Inheritance Question

[Pilgrimgirl]

Apologies if I'm posting in the wrong place but how does distribution of inheritance work? My dh, along with his sister, are the sole beneficiaries of their mothers will. Sadly, their mother has just a short time to live and not only are we devastated about this but dh and I are very worried about how his future inheritance will affect us. We are not well off, we just about scrape by running our tiny house and his mother will be leaving her house between him and his sister, but has only a small amount of cash in her bank account. Dh and his sister would put the house up for sale as soon as possible, but it could take a long time to sell and we worry about how we would pay for our share of running the house in the meantime, bills, council tax etc. Does anyone know how this works? Does an estate get distributed as soon as probate is granted? Would he then become part owner and responsible for the house? We are spending time worrying about this when we just want to concentrate on his mother.

Not all banks. I’ve just done probate as executor. Apart from a house there was £42000 in Santander, they paid it to me as it was under £50000. I used it to pay funeral costs, bills, etc.
Council tax was suspended for 6 months while house was empty.
Banks will release funds to pay for funeral costs.
I put it on the market as soon as I started the probate procedure.

Yes, you have to I sure it as an empty house

Went through this recently and council tax was only payable 6 months after probate was granted (if property not sold).

Empty building insurance was extortionate as parent’s exsisting policy didn’t cover empty houses so had to be cancelled. Another family member died who had house insurance from a company that covered empty houses and it only cost a small amount to add that cover to existing policy - worth looking at if helping an elderly family member with purchasing insurance.

Id be really surprised if a solicitor acting as executor let you complete the probate form. At the very least they’d charge for checking anything they are putting name to.

Your husband and sister will own the house once probate has been granted

No, the house belongs to the estate, it gets sold, title transferred to the new owners, proceeds split between beneficiaries.

At no point does the title transfer to the executors or the beneficiaries (unless they decide not to sell it).

And you can speak to utility companies and ask them to keep the bills to be paid when the house sells. The may hassle you a bit (Eon were terrible, and I was paying the bills!) but you don't owe the money, the estate does.

Both water companies just stopped billing. TV license just cancelled the licence (they were the easiest to deal with, surprisingly). I did set up new insurance, it was cheap, about a third of the previous, at c£250 for the year.

And council tax stopped for 6m after probate, it took me 5m to apply for probate (I had to deal with quite a few accounts and pay £18k of IHT, though there is a form you use and the bank pays this directly) but once I'd applied it was under two weeks and the free CT clock started ticking then. They sent me a few forms to fill in.

Over a year now and house still not sold, which is tedious!

In my experience no. They don't need to have it transferred into their name, it can be sold from the estate so (eg) the heirs don't lose their First Time Buyer status

I’ve just done probate myself which is easy with a simple estate. Done online saved the estate £2k and it was granted in 10 days and more shockingly on a Sunday. The estate pays the costs - utilities are used to this scenario. The estate pays out all the costs then the remainder is distributed to the beneficiaries.

I've just done probate and it took over a year. There was IHT due, which I think made it "complicated" - looks like others have had a far better experience than me in terms of timings. You can put the house on the market at any point. Be clear that sale is subject to probate so buyers don't feel messed around.

Applying for probate is a fairly straightforward process if you’re in the right headspace which sadly isn’t often the case after a bereavement.

If a solicitor does it for you, you still have to provide them with all the info/figures so I decided to give it a try myself for my FIL. Had a couple of queries but it wasn’t difficult and there is a great helpline.

One solicitor quoted up to 15% of the entire estate 😳😳

I used saga to insure my DM’s empty property. A condition of the insurance was I needed to check the house once per week, which I was doing anyway as she died in the winter.
no council tax to pay during the administration period and for the six months following grant of probate. This can be extended providing the house is completely empty.

Ime it depends on the bank as to whether they will release money with death certificate only.

This sounds like a very simple estate to administer. Consider asking her to remove the solicitor as executor as this will save you £££££s.
she should be able to do this by adding a clause to the original will as long as she is still alive but take legal advice .
You can use a solicitor for some bits but it means your dh can do the quicker easier bits.

Yes agree with @Time40 . Houses can go on the market whilst private is going through , and I know that 100% because I've done it .
At this time of year I'd caution turning off utilities as pipes could burst if heating is left off ( obviously you could drain down the system ) but it could become damp .
Plus surely you want the electricity turned on for viewing purposes , who wants to view a property in dim light during winter !

I did probate myself, I put my DF’s house on the market, I got an offer and we exchanged and completed as soon as probate came through. Probate took four week, it isn’t always slow.

