The whole process of Probate and Estate Administration has become more complex and time consuming over the past few years.
As an Executor you cannot charge for your time, but you are allowed to claim out of pocket expenses. This applies even if the Executor is not a beneficiary under the Will.
It is due to this that many clients choose to pass the administration of an estate to a professional company, who will usually carry out all the work for a fixed fee, negotiated and agreed at the start of the process. There are many firms offering this service ranging from Solicitors to specialist firms.
For our clients we recommend Kings Court Trust for this work and full details of their service can be found at :-
https://www.kctrust.co.uk/pricing.
Here is an outline of their levels of service together with an indication of the level of fees that may apply.
PROBATE
Probate may be required when someone passes away. It is referred to as the ‘Grant of Probate’ in England & Wales or ‘Confirmation’ in Scotland. Probate is required when the deceased owns a property in their sole name or if a financial institution (such as a bank) requires a ‘Grant of Probate’ to release funds. Obtaining the ‘Grant of Probate’ from the probate registry gives the Executors (in a Will) or the Administrators (if there is no Will) the authority to act in the administration of the estate. There is a set government application fee of £215 for obtaining the ‘Grant of Probate’ if the estate value is £5,000 or over. If the estate is under £5,000, there is no fee.
Probate has become synonymous for dealing with the affairs of someone who has died. However, probate is just one small component of administering the estate overall.
Do I need probate?
If assets were held jointly, probate is generally not required as these assets pass by survivorship to the survivor. Some jointly held assets (usually property) will however need a Grant if particular arrangements have been made during lifetime. It is sole assets which financial institutions need to see a Grant before release of these funds, if the balance exceeds their own probate threshold. This threshold varies from institution to institution rather than being set by Government.
Not every estate will require probate but all estates need estate administration. Estate administration is the process of dealing with a person’s legal and tax affairs after they’ve died. This means dealing with all their assets (such as property, shares and personal possessions), paying debts, paying any Inheritance Tax and Income Tax and transferring inheritance to the beneficiaries of the estate.
WHAT COULD BE INVOLVED IN ESTATE ADMINISTRATION?
Every estate is different, but there are various stages of the estate administration process which are required in most cases.
Gathering information
Contacting banks, HMRC, the Department for Work and Pensions, creditors and other financial institutions.
Preparing tax forms and applying for the Grant
Preparing all the relevant tax forms that HMRC will require.
Closing accounts
Once received the Grant of Probate will need to be sent to banks, mortgage companies and anywhere else the deceased had an account, policy or debt. The accounts will then need to be closed and funds collected or paid.
Completing the legal work
If the Will contains a Nil Rate Band Discretionary Trust, this will need to be created and the Trustees informed. Your legal team will then need to work on any Trusts within the Will, property transfers and other legal tasks like statutory declarations or dealing with Cessate Grants.
Selling and transferring assets and paying debts
Any shares and assets within the UK and overseas will need to be transferred or sold. Once you have sufficient funds, you must pay off the debts and possibly make interim distributions to other beneficiaries.
Selling property
The family home can be the most valuable part of an estate, financially and emotionally. The appointment of house clearance, estate agents etc. need to be carried out once the Grant has been received.
Finalising tax work
Your tax advisor must complete the Income Tax return and submit it to HMRC. They will confirm the final Inheritance Tax position and obtain ‘clearance’ from HMRC. Any overpaid Tax or Inheritance Tax needs to be reclaimed and final settlement any remaining debts.
Producing estate accounts
You must produce full and final estate accounts and send them to all the beneficiaries and answer any question they may have