Find out how we can help with Probate and Estate Administration.
What is Probate?
‘Probate’ is the common name for the process of dealing with a deceased person’s affairs. That responsibility might fall on you if you are their next of kin or are named in the will as being their Executor. The ‘Probate’ process includes applying for a Court Order, known as a Grant of Representation (commonly referred to as a ‘Grant of Probate’) which recognises your authority to deal with a deceased person’s affairs. This Court Order allows you access to their data and finances so you can pay off the deceased’s debts from their own resources, cash in assets and distribute wealth to anyone who is supposed to inherit.
What areas of probate law do we cover?
The team at Mullis & Peake LLP Solicitors can offer you a wealth of collective experience and deliver high quality work in all matters relating to Wills and estate administration, offering particular emphasis on inheritance tax planning.
Disputes over someone’s Will and their Estate can be unpleasant and distressing as they often involve close family relationships. It may be possible to contest a Will if there are concerns that the Will is invalid; if a solicitor or Will writer has given negligent advice leading to mistakes in the Will; or if there is concerns about undue influence.
‘Probate’ is the common name given to the Court Order which recognises the authority of the person nominated to look after the deceased person’s affairs. There are time limits for contesting a Will after a Probate has been issued.
Contentious probate is where there is a challenge to the Probate process. It can include: funeral disputes; challenging the Executor of Will or challenging who should inherit and how much they should receive, perhaps because there is a mistake in the Will, the Will is invalid or the inheritance rules are unfair.
Promises Or Gifts Before Death
It sometimes happens that a person makes a significant gift prior to their death. A beneficiary who receives less, or nothing, after death as a result may be able to challenge the gift .
Concerns about the legitimacy of significant lifetime gifts arise on similar grounds to inheritance disputes focusing on a Will, for example because unfair pressure was placed on the person making the gift or they did not have the appropriate level of capacity at the time to make an informed decision.
Trusts and Probate Enquiry
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Death Without A Will
If a person dies without leaving a valid Will, then their assets will be divided in accordance with a pre-determined set of rules, known as the intestacy rules. This means that their estate may not pass how their loved one might expect. For example, a long-term cohabitee may not inherit at all under the intestacy rules. Alternatively, there may be such a large class of family members who are due to inherit that the sums received may end up being very small. Our expert team recently dealt with a case where there were 72 beneficiaries, some of whom received less than £300.
Trusts can be quite technical and complex in nature, but essentially a Trust is a separate legal entity which can hold money or property. Property or assets can then transferred to the Trust which will become the owner. The person who sets up the Trust can dictate their own set of rules which determine how the money or property can be used and who is intended to benefit from it.
A trustee is a person who takes responsibility for managing money or assets that have been set aside in a trust for the benefit of someone else. You can read about trustee responsibilities here.
Inheritance Tax (IHT) is a tax on the estate of someone who has died, including all property, possessions and money. The standard Inheritance Tax rate is 40%. It is important to get good legal advice when writing your Wills which can help minimising inheritance tax. Always speak to a qualified lawyer.
Lasting powers of attorney
A Lasting Power of Attorney (LPA) is a document that allows you to appoint one or more people (known as attorneys) to help you make decisions, or make decisions on your behalf. Here’s why you should have one and what the different types are.
Frequently asked questions
‘Probate’ is the common name used for the Court Order which recognises the authority of the person who is responsible for dealing with another’s property, money and possessions (their 'estate') when they die.
On average, the whole probate process can take in the region of 12 months.
If you are the person responsible for dealing with another person’s estate, you will likely be unable to sell property, or cash in valuable assets without first obtaining ‘probate’.
You can apply for probate yourself. Most applications need to be made online but some more unusual circumstances require a paper application by post. It can often be reassuring to get expert advice from probate specialists, especially if you are unfamiliar with preparing inheritance tax returns or if the estate is classed as complicated and needs to be made via post. You should particularly consider legal advice if the terms of the Will are unclear or you think there might be a challenge.
- A copy of the deceased death certificate.
- The original last Will (if applicable)
- Either an online or paper Probate application form
- Many estates have to file inheritance tax returns
- Often you have to send supporting evidence to HM Revenue & Customs when sending the tax return. This might include property or business valuations
Financial institutions set their own internal limit for when they will release funds or assets without Probate. Some insist on Probate for anything over £2,000, others up to £50,000. It is best to contact each one and ask its requirements. You will also need probate if the estate becomes liable to pay inheritance tax.
