What is a deceased estates notice?

Posted on By Joanna Pegum
man reads newspaper

If you’re acting as the executor of a will, before you distribute the estate to beneficiaries, and after you have gained grant of probate (or confirmation in Scotland), you will need to consider claims from creditors against the estate of the person who has died.

How can I tell if the deceased had hidden debts?

For most estates, even if you think you’re familiar with the affairs of the deceased, you can’t be sure that all creditors have been identified.

Many people now conduct much of their financial affairs online, and this poses a growing risk for executors of a will. Even if you had a close relationship you may be unaware of the deceased’s online accounts, including shop and credit cards.

As an executor, you’re liable for debts that belonged to the deceased, so you may have to pay these once they’ve been claimed and proved. You are covered, however, if you place a deceased estates notice in The Gazette and in a newspaper that’s local to where the person lived.

You can find deceased estates notices that have been placed in the London, Belfast and Edinburgh Gazettes here, as well as the latest list of newspapers by district. You can do this via The Gazette or contact newspapers direct.

Which laws does a deceased estates notice relate to?

In the UK, this protection from creditors and potential beneficiaries comes from a statutory advertisement that is referred to within the Trustee Act 1925 in England and Wales and the Trustee Act 1958 in Northern Ireland, as well as the Confirmation of Executors (Scotland) Act 1823.

While it’s not a compulsory notice, and not every executor places one, it’s recommended as an act of due diligence, and for the executor’s peace of mind.

How does a deceased estates notice work?

Once you’ve placed the deceased estates notice in The Gazette and in a newspaper, claims can be made for a limited period, namely for two months and a day.

After this time, you’re considered to have made enough effort to locate creditors and potential beneficiaries before distributing the estate. As the executor, you will not be held liable for any unidentified debts after this time.

Is placing a deceased estates notice essential?

It’s not a legal requirement to place a deceased estates notice, but it is advisable, and most solicitors place them as a matter of course (in a 2016 Gazette survey, 80 per cent of probate professionals always placed one if acting as professional executor).

If you don’t place a notice, and a creditor subsequently comes forward after the estate has been distributed, you may have to pay an unidentified debt, for whatever that amount may be.

How much does a deceased estates notice cost?

See the latest pricing for placing a deceased estates notice in The Gazette and in a newspaper local to the deceased here.

You can recoup the cost of the notice from the estate before assets are distributed.

When should I place a notice, and how do I do so?

You can place a deceased estates notice once you have at least one of the following as proof, where applicable:

• Grant of probate
• Letter of administration
• Death certificate

To place a notice in the Gazette, you’ll first need to register and then go to Place a deceased estates notice. If you don’t want to publish your personal address for claims, you can use a PO Box forwarding address.

For more information on what to do when someone dies, see The Gazette’s probate checklist.

Should I change my Enduring Power of Attorney to a Lasting Power of Attorney?

Posted on By Joanna Pegum
couple with computer

In England and Wales, Enduring Powers of Attorney (EPAs) were replaced by Property and Financial Affairs Lasting Powers of Attorney (LPAs) in 2007, following the introduction of the Mental Capacity Act 2005 (MCA 2005).

Reasons for the change included:

• There was no guarantee that the person who made the EPA had sufficient capacity;
• As registration was only needed when the attorney believed that the person making the EPA had become (or was becoming) mentally incapable of manging their affairs, EPAs were open to abuse from an unscrupulous attorney; and
• The EPA did not allow for the delegation of health and care decisions.

What is the procedure for putting in place an LPA?

Before being able to decide whether you should change your EPA for a Property and Financial Affairs LPA, you need to consider the new procedure for putting in place an LPA, which is as follows:

• Fill in the LPA form and sign it.
• Choose someone to sign as a ‘Certificate Provider’. The Certificate Provider must check the MCA 2005 conditions are satisfied must check the MCA 2005 conditions are satisfied and confirms that the person making the LPA has capacity, understands the LPA, and is not creating it because of undue influence or pressure. The Certificate Provider can be someone who has known the person making the LPA for at least two years or someone with the appropriate professional skills, such as a GP or lawyer.
• Ask the attorney(s) to sign the LPA form.
• Register the LPA with the Office of the Public Guardian. This last step costs £82 (unless you qualify for a fee exemption or remission) and the LPA needs to be registered before the attorney(s) can act. The LPA does not have to be registered immediately, but it is sensible to do so, to avoid any delays.

Should I change my EPA to an LPA?

