View Full Version : Collecting inheritance?

08-21-2015, 03:28 AM
In the story I'm working on, the MC's grandmother dies, and in her will, states that the bakery she owned will belong to my MC. Growing up, the MC spent a lot of time at the bakery and knows how to make food and whatnot, but as for running it like her grandmother did, she's never done before. So if the will dictates that it's hers, would she legally be allowed to run it herself or sell it, if she wanted to? Without a degree in business or particular experience, is it plausible for her to take it over? If so, who exactly is she supposed to talk to, for the legal work and whatnot? By the way, the story takes place in Britain, in case they do it differently than other places, which I've take into consideration.

08-21-2015, 03:58 AM
If it's willed to her, then it would be hers to do with as she pleased. I don't think you'd have to go into detail about the legal technicalities of it. I'd just write the interesting scenes. You can always try to find someone to run it by later who might know if you've said anything that is just not plausible and needs tweaking.

I could see that being a great scene. She picks up the title and the key from the executor or attorney (or they just arrive in the mail), then she walks into the place and has no idea what on earth to do with it. Ooh, maybe there would be spoiled food and a lot of messages from employees.

King Neptune
08-21-2015, 04:01 AM
I assume that the bakery occupies a building that is part of the bequest. I would imagine that there would be licenses of some sort required, but that shouldn't stop her from running it; she'd just have to pay some fees to the local authority. She probably would want to hire a solicitor to ensure that she had legal ownership of the shop, including all real and personal property. The same person or an accountant could tell her what records would be required. Her biggest problem should be whether she can actually produce the goods and sell them to the people who will want them.

08-21-2015, 07:54 AM
So Granny wills the bakery to your character and doesn't tell her anything about running the business? You're going to have to do a lot to make that credible. And unless Granny dropped dead after being hit by a bus, they'll be some planning that goes into this. Plus there's usually an employee who also knows what's going on. Her attorney and her accountant will also have some idea on how to make this transfer go smoothly.

If this is an on-going business, the process can happen without anyone in the public even knowing.

On the other hand, all sorts of disasters can happen and the business can go down the toilet.

What needs to happen for your story?

Best of luck,

Jim Clark-Dawe

08-21-2015, 12:13 PM
In the UK, the terms of a will are handled by an executor. This is someone chosen by the person making the will to see that his/her wishes, as set out in the will, are carried out. It can be a friend or family member, but is usually the solicitor (lawyer) of the person making the will.

When someone dies, before doing anything else, the executor must, by law, apply for a 'grant of representation' (aka a 'grant of probate'.) This gives the executor the legal right to gather and dispose the deceased's money, goods, property etc. the 'estate.'

Next comes the question of taxation. In the UK, if a dead person's estate is valued at more than 325,000, the UK government must be paid tax a rate of 40% on any value over that amount. Say a distant aunt dies and leaves you her house, which is independently valued as being worth 530,000 (not unrealisitic considering UK property prices these days). The UK government would be owed 42,000 in Inheritance Tax ('Death Duties'), This amount is due, whether the property is sold, or not - i.e. if you choose to go and live in auntie's house, you still have to find the 42,000 inheritance tax for the UK government. The government doesn't care how the cash is raised. It just wants it. Inheritance tax must be paid within 6 months of the death of the deceased. It is possible to pay large amounts in installments over a 10 year period.

So, the executors would need to calculate the total value of the grandmother's estate, including any bank accounts, jewellery and other possessions, her house, the bakery (and all its assets - equipment, stock etc.) From this final value they would calculate the amount of Inheritance Tax owed and put into effect any measures necessary to raise that amount from the estate. Usually this means selling stuff, valuable items, property etc.

Next (Sorry it's not over yet) the executor must settle any unpaid debts left by the deceased. This includes, outstanding bills, loans, mortgages etc. Again, money may have to be realised from the estate and stuff sold to do this.

Finally, when all that has been done, the executor is free to distribute the estate, or what's left of it, to the beneficiaries named in the will. Sometimes, of course, the person inheriting a property might find that the executors have had to sell it in order to raise the cash to pay Inheritance Tax and settle any outstanding debts. In that case, they would receive a proportional share of the estate, based on the value of property as a proportion of the whole estate, applied to true value of the estate after tax,debts etc have been paid.

The beneficiary inheriting the property can elect not to have the property sold, but to keep it and pay the Inheritance Tax him/herself. If there's more than one beneficiary, the maths can get complicated as executors try to figure out what proportion of any tax and debts are owed by each beneficiary. The amount would depend on the proportion of the whole estate they inherit.

Your MC and her bakery would require at least a Food Premises Approval and Food Business Registration (licences) She would also have to ensure that her business abides by the Health & Safety legislation. Without any experience, I think it's only really feasible for your MC to take over the bakery if it comes with a skilled baker ( e.g. her dead grandmother's employee who agrees to stay on, or the grandmother's assistant who's able to take over.)

So, your MC would probably find herself owning a business which she doesn't know how to operate and probably owing the UK government quite a lot of money. If granny owned the bakery's premises, it would be worth well in excess of the 325,000 Inheritance Tax threshold. The cheapest bakery would probably be valued at around 500,000 (That's an Inheritance Tax bill of 70,000). A well-established, successful one is currently on the market in the NW of England, fully-equipped and ready to roll, at 1.8 million.