There are different ways solicitors might charge for assisting with Probate. Some charge based on the time spent doing work, some charge a percentage of the value of the estate and some charge a combination of both.
Paying a percentage of the estate value can often be more expensive, particularly if there is a property. Generally speaking, paying strictly on the basis of the time spent doing the work is the more cost effective option for the estate.
Mullis & Peake only charges for the actual work down and does not take a share of the estate. The fees usually start at £2,000 plus VAT at 20% and expenses.
Dealing with the administration of an estate can be very stressful and time consuming, especially if you work or have caring responsibilities. At such a difficult time, you may prefer to pass on that burden. We can deal with every aspect of the estate administration, both legal and practical, including:
- Confirming the existence and validity of a Will
- Corresponding with all asset and liability holders in the estate
- Arranging valuations of all assets
- Arranging house insurance where necessary
- Calculating inheritance tax liability and preparing relevant tax returns
- Applying applicable reliefs to reduce your inheritance tax liability and arranging payment of any tax liabilities
- Preparing the probate application
- Closing all accounts and collecting in assets
- Placing statutory notices to help protect against claims from creditors
- Finalising income tax and capital gains tax where appropriate
- Drafting estate accounts
- Confirming the identity of and distributing to beneficiaries
- Conducting bankruptcy searches
If the estate is one which attracts no tax liability, our charges are typically £5,000-£6,000 plus VAT charged at 20% and expenses.
Where an estate attracts any tax liability, our charges start at £7,000 plus VAT charged at 20% and expenses and are typically in the region of 1-1.5% of the gross value of the estate plus VAT charged at 20% and expenses.
Common expenses include:
- Probate application fee £273
- Additional copies of the Grant - £1.50 each
- Statutory notices £250 (approx.)
Examples of circumstances that would not be typical and therefore might increase our fees are given below. This list is not intended to be exhaustive.
- Where there is no Will (known as an 'intestacy')
- Business or agricultural property
- Operating or selling a business
- Private company shares
- Assets abroad or of a specialist nature e.g. fine art
- A homemade or damaged Will
- Property issues such as unregistered title
- Deeds of variation or disclaimer or renunciation
- A large portfolio of certificated shareholdings
- Submitting a corrective account to HMRC detailing adjustments to originally submitted asset and liability details
A non-exhaustive list of examples of circumstances that would have a significant effect on our fee are as follows:
- Operating a business as an ongoing concern
- Complex intestacies where beneficiary tracing is required
- Registering the death, arranging the funeral, clearing the property and thereafter inspecting it for buildings insurance compliance
It would be rare for our fees to exceed 2.5% of the gross estate plus VAT charged at 20% and additional payments. The exact costs will depend on the circumstances of the matter. For example, an estate with a high value property, one bank account and one beneficiary may be cheaper to administer than a lower value estate with no property but multiple certificated shareholdings and several beneficiaries.
Please note that the following are not included within our full service, although it might be possible to quote for such work separately:
- Changing the ownership or title of any properties – for example a sale or transfer (this firm’s conveyancing team will be pleased to provide a separate quotation for this work);
- Capital Gains or Income Tax returns – it may be necessary for an accountant to be instructed to deal with finalisation of the Income Tax and Capital Gains Tax position to the deceased’s death. We shall be able to liaise with the accountant to provide information required;
- Supplying beneficiaries with tax deduction certificates for their personal Income Tax returns;
- Registration of death and arranging funeral – whilst we may be able to deal with these matters in some circumstances, there will be an additional charge;
- Attending at or collecting papers or items from the deceased’s property or another premises
- Storing or arranging for the sale/distribution of personal possessions
- Advice on setting up and administering any trusts contained in the Will or created by the intestacy rules
- Drafting any documents to vary a Will or intestacy retrospectively (deed of variation)
- Dealing with foreign assets
- Dealing with any IHT valuation challenge
- Engagement in litigation or threatened litigation including caveats
- Locating missing beneficiaries
Our case handlers charge between £200 - £350 per hour plus VAT charged at 20% and expenses. A typical administration involves around 30 to 40 hours’ work. The time taken to complete the work largely depends on third parties and is out of our control. A lot of time is spent waiting on organisations such as HMRC, the Courts, banks or for properties to sell.
Generally it takes in the region of 2-3 months to obtain valuation figures from third parties for all assets and liabilities. It can then take 3 to 4 months to obtain the Grant of Probate, assuming the Probate Registry can process the application within 8 weeks. Thereafter, it may take a further 4 to 6 months to encash the assets and draft the estate accounts. This assumes that all third parties release funds within 4 weeks of being requested to do so and that any property is formally transferred or sold within 8 weeks of the Grant of Probate being issued.
