estate Planning
High net worth individuals should work with solicitors and financial advisers to ensure that their estate is structured in a tax-efficient manner and that their wishes are clearly documented. This may involve updating a will, setting up trusts, gifting assets, or reviewing ownership structures for business interests. Having a clear plan in place can make the probate process smoother and reduce the likelihood of disputes. - Regular Asset Review
For those with complex and high-value assets, it’s crucial to regularly review and update the valuation and ownership details. This ensures that the executor has an accurate record of the estate when the time comes and minimises the risk of discrepancies in the estate’s value. - Appointing Professional Executors
Given the potential liabilities and complexities involved in managing high net worth estates, it is often advisable to appoint a professional executor. This could be a solicitor or a trust company with experience in managing large estates. Professional executors are familiar with the probate process, tax obligations, and the management of assets, and their impartiality can help prevent family disputes. - Cross-Border Planning
For individuals with overseas assets, ensuring that your estate plan addresses the inheritance laws of the relevant jurisdictions is essential. This may involve drafting multiple wills or working with international lawyers to ensure that probate can be administered efficiently in all countries where assets are held. - Preparing for Inheritance Tax
If your estate is likely to be subject to inheritance tax, it’s important to have a strategy for how the tax will be paid. This could involve setting aside liquid assets or arranging for life insurance policies that cover the IHT bill. Executors are required to settle any IHT before distributing the estate, and without sufficient liquidity, they may need to sell valuable assets to cover the tax.
How we can help
We have a proven track-record of advising upon all aspects of private client work. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.to incorporate, what kind of ownership
How to Contact Our Private Client Solicitors
It is important for you to be well informed about the issues and possible implications of dealing with probate. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Trust solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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