08-21-2015, 02:27 PM
Calder's info is very good, so do take the time to read it in full. Probate in particular can be a painful process, and virtually nothing can be done with the estate until you've got it.

Businesses can be fully or partially exempt from IHT if the appropriate relief is sorted out under the will (https://www.gov.uk/business-relief-inheritance-tax/overview), which would make your character's life easier financially. It really comes down to whether ownership of the business is a plot device to allow the rest of the story to go ahead - in which case yay! no tax problems! - or is the whole plot. In which case, yay! tax problems = plot events!

A few UK/US notes - Granny will have a solicitor, not an attorney, and if it's a small family-run business with no other employees, she may well have done her accounts rather than hiring an accountant. HMRC aren't exactly lenient, but the IRS makes them look like pussycats.

08-21-2015, 02:39 PM
Sorry- duplicated.

08-21-2015, 02:42 PM

08-21-2015, 02:46 PM
To work in the food industry and sell to the public there are various NVQ (National Vocational Qualifications) that you'd be expected to have in food hygiene and the like. I am not up on the details, but that will give you a start for searching. You also want to do searches on "trading standards" - they are part of the local council and do some of the enforcements - weights and measures are part of their purview. As well as that, these days you have to deal with EU regulations. There have been all sorts of joys like saying local dishes and regional products are anti-competitive (or some phrase like that) - I think there was a row about Stilton cheese. There was also a row about "Cornish pasty". The EU regs are general imposed by local authorities, but protested against at the EU Parliament.

One other thing - bakers shops. Historically they have been very hard work and a very tight margin and now supermarkets have instore bakeries many high street bakeries have closed, or massively diversified into mostly doing stuff for lunches - sausage plaits, pasties, sandwiches. We always used to buy our bread from a local shop, pre-order it, rush out a couple of times a week before work to pick up the order (and freeze it), and in two different locations, one being in a busy run of shops in a suburb, the bakers closed. Where we are now used to have a bakers, but it closed before we moved here. It does however support about six places doing lunches and takeways of different sorts (restaurant, pub, chinese, indian, tea shop, working mans club).
If you want a successful bakery, you need to pick a town centre with a big tourist trade and include a lot of nice cakes, big cookies, pasties etc. It might also have an adjacent tea room, or an upstairs tea room (ideally with a view, such as over the cathedral cloisters). So cute market town in Wiltshire, a cathedral city, that kind of thing. If you go for seaside town, then most are very seasonal and a lot of shops close in the winter.

Alternatively, how about a speciality cake shop like Choccywoccydoodah? https://www.choccywoccydoodah.com/

Have fun.

Further thought - the laws in Scotland are not identical to those in England and Wales.
Britain is quite variable in terms of which areas are prosperous.

So in terms of realism, you need to research that as well. :)

08-21-2015, 04:09 PM
Don't get dragged into death technicalities unless the taxation and legislation implications are crucial to your story.

Incidentally, although a very complicated estate of a deceased may require the use of a solicitor, many nominated executors in the UK now choose not to employ a solicitor in the administration of an estate even though the solicitor may have prepared the Will in question.

It's not necessary in the majority of cases and the official uk govt website provides more than enough detailed and very helpful guidance and information to enable an intelligent layman to deal with the investigation, administration, Inheritance tax and probate issues of an estate. Exemption can presently reach 650,000 for a married couple and it will shortly reach 1million where stipulated property is passed to family. If an estate is not subject to inheritance tax the Revenue (HMRC) are essentially not interested and obtaining probate is not complicated. Detailed information and guidance packs can be obtained or downloaded with ease.

And the inheritance tax attributed to a business is not necessarily an unbearable burden- it's payable in installments over seven years - provided the terms of the bequest are not that the business is bequeathed 'free of tax' in which case it depends whether granny's other estate is large enough to bear the tax relative to the business.....

Stick to what your story requires.

Essentially, if nobody is going to question her inheritance of the business - don't open the can of worms unless you know what you are doing.

Good luck

King Neptune
08-21-2015, 05:06 PM
What Bufty wrote. Gloss over the details of the estate and just move the story along.

08-21-2015, 05:12 PM
Another thought on bakery - what would be sold would vary across the country a bit and also what I see on US TV shows in bakeries is not always representative of UK bakeries. Bagels are not nearly as big - I see them in supermarkets but not often in a high street bakers.

There can also be stuff you don't get in supermarkets - lardy cake for one (and it is much, much nicer than the name makes it sound).

Cathy C
08-21-2015, 05:34 PM
Depending on where it's set, the laws will be wildly different. But here's the short version for the U.S. (since probate law is a big part of what I do):

The attorney will determine whether the building where the bakery is located is leased or owned. If it's owned, then the building will become hers by process of Distribution Deed (in most states). Of course, that means any mortgages go along with it, and must be paid off through the estate. Make granny somewhat wealthy to skip any money woes. Less than $5,000,000 and there's no tax on estates. Make her dirt poor (like the bakery is her ONLY asset) to increase the tension on whether she can afford to own the business. Owning a business isn't cheap. A bunch of the money is paid up front--like to suppliers, and you only hope you can get by.

There will be tons of paperwork in changing account names with suppliers and granny's customer base, plus advertisers. Be as brief as possible on paperwork issues, unless you need to add a character who is either a new friend/love or a jerk. It's much easier to start an opening chapter with the character exhausted after going through the papers, instead of doing them on-page.

Good luck!