My probate was only slow because I assumed that as the estate was under 325 plus going to a son I didn’t have to do all the forms
For some reason I still had to fill in up teen forms so it took about 16 weeks in the summer.
house sold same day as went on the market but they were happy to wait.
Like someone else said if you go with a solicitor you still have to gather all the info for them and that’s what took the most time! I was quoted£12000!

I’m a 68 year old with not so much tech know how as you so it won’t be tricky. I got one of my son in laws just to double check the forms for me

Most utilities etc were brilliant and made it easy
a couple were not
” can I speak to the account holder?”
letter addressed to Mr ….. deceased etc
Horrid when you’re dealing with bereavement as well

With my dad's they sent the forms back because we had left out a blank sheet of paper. We didn't have the exact one any longer, we couldn't work out how to print off just one sheet (of blank paper) from the portal without printing all the pages again, so we just put in any old A4 sheet of blank paper and that was accepted.

Slightly bonkers.

No it doesn't cost that much. I should know, I've done it three times, one of them quite recently.

The reason I was suggesting it was because it would make it easier for the OP's family, and mean that they wouldn't have to pay up front for things they can't afford until the house is sold.

Thanks to everyone for answering my queries, I'm reading all your replies and taking in all the information, much appreciated.

Dont have the solicitor as an Executor. You can always buy their expertise if required. They are also likely to keep the money and slow things down massively.

Make sure you put the house on at a priced to sell. Otherwise it will just stick there

I would ask the solicitor to disclaim doing the estate as no point in paying them - the other executor can do it with your partner's help if needs be. Solicitors are often happy not to do it and defer to family members. Obviously consider pros and cons of that before deciding. it can also be much faster to do it yourselves. I did my father's estate and we did everything very urgently right away which really helped. A solicitor with loads of other cases will not be in the same mind set.

Secondly the most important question is value of the house as you need to find out if inheritance tax is due as some of that can be due before a house is sold which is very unfair of the Government although you can pay IHT over 10 years. I think if the mother is single and it is a house left to children then £500k is inheritance free. if the house is worth less than that then forget about inheritance tax (ie the state taking 40% of it all - greedy state......) It can be £325,000 free of inheritance in some cases with the tax on over that sum.

Thirdly as there is a will and the 2 children inherit half each it should be fairly standard application for probate. I would recommend buying quite few death certificates. I bought 10 when my father died as we had to send the original out to loads of people at once - banks and all sorts so having the extra ones was useful.

In the immediate after math having access to estate cash to pay bills even just funeral bills can be important. Sometimes the dying person has a joint account with say £3k in it to pay immediate bills from or cash available. Be very careful particularly the child who is the executor to keep complete records of everything spent and paid out eg HMRC may say there is tax to pay etc etc etc . Getting an estate agent ready to sell the home on the death can be useful too however I do appreciate the mother is not yet deceased so everyone needs to be quite sensitive to the feelings of others about this.

Finally ask her if there is anything she wants people to have eg when my mother died after the dead in bottom of a cupboard we found some funeral instructions far too late. However we had already given her the Catholic burial and full mass she wanted so I think we pretty much gave her what she wanted and for my father we already knew there was one space on the family burial plot his grandfather bought in 1908 so that was all pre arranged.

@Xenia Thank you so much for taking the time to give such a detailed and informative reply. I didn't realise that you could ask the solicitor not to act as Executor.

You can. My father's solicitor was happy to let us children do it. However I think there may be cases where the heirs might be at odds with each other and the solicitor may be the neutral third party to do it. I just liked being 100% in control of it all, responding to all correspondence on the day it came etc (and siblings let me handle it on their behalf too and we were not in dispute with each other).

I think I have read about some cases though where solicitors want to keep the work as they want the fees so it may not be as simple as they always agree to let the family do it (I AM a solicitor but do nothing like probate law at all)

One thing to note, you have to pay any inheritance tax due BEFORE you can apply for probate. The rules have changed this year.

I would encourage you to build up a spreadsheet of all the assets with account numbers now. Consolidation is sensible but best in mind that financial organisations will often let you had funds up to £20-£30k BEFORE probate is granted if you sign indemnities. So don’t bung all moneys into one account if it will mean it’s worth more than this. It is helpful to get these small amounts early on.

With my mum’s utilities, we will just have a reckoning of what’s due when we sell the house and pay then. We did have a credit balance on Octopus.

For us, council tax will be due six months after probate. Nothing payable till then.

IHT and probate took us from 16 August until 25 September. So not bad.