The Coole Bevis Solicitors Probate Department is well established and highly regarded throughout Sussex, with a reputation built on years of providing an excellent service to our clients. We have been recognised for our outstanding contribution to ‘heir hunting’ and in February 2019, we earned best Probate Department in the South East at The UK Probate Research Awards ceremony.
We have extensive experience in dealing with a wide variety of issues arising out of the administration of an estate following the loss of a loved one, and are experienced in negotiating inheritance tax issues with Government H M Revenue & Customs, liaising with financial specialists, accountants and other professionals to ensure the administration is dealt with in a professional and prompt manner.
What is Meant by Executors and Administrators
Where there is a Will, that Will should have named an executor.
Where there is no Will, rules determine who is entitled to apply to the Probate Court. If the appointment of an executor in the Will fails for any reason, there are rules to determine who may apply to the Probate Court to administer the estate. In both these situations, the person appointed is known as an administrator.
What is Probate?
An official document issued by the Probate Court is often required to confirm someone’s legal authority to deal with the estate.
When there is a Will this is known as a Grant of Probate. Otherwise, the document issued will be a Grant of Letters of Administration.
Typically, the phrase “probate” is used to cover both situations, and to describe generally the process of administering an estate. However, obtaining the Grant in the estate is only the first stage in what can be a lengthy and complex process, with traps for the unwary for which they may be held personally liable.
Who Can Apply for Probate
The only people who are entitled to deal with an estate are a validly appointed executor or administrator entitled under the Intestacy Rules. It is possible to make an application either with or without legal assistance.
However, you should be aware that there are many traps for the unwary. The executor/administrator is entitled to seek legal assistance, and any fees are recoverable from the estate. If you do decide you wish to deal with an estate yourself, you should not underestimate the amount of time that is likely to be required to deal with it properly.
Problems may not become apparent until you have made a start on dealing with the estate, and having made a start, you may find that the law prevents you from giving up your role.
Are you certain you have the last Will, or that there is no Will, and what searches should you carry out to check?
Are you sure you understand the Inheritance Tax rules? Most people have heard of the seven-year gift rules, but do you know what enquiries HMRC expect you to have made, or how HMRC expect you to value assets. If you claim an exemption to which you are not entitled, or fail to disclose (even accidentally) something you should have disclosed, you may face penalties from HMRC. Alternatively, if you do not claim an exemption to which the estate is entitled, or mistakenly allocate the burden of inheritance tax, you may face a claim from the beneficiaries.
It may appear that inheritance tax is not an issue, but sometimes the deceased will have had a life interest and this has inheritance tax consequences. A life interest may not be immediately apparent such as when someone has the right to live in a property.
If Inheritance Tax is due, you will need to pay the first instalment and obtain a receipt from HMRC before your application can proceed.
Best Probate Law Firm 2019
Recognising the best support provided to probate researchers by a law firm. The awards celebrate the achievements and skills of forensic genealogists.
We won the UK (South) category for Best Probate Law Firm 2019
After Probate or Letters of Administration Have Been Granted
This is when the really work starts.
The personal representative (PR) is responsible for safeguarding/collecting in all assets and paying any debts. This information should be incorporated into Estate Accounts as the beneficiaries are entitled to know how their share of the estate has been calculated.
The PR must finalise the income tax position of the deceased person, and deal with any taxes arising during the administration of the estate. This includes finalising the inheritance tax position, including submitting a corrective account if necessary.
An estate is also subject to capital gains tax and income tax and the PR will need to provide details of any income received during the administration to the beneficiaries so that they can include the information on their personal tax returns as necessary.
If there is a property to sell, the PR must ensure that it remains insured appropriately and that utilities are maintained.
The deceased may have been in receipt of a means tested benefit in which case the PR is likely to hear from the DWP who may enter a claim against the estate if they believe money has been overpaid during the deceased’s lifetime.
The PR must know how the law applies if any of the beneficiaries have died before the deceased, or if beneficiaries appear to be missing. They need to know what to do if any of the beneficiaries are bankrupt, or if there is insufficient money to pay all the debts and legacies.
How Long Does It Take?
Every estate is different, but if the matter is non-taxable and not complex it should be possible to complete the administration within 6-12 months. In more complex or contentious cases it may take significantly longer.
An insolvent estate exists when the debts are greater than the assets of the estate. In this situation it is particularly important to seek legal advice as there are rules which determine which debts are paid first, and how creditors must be dealt with.
Foreign Residence and Foreign Assets
If there is any foreign element to an estate, including where there is any possibility that the deceased person may be considered to have been domiciled outside the UK, it is important to seek legal advice. There may be a conflict between English law and the law of the country where the assets are located, and there may be additional tax considerations.
PROBATE AND ADMINISTRATION COSTS
Complete Probate Administration Service, including applying for the Grant, collecting and distributing the assets
Probate describes the administration of an estate when the deceased left a valid Will.