So should you change your EPA to a Property and Financial Affairs LPA? In general, the answer to this question is that there is no ‘need’ to change an EPA that has been competed correctly, but there may be some virtue in doing so.

The more in-depth LPA form directs you to think through matters that were not addressed, or were not even an option, within the EPA form, such as:

• Naming backup attorney(s);
• Stating instructions to the attorney(s) – be it positive or negative, eg ‘you must do’ or ‘you cannot do’;
• Expressing preferences to the attorney(s) – general thoughts and wishes as to how you would like your financial affairs conducted; and
• Requesting that notice is given to someone when registration takes place, if registration does not take place immediately.

What about Health and Welfare LPAs?

This article focuses on EPAs and their replacement, Property and Financial Affairs LPAs. But don’t forget that you can also put in place a Health and Welfare LPA to give your attorney(s) power to take health and social care decisions on your behalf.

You can find more information on LPAs in the leaflet ‘Why make a Lasting Power of Attorney?’

Philip Warford TEP is Managing Director of Renaissance Legal, Brighton, UK

I am unhappy with the personal representatives administering an estate. What can I do?

Posted on By Joanna Pegum
Annoyed

As a beneficiary, you have the right to challenge the personal representatives (often known as ‘executors’) of an estate if you have concerns as to whether they are administering it properly.

A personal representative may be liable for the mismanagement of the estate, a breach of trust, or a breach of their fiduciary duty. Assets held by to personal representatives on trust for the beneficiaries of the estate and there may also be other express or implied trusts on which they hold the estate.

How can I establish if they are doing something wrong?

In order to establish whether something has gone wrong, you need the relevant information. As a beneficiary, you are entitled to receive copies of the estate accounts. If your request is declined by the personal representatives, then provided a grant of probate or letters of administration have been issued, an application can be made to court for the personal representatives to fulfil their obligations.

What can I do about it?

If you discover that a personal representative has not been administering the estate appropriately, and you have exhausted all other avenues of possible settlement, you could consider issuing proceedings against the personal representatives for the estate to be restored on the basis that they have acted in violation of their duties to the beneficiaries.

You should consider whether the act complained of is a devastavit (breach by the personal representative of their duty to administer the estate), a breach of trust, or a breach of fiduciary duty, and whether the personal representative is covered by professional indemnity insurance or has assets in their own name to render a claim commercially viable. There may be an exculpatory clause in the will that the personal representative is able to rely on.

In certain cases it may be that an application for the removal of the personal representative is necessary, and this again would involve a court application.

Seek advice

If you are considering taking action against a personal representative you should seek professional advice from a qualified practitioner who specialises in contentious estates. They can consider your case, examine all options and advise on the best course of action.

Caroline Miller TEP is a Partner and Head of the Private Client Team at Wedlake Bell in London, UK.

Could my will be challenged by friends or relatives after my death?

Posted on By Joanna Pegum
family on bench

Under the laws of England and Wales, an individual has complete testamentary freedom. This means that you have the right to leave your estate to whomever you choose.

Certain classes of family members and dependants can, however, potentially challenge your will after your death under the Inheritance (Provision for Family and Dependants) Act 1975 (1975 Act), if they feel that inadequate provision has been made for them.

On what grounds could someone make a 1975 Act claim?

In order for someone to commence a 1975 Act claim, they would need to show that they have maintenance needs and the provision they have received from your estate is not reasonable to meet those needs.

Where, for example, your children are grown up and self-sufficient, their ability to use the 1975 Act is limited: just because they feel unfairly treated, does not mean that they are necessarily entitled to a bigger slice of the pie.

How much could they claim?

The level of provision that a claimant bringing a claim under the 1975 Act can hope to receive from your estate will depend on whether they fall within the category of spouse or civil partner, or one of the other categories, which includes: former spouses or civil partners, your children, someone you treated as a child, or someone who you maintained prior to your death.

Your spouse or civil partner could expect to receive from the court ‘such financial provision as it would be reasonable in all the circumstances of the case for a husband or wife to receive, whether or not that is required for his or her maintenance’.

For all other categories of claimant, they could expect to receive such provision as would be reasonable for them to receive for their maintenance only.

How can I avoid my will being challenged?

The best way to avoid your will being challenged after you die is to consult a professional advisor, who can consider your circumstances and ensure you have done everything reasonable to prevent this eventuality.

Caroline Miller TEP is a Partner and Head of the Private Client Team at Wedlake Bell, in London, UK