Is life insurance part of the estate?

greenbee

I've just had a proposal from my dad's solicitors' with stating their service and charges for administering his estate. As the estate is relatively simple (4 investments and a house that transfer to my mother) and much of what they list in the service isn't relevant I'm not hugely impressed. But it gives me an idea of what I need to do.

They have asked questions about his pensions which I assume are for income tax purposes (I'm perfectly capable of completing his tax return myself and HMRC have already sent me the paperwork), and also about his life insurance stating 'I understand that your late father had the benefit of a life insurance policy'. Now the one thing I've very clear on is that as he is dead, he doesn't benefit from the policy, my mother does. :cool:

Is there a reason that this insurance policy should be included in the estate rather than forming part of my mother's assets? (Both legally and from a tax perspective).

The insurance policy has already been paid, and my mother is using the money to pay the bills and live on while the pension situation is sorted out.

I'm time poor, as is my brother (who is also an executor) so we are going to have to use a third party to get the estate through probate, but there are cheaper options available. I just need to get the original will and a few other bits of paperwork from my dad's solicitor, but it would be good to know what I'm talking about and have all the paperwork in place for the person I decide to engage to minimise the work involved.

Brighty

Depends on the policy i believe. Some pay to a named person and are not part of the estate, others are. YOu need to read the wording of the policy i think

securityguy

Brighty wrote: »

Depends on the policy i believe. Some pay to a named person and are not part of the estate, others are. YOu need to read the wording of the policy i think

And some are written in trust, so that the life assurance payout is flexible and can pay to either the estate or a named beneficiary or whoever the scheme administrators think is an appropriate recipient. That's more common for death in service benefits from workplace pension schemes, but it's also possible with some life assurance policies.

Malthusian

If your father owned the insurance policy and it was not written in trust, the payout would likely form part of his estate.

However if the insurance policy has already paid out to your mother then it was she who probably owned it. Or it was in trust and the trustees have paid it out to her. You should however check this as this is only a guess.

If this is the case you can tell the solicitor that the insurance policy was not part of your dad's estate.

poppystar

greenbee wrote: »

I've just had a proposal from my dad's solicitors' with stating their service and charges for administering his estate.


I'm time poor, as is my brother (who is also an executor) so we are going to have to use a third party to get the estate through probate, but there are cheaper options available. I just need to get the original will and a few other bits of paperwork from my dad's solicitor, but it would be good to know what I'm talking about and have all the paperwork in place for the person I decide to engage to minimise the work involved.

Do take into account that any third party is going to ask you to provide them with all the information to fill in the probate and iht forms. This means that you will still be doing a lot of the work. To be honest once you have the information the forms and process are not too time-consuming unless you meet with unhelpful financial institutions once you have probate. Transferring the house you may want a solicitor to do anyway but have a think about exactly how much time you will be saving.:)

greenbee

Thanks all. Clearly I need to get hold of a copy of the life insurance policy to check it.

And poppystar - I think your right. There's only 4 or 5 pieces of information that we need to get from third parties, and the information in the forms isn't something that anyone can fill in without us.

The solicitor had made a start without us signing anything, or providing details of the service or fees, which I'm pretty sure they're not supposed to. I expect they'll try to charge us for the time they've already spent - whether it's paid will depend on a. whether they have any results and information to hand over and b. the size of the bill!

Savvy_Sue

If it's straightforward then you can certainly do it yourself, it's possible (if she's up to it) your mum can help by finding paperwork relating to the various bank accounts etc.

the fact that you're both time poor needn't matter too much: if your mum can manage financially (for example if there was a joint account it will pass automatically to your mother) then there is very little rush.

greenbee

My dad was very organised, so I know where all the paperwork is. There are 4 investments in his name that will form part of the estate together with his share of the value of the house. All of that, and all his personal possessions go to my mother.

I've sorted out her pension (although we have to claim what they owe for the last month of my dad's life back from them and I think that needs a certified copy of the will rather than probate) and she's got the life insurance payment, so finance are OK.

I'm still very p*ssed off with the solicitors for not sending us a proposal and ts & cs before starting to act. It seems very unethical - they should have told us what the options are and offered to hand over the will and/or suggested we take time to decide what to do.

Both my will and my mother's are held by them, and I intend to get them moved over to the probate registry once I have everything else sorted out.

poppystar

greenbee wrote: »

I'm still very p*ssed off with the solicitors for not sending us a proposal and ts & cs before starting to act. It seems very unethical - they should have told us what the options are and offered to hand over the will and/or suggested we take time to decide what to do.

Both my will and my mother's are held by them, and I intend to get them moved over to the probate registry once I have everything else sorted out.

I assume they haven't put themselves down as joint executors in the will given that they have started acting? Have you got a copy of the will?

The probate registry deals with probate but does not store wills. The solicitor would usually store them for free and then hand the will to the executors when needed at no cost.

greenbee

They're not executors. i have a copy of the will.

You can store you will at the probate registry for a fee of £20.

Given that solicitors have lost paperwork in the past, and the issue of them amalgamating as partners of smaller firms retire, I think I'd rather they were there than with some organisation that may not exist in 10/20/40 years...

poppystar

greenbee wrote: »

You can store you will at the probate registry for a fee of £20.

...

I stand corrected:o …and may well be using the service myself!