Inheritance tax: Covid Wills & care home issues force families into the courts - get ready

Inheritance Tax (IHT) can be managed through Wills, which ensure assets are passed on to intended beneficiaries and no more tax is paid than necessary. Will creation is usually encouraged by estate planners as it can mitigate issues which would otherwise be very challenging to handle during the bereavement process. Usually, IHT is levied on the estate of someone who has died and is passing on their assets, so long as their estate is valued over £325,000.

Where IHT is charged, it is paid at 40 percent on the parts of the estate valued over the £325,000 threshold. Having a Will in place can ensure there is no confusion in how an estate is managed following someone’s death and without one, in some rare cases, an estate can end up in the hands of the Crown.

As coronavirus emerged, it forced many people to evaluate their estate affairs, especially as older people were more at risk of the virus. Unfortunately, while the pandemic prompted effective planning, it also led to difficulty in managing certain stringent rules.

Debra Burton, a Partner at Lime Solicitors, explained: “So called ‘Covid Wills’ have led to an increase in Will challenges. We are seeing more will validity challenges based on the will not being properly witnessed.

“The rules on how to make a Will are complicated for lay people to understand, particularly around witnessing. Lockdown made the problem worse as it could prove very difficult to find one witness, never mind two. There is also still a lot of myths around Wills, particularly online e.g. Wills can be signed electronically (they can’t – it still needs a wet signature) or only one witness is now needed.

“Disgruntled beneficiaries are now focussing more on how the Will was witnessed and testing the evidence of the witnesses where previously they may not have bothered if it looked fine on its face. Challenging a will based on lack of proper witnessing can be an easier claim to bring (therefore cheaper) than a claim based on lack of testamentary capacity, for example. There is no need for expert evidence or judicial discretion if the witness evidence is clear. Either the Will was witnessed properly – so it’s valid or it wasn’t – so it fails. It’s very black and white.”

READ MORE: Woman, 60, faces losing home due to Universal Credit cut

© GETTY Inheritance tax

Ms Burton went on to break down how this is creating difficulties within families and how going to the courts may prove futile.

“Allegations of undue influence are also on the rise,” she said.

“Traditionally the courts have been very reluctant to overturn a Will based on undue influence unless there is very clear and convincing evidence to support the allegation – which is almost never available. However, lockdown gave an unprecedented opportunity for vulnerable people to be forced into making a Will that they didn’t really want.

“Testators were literally locked away with certain family members and kept apart from others. Lawyers await the first undue influence Covid cases to make their way through the court system to see if the court is prepared to now accept that such controlling and coercive behaviour does go on.

“Will challenges can also lead to problems with Inheritance Tax. If a Will is successfully challenged due to a witnessing mistake, then it may unravel the testator’s careful estate planning which was designed to save Inheritance Tax. Alternatively, a Will executed in suspicious circumstances or even one just made in haste as a result of the pandemic could end up overruling an earlier tax efficient Will or having unintended tax consequences. This could result in a double whammy to the estate – large legal costs and an unexpected Inheritance Tax bill.”


DWP update: Major change announced to Universal Credit and PIP [INSIGHT]


Pensioners to pay 12% National Insurance! New levy threat [WARNING]


Inheritance tax: Ministry of Justice forced to address probate issues [EXPERT]

To illustrate how difficult these circumstances could be for families, Lime Solicitors shared a case it recently worked on which concerned care home issues. The company said: “The deceased made a will in April 2021 shortly before his death in June 2021.

“He was living in a care home at the time. The deceased was not married nor had any children and had been estranged from his extended family for a number of years.

“The deceased had said over a number of years to his friends that he didn’t want his extended family to inherit anything. However, the deceased hadn’t made an earlier Will so the family would inherit under the intestacy rules.

“The Will was a pre-printed Will pack (the type that can be bought from a local stationary shop) and was brought to the care home by two of the deceased’s friends.

“The friends had waited until the Covid restrictions had been lifted in the care home so they could both act as witnesses to the Will. Unfortunately, the order of the witnessing was incorrect which meant that the Will was invalid.”

© EXPRESS Coronavirus

The need for effective IHT and estate planning was laid bare recently by new research from Fidelity International. The investment and retirement planning company surveyed a nationally representative sample of 2,000 UK adults.

