24 July 2007
24 July 2007
- Almost two thirds (63%) of those anticipating an inheritance underestimate probate duration
- One-in-five inheritors experienced complications delaying receipt of assets
New research published today by Brewin Dolphin reveals that six million people (63%)1 expect to receive an inheritance within six months of the death of the person bequeathing them assets, and more than a third (38%) expect probate to take just three months. However, in reality probate typically takes anything from six months to three years to process2.
Brewin Dolphin’s third annual National Inheritance Survey, has uncovered a ‘probate gap’, where people anticipating an inheritance may face financial difficulties as a result of spending it before they have actually received any assets. Moreover, almost one-in-five (17% or 1.9 million) Britons who have inherited assets encountered complications that delayed the receipt of bequests.
The portfolio manager and financial adviser is urging people to ensure that their will is up-to-date to minimise unnecessary stress for descendants and warns those anticipating an inheritance against spending it until probate is complete.
Charlotte Black, Director of Corporate Affairs, Brewin Dolphin said, “Many people wrongly assume that the Estate will be settled shortly after death when in reality probate can take months, or even years, to resolve. Delays often arise when no will has been written or when it is out of date. Another complication is the growing number of Britons with foreign assets such as property. Given these problems, pre-spending an inheritance should be avoided.”
Henrietta Mason, Solicitor in the Contentious Trust and Succession Team at Withers LLP stated, “Estate planning is critical to avoid unnecessary complexities arising after death. Lack of planning can not only lead to an increased tax burden, but also to disputes with beneficiaries or family members which might otherwise have been avoided. This in turn can lead to additional delay, and further cost, both financial and emotional.”
“Particular care should be taken in relation to foreign assets. Cultural differences between countries are reflected in conflicting legal traditions, and unravelling the different laws in order to wind up estates with foreign assets can be expensive if not thought through in advance.”
According to Brewin Dolphin, 43%3 of Britons are planning to use their inheritance to fund retirement and over a quarter (27%) of those approaching retirement age (55-64 years) say that they will be using their inheritance to pay off debts. Meanwhile, almost a third (31%) are expecting to use their inheritance to fund a deposit for their children’s first home and a fifth (21%) are planning to use it to pay school and college fees.
Ms Black continued: “Writing a will and keeping it up to date should be a financial planning priority for everyone, particularly those with dependants. And with house prices continuing to creep upwards, more Estates than ever are liable to 40% inheritance tax. There are plenty of ways to mitigate IHT, such as establishing trusts and transferring assets within a family so it’s disappointing that six in ten Britons who intend to leave money have not conducted any form of inheritance tax planning.”
For example, for a married couple with an estate valued at £500,000, setting up a nil rate band discretionary trust would mitigate the full the liability to £80,000 inheritance tax; the sum payable on an estate of this size, if no IHT planning had been considered.
– Ends –
For further information:
Charlotte Black, Director or Corporate Affairs
Brewin Dolphin Securities
020 7248 4400 or Charlotte.Black@brewin.co.uk
Patrick Evans / Alistair Kellie / Ewan Robertson
Citigate Dewe Rogerson
020 7638 9571
Henrietta Mason, Solicitor in the Contentious Trust and Succession Team
Withers LLP
020 7597 6308 or henrietta.mason@withersworldwide.com
Notes to editors
1 999 adults were interviewed by research company GfK NOP by telephone. Fieldwork was conducted between 22nd and 24th June 2007.
2 The Law Society
3 TNS was commissioned to conduct research via OnlineBus between 3 and 5 March 2006 with a representative sample of 1027 GB adults aged 16+
About Brewin Dolphin Securities
Brewin Dolphin Securities Limited (“BDS”) is the principal operating company of Brewin Dolphin Holdings PLC which is listed on the London Stock Exchange. BDS is authorised and regulated by the Financial Services Authority and is a member of the London Stock Exchange.
BDS is the largest independent private client portfolio manager in the UK. The Group manages £21 billion of funds on behalf of more than 100,000 clients, and of this £10 billion is on a discretionary basis. BDS has 37 offices and is corporate adviser to 140 small and medium sized quoted companies. Brewin Dolphin Investment Banking was voted AIM Broker of the Year 2007.
The Group provides complete investment management for private investors, charities and pension funds and trades as:
Please see Media Centre section on www.brewin.co.uk for details and photos of all commentators and analysts throughout the BDS Group.
About Withers
Withers LLP is the world’s first international law firm dedicated to the business, personal and philanthropic interests of successful people, their businesses, their families and their advisers.
The firm has over 100 partners and 600 people, with unparalleled expertise in commercial and tax law, trusts, estate planning, litigation, charities, employment, family law and other legal issues facing high net worth individuals, their families and their businesses.
The firm is called Withers LLP in the UK and internationally, except for the United States where it is called Withers Bergman. It has offices in London, New York, Milan, Geneva, Greenwich (Connecticut) and New Haven (Connecticut).
The firm’s client base includes more than 15% of Britain’s wealthiest citizens (based on the Sunday Times Rich List), at least 10% of the 50 wealthiest families based in Europe with US connections and a significant number of the Forbes 400 list of Richest Americans.
The firm has a turnover of more than $150 million.