Lost wills & Inheritance Tax

AP3

This is a follow up to my thread here, for background:

https://forums.moneysavingexpert.com/discussion/6683877/cant-find-original-signed-will-have-a-copy-and-a-newer-unsigned-will

It has now been more than 6 months since my aunt died, and we still haven't found a valid will. Inheritance tax hasn't been paid (I had to ask the solicitor about this), as under the "copy" will, the vast majority of the estate would have gone to charity, and have been exempt.

I'm not sure what position we now find ourselves in.

If the original will isn't found, and the estate goes to my sister and me, IHT would be due, but hasn't been paid on time, so is probably attracting interest as of this month. What is our best option in this situation, assuming the will isn't found?

• Complete a DoV to give it all to charity, and avoid IHT entirely?
• Complete a DoV and give enough to charity to avoid IHT.
• Inherit the lot, and accept a larger IHT bill? (At this point I'm a bit peeved at my late aunt for this situation, although a lot of the delay was me thinking that my sister had everything in hand. My mistake)

If the will is found, what would happen to the accrued interest on IHT that would never have been due?

Thanks in advance. My brain is a bit frazzled!

Keep_pedalling

I would make a DoV that gives the charity the amount your aunt wanted them to have.

Dead_keen

It has now been more than 6 months since my aunt died, and we still haven't found a valid will.

Your choice but I think you have to work on the basis that no will be found and that IHT will be due (unless DoVs happen).

If the will is found, what would happen to the accrued interest on IHT that would never have been due?

It will be refunded. The same if a DoV is done.

If you are an income taxpayer and you want to give to charity then you could see whether gift aid (either in a single year, with carry back to the previous tax year, or future tax years) means that the charity gets more.

poseidon1

OP, in your last thread I provided you with information that indicated that failure to find a legally executed Will raises the legal presumption the original will was revoked and that in your current circumstances lead to the estate being subject to intestacy.

However this presumption of revocation is a finding that needs to be made by the probate courts and under those proceedings it is open to the parties who maybe adversely affected (ie the charity named in the original will ) to try and rebut the presumption.

Three weeks ago you were unaware this process exsisted, so what if any legal advice have you or your sister obtained in pursuing that process?

The point is it is not for you or your sister to unilaterally declare the estate intestate without involvement of the probate court let alone unilaterally decide whether you will honor the unsigned will or not. The intestacy has not yet been legally ascertained, so you can forget about DOV at this point - you don't know what ( if anything) you are varying.

If your current solicitor is unfamiliar with the process to obtain a formal intestacy ruling, perhaps you should be seeking alternative legal advice, since keeping the original named charity beneficiary in the dark is not an option.

As for IHT any ultimate liability ( and interest thereon) will wholly depend on the actions you and your sister take subsequent to an intestacy finding.

At the moment you have no basis for obtaining either Letters of Administration or grant of representation, so no basis to make submissions to HMRC on any potential IHT exposure resulting from your eventual decision on the distribution of the estate.

AP3

https://forums.moneysavingexpert.com/discussion/comment/82169468#Comment_82169468

This is all going through a solicitor. They are doing a final physical search for the original, signed, will, and then I guess it will go to probate court as you mention. They've already done the Certainty search, and it only mentioned their firms as having had it. The solicitor hasn't mentioned probate court specifically, but seems perfectly qualified and specialised in probate.

I'm more concerned about the IHT at this point. My sister and myself are named as executors, and hence I believe it is our responsibility to pay it.

So where do we actually stand? We don't know if IHT will be payable or not, depending on the outcome.

If we do nothing regarding IHT, I presume that interest will (continue to) accumulate. What happens if that interest consumes more than is actually available within the estate? Are me and my sister on the hook for it if the estate does get declared intestate?

Do we renounce executorship to avoid this? I just don't want a huge bill which we can't pay without the funds from the estate!

Keep_pedalling

You will only be e executors if the original is found you have no obligations to administer the estate if it is intestate.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82169583#Comment_82169583

If there is no will there is no executorship to renounce, solicitor should have explained.

As for the intestacy, until you have an official finding that the estate is intestate, only then are you and your sister first in line to obtain letters of administration ( assuming you wish to do so). Until then that matter is limbo.

As pointed out by @Keep_pedalling neither you or your sister are obliged to administer the estate , and even if you do there is no IHT liability if you eventually choose to vary all or most of the estate in favour of the charity.

If you both choose to keep your respective shares of the estate (ie cut the charity out entirely) , only then will IHT be chargeable but the charge is on the estate not you personally. In that regard you are not personally out of pocket. Interest on late payment will then of course be accruing, but that will be your choice.

If the solicitor is on the case, explaining what they are doing and matters are progressing , I struggle to understand your current anxiety and indeed confusion.

AP3

https://forums.moneysavingexpert.com/discussion/comment/82169675#Comment_82169675

Thanks to both for explaining, it's set my mind at ease. I guess I'll leave it with the solicitor to do their work and see where we end up.