George Hay Chartered Accountants were one of the first accountancy firms in the country to obtain a licence to carry out non-contentious probate work. In our monthly column, we give you an insight into the process and provide an update on what is happening in the world of probate and estates.
We have had two cases in the office, last month, which have highlighted the importance of having a valid Will in place.
Sadly, two of our clients have passed away. Both were sole directors of their company and also sole shareholders. Both companies were small, but there were employees involved.
The moment the directors died, the companies had nobody authorised to carry out transactions and the company’s bankers froze the company’s bank accounts.
Client A had made a Will and had appointed Executors. An Executor obtains their authority from the Will and has immediate power to act.
Irrespective of what the Will says and what will ultimately happen to the shares, they immediately vest to the Executors to administer. Companies House, therefore, treat Executors as holding the shares and so the Executors have the power to immediately appoint a replacement director.
In this case, it is unlikely that the company will continue as a going concern without the, now deceased, director. However, the Executors were able to ensure an orderly wind down of the business, selling some assets, and are negotiating a goodwill sale, thereby maximising the value for the beneficiaries.
Unfortunately, Client B had not made a Will. Therefore, one of the beneficiaries under intestacy has to take out “letters of administration”. Strictly an administrator’s power comes from the Grant of Probate, once issued, and it is difficult for them to deal with the Estate prior to this appointment.
There is also the difficulty as to who could take up the appointment as all equal class of beneficiaries e.g., “all the children” have the potential to do so.
The result in this case is that the bank remains frozen, the employees have left and the company’s value, other than its cash at bank, has been lost.
Whilst the examples above apply to companies, the principle is the same for all Estates; it is much easier to administer if there is a Will.
To discuss your requirements with one of our discreet, expert probate practitioners, contact Huntingdon-based Barry Jefferd on 01480 426500, or you can email us at firstname.lastname@example.org where your enquiry will be dealt with by one of the team.
Authored by Director of GH Probate Ltd., Barry Jefferd.
Our Probate service is provided through GH Probate Limited. GH Probate is the trading style of GH Probate Limited. Registered in England and Wales number 9630102. Registered Office: St George’s House, George Street, Huntingdon, Cambridgeshire PE29 3GH.
Authorised to carry out the reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England & Wales.