The results found two-fifths (41 percent) of people are working longer, spending less, or are even downsizing so they can afford to give their loved ones an inheritance. Fidelity’s findings showed many people are “gifting away” their golden years by putting a variety of financial restrictions in place so that they can afford an inheritance. This follows its research revealing that more than two-fifths (43 percent) of the UK population expect to receive an inheritance one day – rising to almost two-thirds (65 percent) of younger adults.

Worryingly, nearly half (47 percent) of those hoping to pass on wealth said they have not made any financial plans about how to achieve this, with only one in five (20 percent) researching how much they will need for retirement income or later life care. Instead, many are making sacrifices which could have a negative impact on their quality of life.

Dawn Mealing, the Head of Advice Policy and Development at Fidelity International, commented: “The expectation from nearly half of the population to one day receive an inheritance is overshadowing what most people see as their ‘golden years’, putting an undue amount of pressure on retirees when they should be enjoying the fruits of their labour. Our research has shown that two-fifths of people are making sacrifices to their own lives and retirements in order to afford an inheritance, but almost half have not considered how financial planning could help them cover these costs without having to make these sacrifices.”

Ms Mealing concluded: “Out of the 58 percent of the UK population planning on giving an inheritance one day, almost two-thirds (61 percent) have not created a Will, while only one in ten (10 percent) have discussed their plans with a financial adviser. When asked why, 68 percent said they had just not gotten around to it, while 16 percent said they did not know where to start.

“While delaying estate planning is understandable, most people don’t realise that it could actually have a detrimental effect on their financial wellbeing now and in the future.

“Firstly, it means that you may be putting unnecessary financial restrictions in place that are having a negative effect on your ability to spend now, and secondly if you pass away before making any plans, your inheritance may not be handled the way you intended.

“By speaking to a financial adviser, not only can you make sure your inheritance if gifted the way you want, but you can also discuss how you can enjoy your later years without having to scrimp and scrape for an inheritance. Retirement is an important period in your life, and by speaking to an adviser you can plan for the retirement you deserve while feeling assured your loved ones will be looked after in the future.”

Internet Explorer Channel Network
News Related


US and EU ambassadors: Enforce U.N. sanctions on North Korea

1 / 2Koreas TensionsThis photo provided by the North Korean government shows a ballistic missile launched from a submarine Tuesday, Oct. 19, 2021, in North Korea. North Korea announced Wednesday, ... Read more »

Asian stocks mixed after Wall Street rises for 5th day

APTOPIX Japan Financial Markets (Copyright 2021 The Associated Press. All rights reserved) Asian stocks rose Wednesday after Wall Street advanced for a fifth day on strong corporate earnings. Shanghai Tokyo ... Read more »

Board rules racism a public health crisis in New York City

New York City Board of Health declared, “To build a healthier New York City, we must confront racism as a public health crisis.” The New York City Board of Health ... Read more »

Pulau Mampat-Seberang Batu Hampar road in Rembau collapses after 3-hour heavy downpour

© Provided by New Straits Times REMBAU: Part of Jalan Pulau Mampat-Seberang Batu Hampar has collapsed following three hours of continuous heavy rain and an overflowing river. This has caused ... Read more »

FBI finds unidentified human remains and items belonging to Brian Laundrie at Florida park

ORLANDO, Fla. — Authorities on Wednesday said they found partial, unidentified human remains along with a backpack and notebook belonging to Brian Laundrie at a Florida park near where his ... Read more »

City-County Health Department splits; what's next?

City-County Health Department splits; what’s next? Read more »

Grants Pass man arrested for alleged 'catfishing' proposition, threats

Oct. 20—A man faces felony charges accusing him of offering money online to a woman for sex acts in Grants Pass, then when the woman refused, posing as a member ... Read more »

The Love Trap viewers slam new dating show over list of issues but ‘love seeing contestants fall through the floor'

CHANNEL 4 viewers took to social media to complain after new dating show The Love Trap failed to meet their standards. Fans were left disappointed by the programme, which aired ... Read more »

Bengal: Civic polls likely from December, TMC starts preparations

© Provided by The Indian Express Following the conclusion of the four Assembly by-polls in the state, whose results will be declared on November 2, the West Bengal State Election ... Read more »

