Probate is a legal process that is required where someone applies for the right to deal with the affairs of a person who has died.
‘Probate’ is used to describe both the Grant of Probate and the process involved in obtaining it.
The cost of probate is split between the fixed costs, which is the application fee, and the variable costs, which are the costs of the specialist you use, whether that be a solicitor, probate professional or a bank. Fixed fees range from £155 and variable fees range from about 2% to 5% of the value of the estate. For an estate worth £100,000, the variable costs will range from £2,000 to £5,000 plus VAT.
Here is an infographic that helps break down, in an easy way, the steps involved in the probate process.
Here is a short video explaining what probate is. However, please note that the video references the new costs whose introduction has been delayed by the government. We explain what these are later down this page.
We have broken down the costs involved with probate and the different type of professionals that can help you.
Whenever you apply for probate there is an application fee that is payable.
The cost of administering an estate can vary widely depending on who does it, whether that be a solicitor, probate specialists or a bank. The costs for these range between 2.5 to 5% of the value of the estate. More detailed information on each of these options can be found below.
Whether you use probate solicitors or professionals, they typically charge either an hourly rate, fixed fee or can charge a fee that is a percentage of the value of the estate.
However, if the estate is small and uncomplicated you can keep the costs of probate low by applying for it yourself.
As you can see the cost of probate can be quite ranging. The fixed costs are predictable but the variable costs can be quite expensive, especially if you are paying 5% of the value of the estate. For an estate worth £500,000 the costs would be £25,000 plus VAT plus the fixed costs.
Typically you will seek the support of either a probate solicitor, probate specialist or the bank of the deceased when you are about to start the probate process. People will often type ‘probate solicitors near me’ but typically you will find that national probate service providers, such as those by the Co-op, can put you in touch with a local probate solicitor or specialist.
We have set out details of the typical costs you will face.
Probate fees vary widely so it is difficult to say what average probate costs are.
It can be cheaper to use a probate solicitor when compared to a bank, however, a probate specialist is likely to be even cheaper. They can charge anything from £100 per hour to £300 per hour.
Solicitor probate fees are usually based on guidance from the Law Society which sets an initial fee of 0.75% of the value of the property, plus 1.5% of the value of other assets, and other charges on top of that.
Bear in mind that more complex cases involving more hours of work or those with unexpected complications can make the probate charges much higher. A contentious probate (click here to read more about what this is) can make these costs even higher.
It is advisable to contact a few companies for quotes to get an idea of average probate costs. It is also important to find a solicitor who is approachable and sympathetic, and whose advice you understand.
Many firms will ask you to complete a detailed fact-finding questionnaire before they start the work so that they can give you an idea of the likely costs.
However, it is often not possible to know immediately what may be involved and how much advice and help is needed. It is possible to keep costs down by doing some of the work yourself. Also, ask to keep correspondence down to only that which is essential as the charges for sending letters quickly add up.
Keep in mind that the cost of probate is usually paid from the estate so you won’t have to worry about getting into financial difficulties.
As you can see from above, there are 3 types of organisations that can support you with probate. They all do exactly the same thing but the costs vary significantly.
If we take the example of someone with an estate of £300,000, without including disbursements, as they would all charge similar for this, this is how the costs would break down.
As you can see the difference in cost between using a bank and a probate specialist is extraordinary. A probate specialist is more than half of the price of a bank and still significantly cheaper than a solicitor. The key thing to remember here is that all three provide the same type of service.
In our experience, using probate specialists or solicitors will often also mean you get a more personal service.
There are some fixed fee probate solicitors that charge a set amount for their services. It is advisable to get quotes from a few fixed fee probate solicitors so that you can compare their prices.
If the estate is worth over £325,000 and Inheritance Tax is payable then the solicitor would ask for more information in order to determine the value and complexity of the estate. They would then quote a fixed fee based on the information given.
However, fixed fee quotes are always subject to change if information is given wrongly or new complexities arise.
You can visit the law society website to identify solicitors that may be able to help you.
If the person who died did not leave a will, a close relative of the deceased can apply to the probate registry for a ‘Grant of Letters of Administration’ to manage the estate.
This is also referred to as ‘probate’ because, for all practical purposes, the two types of grant are identical.
A Grant of Probate is usually needed when the person who died leaves one or more of the following:
A Grant is not needed if the person who died held all their assets jointly with another person as everything would automatically pass down to the surviving joint owner. However, some financial organisations may require a grant before giving you access to even a small amount of money.
If you are looking at what to do with probate following the death of a loved one, we’s recommend that you read our ‘Dealing with Bereavement’ guide, which sets out the all the steps you should take.
A more detailed explanation of the above information now follows.
It can take up to a year or even longer if you are dealing with a complicated estate (click here to read our article that sets out the expected probate timeline). There may be many different organisations who are involved in the process, such as banks, building societies, insurance companies and HM Revenue and Customs.
You have to wait until all claims have been received before you can start dealing with the estate. Anyone wishing to make a claim against the estate has 6 months from the date when probate was first granted.
Arguments between family members, beneficiaries or personal representatives can also cause delays. Any disputes must be sorted out before the affairs of the person who died can be settled.
There are also other things that may affect the time taken, such as:
The cost of probate is usually paid from the estate.
When someone passes away, it is not automatic that you need to go through a probate process.
Estates that have a low value or are made up of assets that were jointly owned. Probate is not required usually required in the following circumstances:
A property that has been held through joint ownership will not require probate. This is because the property will pass to the surviving owner under the laws of survivorship.
