In this article we will explain:
A more detailed explanation of the above information now follows.
Probate is a legal process 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.
Here is a short video explaining what probate is.
If the person who died had left a will the executor or administrator of the estate can apply for a Grant of Probate.
This is a legal document that the they can use to confirm to banks and other organisations that they have the authority to manage the estate (property, money and belongings) of the person who has died.
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 steps you should take.
You apply for probate after the property, possessions, money, investments, and other assets have been identified and valued and any debts paid. The probate fee is due on application to the Probate Registry.
Probate fees are paid to the government in order to get approval for the distribution of a deceased person’s property, money and possessions.
On top of the application fees above, the cost of administering an estate can vary widely depending on who does it. If the estate is small and uncomplicated you can keep the cost of probate low by applying for it yourself. However, if it is not simple then we strongly advise that you use a specialist who can ensure everything is dealt with correctly.
If you decide to use a probate service you will find that the fees vary.
The average probate cost is usually calculated as between 1% to 5% of the value of the estate, plus VAT. Some solicitors charge both an hourly rate and a percentage. Therefore, if your estate is valued at £500,000 then the costs will range between £5,000 to £25,000 plus VAT.
Banks tend to be more expensive than using probate solicitors or specialists. Generally banks charge a higher rate of around 4 % to 5% of an estates value. The average solicitors fees and costs for probate tend to be lower than this.
Settling an estate can be a long and complicated process which some may find stressful. Many people therefore hire a probate specialist to work on their behalf.
Probate fees vary widely so it is difficult to say what average probate costs are.
It can be cheaper to use a probate solicitor. They can charge anything from £100 per hour to £300 per hour.
Solicitors 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 fees much 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.
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 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.
For more advice or information please contact:
When deciding whether to use a probate solicitor or not, bear in mind that:
Here is a short video explaining more about inheritance tax.
There are some probate solicitors that charge a fixed fee for their services. It is advisable to get quotes from a few fixed fee probate solicitors so that you can compare their prices.
Here is an example of charges from a fixed fee probate solicitor:
|Grant of Probate/Grant of Letters of Administration only
|£849 + VAT|
|Dealing with the entire estate (obtaining Grant, collecting in assets and distributing to beneficiaries)|
|If the estate is under £325,000 and no Inheritance Tax is payable:|
||£1500 + VAT|
||£2100 + VAT|
||£300 + VAT|
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.
If you leave your details at the bottom of this page, we can arrange for a probate specialist to help you through the process.
We’ve discussed this issue with many solicitors so we will only put you in touch with a probate firm that we have confidence in to do a good job at a fair cost.
How long will the process take?
It can take up to a year or even longer if you are dealing with a complicated estate. 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:
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.
Susan can be contacted on 01727 735 636.