Plans announced for post-Brexit festival of creativity

TV historian David Olusoga has teamed up with the makers of Pokémon Go to create an immersive 3D experience in south London. © BBC DavidOlusoga0910.jpg It will be part of ... Read more »

Best luxury Christmas advent calendars including Hotel Chocolat, Barbie and Lego named in Which? test

HOTEL Chocolat, Master of Malt and Playmobil are the best luxury Christmas advent calendars this year, according to a test by Which? Christmas is more than two months away but ... Read more »

Alan Carr to host Royal Variety 2021 with Rod Stewart and Ed Sheeran on line-up

Alan Carr has been announced as the host of this year’s Royal Variety Performance. The 45-year-old comic said it was a “dream come true” to be entrusted to compere the ... Read more »

Wealthy buyers snap up luxury villas in the Caribbean and Mexico

This five-bedroom villa at the tropical Baker’s Bay Golf and Ocean Club in the Bahamas is asking $32.2 million. Baker’s Bay Last year, the pandemic proved to resort developers that ... Read more »

On The Money — Democrats eye tough choices as deadline looms

Happy Wednesday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: © Greg Nash The U.S. Capitol ... Read more »

Victorian coin found under mast of Nelson's flagship to go on display

Conservation workers have discovered a 127-year-old farthing which had been placed under the mast of Nelson’s flagship, HMS Victory for good luck. © PA Wire HMS Victory The Victorian-era coin ... Read more »

Report warns of climate change's 'code red' impact on health

A new report published Wednesday warns of the severe impact of climate change on human health, and says the prognosis is only getting worse. © Nathan Howard/AP Paramedics Cody Miller, ... Read more »

Watch Justine Skye's Quick and Easy Nighttime Skin Care Routine

© Provided by Harper’s Bazaar The singer walks us through her skin care ritual for acne prevention and toning. Justine Skye’s nighttime skin care routine is so simple, it takes ... Read more »

Colts WR T.Y. Hilton questionable to play vs. 49ers

Indianapolis Colts veteran wide receiver T.Y. Hilton has run into some brutal misfortune since the closing weeks of summer.  © Marc Lebryk-USA TODAY Sports T.Y. Hilton was held out of ... Read more »

Are Failed Voting-Rights Pushes Backfiring for Democrats?

Senate Democrats forced Senate Republicans on Wednesday to filibuster the Freedom to Vote Act, which is sort of the light version of the comprehensive For the People Act that Senate ... Read more »

Cozy Earth's Very Cozy Sheet Sets & Pajamas Are 25% Off Right Now

When it comes to bedding, the ideal is the ever-elusive, all-seasons set. Think lightweight sheets that are cozy but still breathable for hot summer nights and quilts that keep you ... Read more »

Nurul Dini out of World Championships

© Provided by New Straits Times KUALA LUMPUR: A wrist injury has sidelined Puteri Nurul Dini Mohd Fauzi from next month’s World Championships in Dubai. The Malaysian Tenpin Bowling Congress ... Read more »

Betrayals, Bravo and broads behind bars: How the Real Housewives came crashing down to earth

Last supper for the ‘Housewives’?: Kyle Richards, Andy Cohen, Lisa Rinna, Erika Jayne, Dorit Kemsley, Sutton Stracke and Kathy Hilton (Jonathan Leibson/Cindy Ord/Rich Polk/Greg Doherty/Rich Fury/Getty/Bravo/Wikimedia/iStock) Erika Jayne and Kyle ... Read more »

Hollington Drive viewers spot HUGE blunder as car flips over in horror smash in series finale

HOLLINGTON Drive viewers found fault with the ITV drama once again tonight as the four-part series came to an end. People were left scratching their heads during the final episode ... Read more »

Knicks-Celtics rivalry is now on equal footing

Even now, all these years — all these decades — later, Clyde Frazier smiles at the memory. When the Boston Celtics walked onto the court at Boston Garden on the ... Read more »

Banged-up Giants offensive line needs lift from Matt Peart

There have been 406 snaps on offense for the Giants this season and Will Hernandez has taken every one of them. An investigation is ongoing. What special powers does Hernandez ... Read more »

