What a person dies, all property and assets to which they own, including property held jointly, will form part of their estate for distribution. This can form a daunting task of locating and valuing assets. Depending on the type of property or asset, the rules for distribution can differ.
Generally speaking, all assets not accounted for in the Will left behind after tax liabilities and debts are settled are included in the estate for distribution, unless the Will is contested. Exceptions exist where a living trust has been established.
Debts, liabilities and expenses
The debts, liabilities and expenses that must be accounted for prior to distribution include loans, credit card bills and mortgages. Reasonable funeral expenses can also be deducted from the estate.
Any property owned outright by the deceased will form part of the estate, unless directed towards a specific named beneficiary.
Joint tenancies and tenancies in common
Where the deceased owned property as part of a joint tenancy, ownership will pass by default to the surviving joint owner. Where the interest is a tenancy in common, involving two or more persons, the deceased’s Will determines to whom the share is passed. If no Will exists, the rules of intestacy determine where the share vests.
Bank accounts held jointly will pass to the surviving joint owner, regardless of what the Will says or the default rules on intestacy.
Life insurance policies
Life insurance policies with a named beneficiary will not form part of the estate.
Property that is placed in a living trust for beneficiaries is shielded from being included in the estate. Instead, it will vest in the named beneficiaries in the trust deed. Living trusts can be revocable or irrevocable in nature. If a testator or testatrix anticipates transferring assets from the living trust into their estate, or vice versa, it is preferable to use a revocable trust.
Contact our Wills and Probate Solicitors London
Our solicitors have extensive experience in handling matters relating to trusts, HMRC and tax implications, Power of Attorney and business advice. Our client base is not only domestic, but international, meaning we are well placed to advise on situations where a deceased either had assets overseas or their primary domicile was not in the UK.