One area that causes confusion is the difference between tenants in common and joint tenants. In some cases you will require a grant of probate in order for the deceased’s share to be transferred to the beneficiaries.
If there was a bank or building society account that was held in joint names that you will not need probate. However, you will still have a responsibility to inform them of the death so that they can update their records and turn the account in to a single account in the name of the person that is still living.
If the deceased was in receipt of a pension you should inform the pension scheme or pension provider straight away. They will then arrange for any pension payments to cease and to inform you if there are any surviving spouses pension payable.
If the life insurance policy had been set up so that any payment was made to a named beneficiary then probate will not be required.
However, if the policy had no named beneficiary then the payment will be made to the estate. Whether probate is subsequently required will depend on the value of the policy payout.
If the deceased had foreign assets then you will need to check with the country where the assets are held to determine what their equivalent probate process is. It is always advisable to seek the advice of a local specialist to that country as they will be able to deal with the whole process for you.
If the deceased was a director or owner of a business then you should take advice from a professional when it comes to administering their business affairs.
You may find that the personal assets of the deceased do not require probate but their business assets might, for this reason. You can contact one of the phone numbers on this page for some help if you feel this situation applies to you.
If the deceased was a beneficiary of a trust you will need to take care when looking at how their assets are to be treated.
Unfortunately, when it comes to trusts it is not always a simple case of closing it down and distributing it.
The surviving spouse is not automatically exempt from the probate process, as it will depend on what the assets are and the ownership structure of these assets.
If the assets were in solely in the name of the deceased person then you might find that probate is required even if everything is being left to the spouse. However, if the assets were in joint names, then depending on how the ownership is structured, it may be possible to transfer the assets to the surviving sole person without the need of going through the probate process.
Put simply, if your loved one has already passed away, then subject to the exemptions above, it is not possible to avoid probate if the estate is above the probate threshold.
However, if the person has not yet passed away then it is possible to plan and try and avoid the probate process. This is called Estate Planning (click here to read our article on how you can do this).
With the huge increase in internet use and the wealth of information that can be found on it, more and more people are being tempted to deal with the administration of an estate themselves. This blog sets the factors you should consider.
Probate, the process of dealing with someone’s estate (property, possessions, cash, savings) when they pass away, can be applied for without seeing a lawyer, but it’s not without risks.
Official statistics indicate that the number of claims against executors for breach of fiduciary duty (in other words “getting it wrong”) has more than tripled in recent years. There is speculation that this increase is linked to the rise in DIY probate.
There are various factors to consider before deciding whether or not to handle the process yourself. These factors can include:
Acting as an executor does not come without responsibilities. An executor is responsible for dealing with large sums of money, discharging debts and liabilities, some of which you might not know about and preserving the estate for the beneficiaries.
If it has been prepared by a lawyer then it may include legal language which is based on law developed other hundreds of years.
What you think the Will says may be different to what it actually says. Many professionally drafted Wills contain trusts; to save inheritance tax, to avoid those who inherit paying care fees and to reduce the likelihood of potential disputes.
These types of trust can be complicated to administer and to understand all of the tax implications when deciding how to deal with them.
An executor is often personally liable for compensating a beneficiary who has suffered a loss.
This may be due to the Will being misunderstood, a decision that has been made having a negative tax impact or assets in the estate losing value due to delay. These are a few of the many things that can go wrong when dealing with an estate.
Beneficiaries can look to amend their entitlement under a deceased’s Will after the death, under the current inheritance tax rules. This might not always be known or obvious to the lay executor or beneficiaries.
There can potentially be negative inheritance tax consequences which can be addressed by such a variation and spotting this in time is crucial.
In many cases an inheritance tax return will be required and the executors will need to account to HM Revenue & Customs for this. These accounts can be complicated even in what might appear to be the simplest estates.
The penalties for an incorrect return can also be severe. When was the last time you volunteered to complete a tax return?
Dealing with a person’s estate can be a time consuming business. An experienced lawyer will know the process well and can get on with the administration of an estate efficiently.
A lawyer is also independent and allows an executor to keep beneficiaries at ‘arms length’ and can assist an executor in managing beneficiaries’ demands and any conflicts that may arise.
Inheritance tax should not be the only tax you consider when administering a person’s estate.
At various stages of the administration there may also be capital gains tax and income tax matters to take into account. In particular, there are often significant Capital Gains Tax savings to be made before selling a person’s home.
An experienced lawyer should identify these and help the executor and beneficiaries take advantage of these tax planning opportunities.
Finally, by using a reputable lawyer, an executor and the beneficiaries are afforded additional protection. A lawyer should retain any monies on behalf of the estate in a client account.
Solicitors are required to hold professional indemnity insurance are regulated by the Solicitors Regulation Authority.
As elderly client specialists, we are also able to add value for example by identifying cases where the money is owed to the estate for care funding which should have been met by the NHS and we can assist in making a claim on behalf of the family.
In all but the most straightforward cases, it is important to seek timely specialist advice to save money and worry.
Executors carry a certain amount of personal liability in their role and they can open themselves up to substantial legal claims if they are unaware of the law and their obligations.
When deciding whether to use a probate solicitor or not, bear in mind that:
Part of this content around the pitfalls of doing probate yourself was first published by Susan Glenholme, the Managing Partner for Debenhams Ottoway.
As well as being managing partner and head of the private wealth team, Susan is recognised by Chambers and Partners UK legal directory, features in the legal 500, as one of the leading private client lawyers in the UK.