Second-hand cars are selling for more than they cost from the showroom

© Provided by Daily Mail MailOnline logo Cars up to a year old are selling for more than they cost new, a report showed yesterday.  The average price of second-hand ... Read more »

CL round-up: Bayern strike late to thrash Benfica

Bayern Munich hit Benfica with four late goals to seal an emphatic win in © Getty Leroy Sane scored twice in Byaern Munich’s 4-0 win at Benfica © Getty Juventus ... Read more »

Ilhan Omar Says Senate Democrats Obstructing Effort to Eliminate Filibuster ‘Are Killing our Democracy'

Progressive representative Ilhan Omar has claimed that moderate Democratic senators, namely Joe Manchin and Kyrsten Sinema, obstructing the effort to kill the filibuster are “killing our democracy.” © Elizabeth Frantz/Reuters ... Read more »

Irish midfielder Taylor's long-range cracker lights up Championship clash

© Alamy Stock Photo PETERBOROUGH ENDED a run of six consecutive away defeats with a 2-1 victory at fellow Sky Bet Championship strugglers Hull. Darren Ferguson’s men were second best ... Read more »

Biden hits out at 55 companies that paid nothing in federal income taxes

© AFP via Getty Images US-POLITICS-BIDEN President Joe Biden has revived his demand for changes to the nation’s tax code that have allowed corporations to pay little to nothing in ... Read more »

Tesla cautions factory openings won't be simple, posts record earnings

By Hyunjoo Jin and Subrat Patnaik © Reuters/Stephen Lam FILE PHOTO: Tesla’s primary vehicle factory reopens in Fremont (Reuters) – Tesla Inc said on Wednesday its upcoming factories and supply-chain ... Read more »

MEDAC pertimbang selaras tempoh tamat moratorium

© Provided by Sinar Harian PUTRAJAYA – Kementerian Pembangunan Usahawan dan Koperasi (MEDAC) sedang mempertimbangkan untuk menyelaras tempoh tamat moratorium bagi semua agensi pembiaya di bawah kementerian itu. Menterinya, Tan ... Read more »

WHO warns pandemic will drag on into 2022

© Getty Images A shipment of Covid vaccines from Covax lands in Sudan earlier in October The Covid pandemic will “go on for a year longer than it needs to” ... Read more »

Man in NYC robbery that led to officer's death pleads guilty

© Provided by Associated Press FILE – This image taken from surveillance video provided by the New York Police Department, shows a man identified by police as Christopher Ransom, robbing ... Read more »

Indicted Nebraska GOP Rep. Fortenberry pleads not guilty

© Provided by Associated Press FILE – In this Nov. 2, 2018, file photo, Rep. Jeff Fortenberry, R-Neb., speaks during a campaign rally tour stop in Omaha, Neb. A federal ... Read more »

A soldier's story: Fighting on a totally different frontline

© Provided by Free Malaysia Today Mohammad Naim Abdul Razak says he was forced to choose between serving the nation as a frontliner or being with his family. PETALING JAYA: ... Read more »

Ex-ÖSV-Boss Peter Schröcksnadel (80) stärkt Seilbahnen den Rücken: «Der Schweizer Weg ist ein guter Entscheid»

In der Schweiz brauchts vorerst kein Zertifikat auf der Piste. Das kommt bei der österreichischen Ski-Legende Peter Schröcksnadel gut an. © Bereitgestellt von Blick «Der Schweizer Weg ist ein guter ... Read more »

Florida COVID update: 2,571 cases added, hospital patients on the decline

Florida reported 2,571 COVID-19 cases and no new deaths on Tuesday, according to Wednesday’s report to the Centers for Disease Control and Prevention, based on Miami Herald calculations of CDC ... Read more »

Gwyneth Paltrow tackles bedroom taboos in Netflix series

This image released by Netflix shows Michaela Boehm, left, and Gwyneth Paltrow in a scene from the Netflix series “Sex, Love, and Goop,” premiering Thursday. (Netflix via AP) NEW YORK ... Read more »

No need for Plan B yet, as UK COVID cases and hospitalisations rise

1 / 5No need for Plan B yet, as UK COVID cases and hospitalisations riseShoppers walk past a mural denoting appreciation for the UK National Health Service, amidst the spread ... Read more »