Receiving your inheritance
Delays can lead to serious problems

Recent research found that although a third of people expect to receive their inheritance within three months, it can usually take anything from six months to three years for probate to be granted, according to Brewin Dolphin, the investment management company.

The research also found that nearly 2m Britons who have inherited assets encountered complications that delayed the receipt of bequests. Delays running into years are not uncommon, even if a Will is not challenged by another potential beneficiary.

For some people a delayed inheritance can lead to serious problems. Brewin Dolphin’s research found that more than 40 per cent of Britons planned to use their inheritance to help fund their retirement, while more than a quarter of those approaching retirement age have their inheritance money earmarked to pay off debts.

Winding up an estate can be a complex process. Before you can apply for grant of probate, which will allow cash and other assets to be distributed to relatives, an inheritance tax (IHT) return must be filed and before this can happen the deceased’s assets must be valued.

The executor of the Will, who may be a family member or a professional, should prepare the return, but they will be reliant on third parties, such as banks and insurance companies, to provide them with the information required.

The family home, and any other property, will also need to be valued. Once a return has been submitted, the IHT bill must be paid, although payments in respect of property can be made in instalments. Only then can the executor apply for a grant of probate and even once this is granted, there may still be a further delay in distributing assets to beneficiaries.

Legacies which are fixed sums or particular assets given in a Will can be distributed as soon as probate has been granted, the residue cannot be handed over until the executor receives clearance from HM Revenue & Customs. This will be given only when the executor has ensured that the deceased’s income and capital gains tax liabilities have been cleared.

Delays during probate are often the result of poor estate planning. Delays can often arise when no Will has been written or when it is out of date. A surprisingly high number of Britons, around 70 per cent die intestate.

But it is not just the failure to draft a Will that causes problems. Other complications could arise, particularly when there are foreign assets involved. Many Britons who own properties abroad could be affected by this issue. The EU has been consulting on how to harmonise succession law. Not only are there different laws in different member states, but there are entirely different concepts.

One notable difference is that in Britain we have "freedom of testamentary." This means you can leave your money to whomever you like, with a few caveats. While there are no simple rules on how to deal with foreign assets, preparation is critical. Unravelling the different laws in order to wind up estates with foreign assets should be thought through in advance.

Although in Britain you are largely free to leave your assets to whomever you choose, there are some restrictions. Under the terms of a 1975 Act of Parliament, a Will can be contested if you fail to make reasonable provision for spouses and dependent children.

With prior preparation there are a number of things you can do during your lifetime to ensure that you ‘die tidily.’ The most important thing to do is to take professional advice and write a Will. Keeping paperwork in order, making sure your tax affairs are up to date and keeping records of any gifts you might have given are also very important, note that gifts given within seven years of death form part of your estate for IHT purposes.

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