The exact cost of administration will depend on the individual circumstances and complexity of the matter. For example if there is one beneficiary, no property and only one or two bank accounts, the costs will be at the lower end of the range whereas if there is a property, multiple bank accounts and investments the costs will be at the higher end of the range.
You should always bear in mind that if there is any dispute during the administration period, costs will escalate and there is a risk the estate will be frozen until the dispute is resolved.
Some estates will be liable to inheritance tax, any inheritance tax payable is in addition to all professional fees and disbursements incurred during the administration of the estate. Until the value of the estate has been ascertained the exact amount of inheritance tax due cannot be calculated but you may wish to look at http://www.hmrc.gov.uk/tools/inheritancetax/interest-rate-calculator.htm for additional information.
During the administration it is possible capital gains tax could be incurred on the disposal of assets, until a disposal is agreed, the amount of capital gains tax due cannot be calculated but you may wish to look at https://www.gov.uk/tax-sell-shares/work-out-your-gain and https://www.gov.uk/tax-sell-property/work-out-your-gain for further information.
We will handle the full administration process for you, this cost example is for an estate where:
- There is a valid Will
- There is no more than one property
- There are no more than 3 bank or building society accounts
- There are no other assets
- There are only funeral expenses and usual household liabilities outstanding at date of death
- There is no inheritance tax payable and a short form inheritance tax account can be completed
- There are no more than 1 – 4 beneficiaries
- There are no disputes with creditors or beneficiaries
- No claims are made against the estate
Disbursements are costs related to your matter that are not payable to third parties, such as court fees. We handle the payment of the disbursements on your behalf to ensure a smoother process.
- Probate Court Fee £155.00 plus 50p for each office copy of the Grant required
- Bankruptcy search fees £2.00 per beneficiary per distribution
- S27 Notices in London Gazette £72.80 plus VAT, variable
- S27 Notice in local Newspaper (price variable)
- Accountancy fees if Accountant instructed to deal with deceased’s income tax affairs
There may be additional disbursements if additional services are required, full details will be provided during the administration, if appropriate.
How Long Will This Take?
Every estate is different but estates which fall within this range are dealt with within 6 – 9 months. Typically obtaining the grant of probate takes 4 – 12 weeks. Collecting assets then follows, which can take between 4 – 6 weeks following which liabilities will be discharged and the finally the estate can be distributed.
Cost: 20 – 30 hours – cost range for an Executive Partner @ £235.00 plus VAT ph £4,700 – £7,050 plus VAT
For an Assistant Solicitor £185.00 plus VAT ph £3,700 – £5,550 plus VAT
If the deceased does not leave a Will, the estate will be administered as an Intestacy, additional costs and disbursements will be incurred because it will be necessary to research the family the tree in order to ascertain who the legal beneficiaries of the estate are. Detailed cost information will be provided on receipt of specific estate information and background to enable us to prepare an estimate of charges.
If the estate is subject to inheritance tax and a full inheritance tax account must be filed, we would estimate that obtaining all the information required to prepare that account will usually take between 3 – 6 months to obtain. We usually estimate between 10 – 20 hours work, depending on number and complexity of assets, to obtain the valuations and prepare the inheritance tax, at an hourly charging rate of between £185.00 plus VAT for an Assistant Solicitor – £250.00 plus VAT for an Executive Partner. A full cost estimate will be provided when full details of the estate have been ascertained, inheritance tax has been calculated and we can assess the exact level of work required to complete the administration.
In such estates, time estimates for completion of the administration will be provided when we have obtained Probate and can properly estimate the work required to complete the administration of the estate.
Fixed Probate Applications
We are able to offer a service whereby you as the client obtain all the information required to enable us to preparing the inheritance tax account and probate application and we then deal with the preparation of those documents and filing on your behalf with HMRC and the Probate Registry on a fixed fee basis:
- Short form IHT205 & Probate application – non-taxable estates between £1,000 – £1,500 plus VAT and disbursements depending upon complexity
- Full IHT400 & Probate application between £2,000 – £3,000 plus VAT and disbursements depending upon complexity
All costs information given here are examples, we will provide more precise and personalised cost information upon receipt of specific estate information from you.
The Legal 500 is a leading guide to law firms and solicitors, offering reliable and current information for those buying legal services. We have been recommended for our Probate and Estate Administration Services.
At Coole Bevis LLP Jenny Murphy counts regional Court of Protection work as a major part of her practice; she is on the Panel of Deputies and drafts lasting powers of attorney in addition to her broader private client work. Alex Bowers is noted for the handling of complex estate and tax planning work, often with an overseas element and the team, including Emily Wardrope, handles a large number of trusts and estate administration and probate cases.
PROBATE AND ESTATE ADMINISTRATION TEAM
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