Our basic service is designed for those who are happy to undertake the practical elements of an estate administration themselves, but require assistance with the more technical elements.
This may suit you if you are a close family member and there are a limited number of beneficiaries who are all known to you.
For the basic service, our involvement will be limited to the following matters:
- Preparing the inheritance tax return and applying for applicable reliefs where appropriate
- Preparing the probate application
- Arranging payment of inheritance tax
You would be responsible for providing all of the information we might need to apply for a Grant (this might include obtaining valuations and dealing with properties) and then dealing with the day-to-day administration of the estate, for example collecting in and distributing the estate or filing any post-death tax returns.
Because the work is limited, we are generally able to offer a fixed fee quote for the Basic Service. For simple estates which only require a short-form tax return (using an IHT 205 form), our fees would be £1,800 plus VAT charged at 20% and any expenses we need to incur on your behalf.
For more involved estates which require a full tax return (using an IHT 400 form), our fees would be £3,000 plus VAT charged at 20% and any expenses we need to incur on your behalf.
In terms of the expenses we anticipate incurring, this usually involves the following.
- Probate application fee - £273
- Additional copies of the Grant - £1.50 each
If you wish to engage us to undertake additional duties, the charges for such work would be made on a time recorded basis, which is currently between £200-£330 per hour plus VAT charged at 20% and expenses.
Once you have supplied all required information to us, where a short-form tax return (IHT 205) has been filed we aim to apply for the Grant within 2 weeks. Where a full return (IHT 400) is needed, the timescales is usually extended by a further 2 weeks.
A grant of probate will not be needed where the deceased owned assets in joint names as the joint party already has authority to deal with the asset.
Sometimes, probate can also be avoided if the person who died only owned a small amount of money and didn’t have a property to sell or transfer.
Only certain people can apply for probate. If the deceased made a Will, the person named in the Will as Executor can apply. If there is no Will, the law sets out a default set of rules, known as the intestacy rules, of people who can apply in priority order. It usually starts with the closest blood relative. These rules would also apply if all Executors named in a will have pre-deceased or are unable to act (for example due to mental incapacity).
An executor is the person who's responsible for looking after the financial affairs of the deceased. In terms of how many executives you can appoint, you can appoint as many as you wish. However, it's important to bear in mind that only four executors can apply for the grant of probate to be taken out in their names.
Yes, you can appoint a professional executor, however, do bear in mind they usually charge a fee for carrying out that role and that fee would be paid out of the funds in the estate.
There are things that you can do to reduce or possibly even completely eliminate the amount of inheritance tax that you pay. The best thing to do is to get expert advice during your lifetime. Now, an estate planner can help you plan your affairs and your money in a tax efficient way to make sure that when eventually the time comes and you pass on, your loved ones pay as little or hopefully no tax whatsoever. Now, if you haven't done the tax planning in your lifetime it can still be possible to manage your affairs and apply certain reliefs after you have passed away to again help reduce or eliminate the tax completely. But again, we would say because it is a complex area if the best thing to do is always seek expert advice from someone who knows all about inheritance tax.
Whether you have a Probate claim, i.e. whether you can apply for the grant and also inherit from the estate, is dependent on your relationship to the deceased. If the deceased has not left a valid Will, a Will, of course, outlines who the executives of this state are and who benefits from the estate, then the rules of intestacy will apply. This may mean that certain people may benefit from the estate that the deceased did not want to. This is why having a Will drafted to reflect your wishes is so important. Where there is an intestate estate, the order of entitlement determines who is entitled to apply for the grant of letters of administration and also who will inherit from the estate.
There is no time limit for probate to be claimed, but you do need to be aware that there are time limits for claiming certain tax reliefs. So if you were looking to reduce your tax liability, there might be some time limits for that and also if you needed to change how the wealth is distributed and shared about, there are time limits for doing that as well.
The rules of intensity would apply in this scenario, as the deceased has died intestate, which means with no valid Will. The intestacy rules only apply to property that the deceased was able to dispose of by their Will if they had held a valid Will. It does not extend to property held as joint tenants or under interest under a trust. It is important to seek legal advice on who would inherit the estate, as particularly in this scenario, it is dependent on numerous factors, including, but not limited to, the estate value and the date of death.
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Wills and Probate Team
Manzurul is a Member and heads our Wills and Probate team.
Martyn is our Chairman and the firms' Compliance Officer for Legal Practice